Thomas F. Miles, Attorney and Counselor at Law
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Should a consumer file for bankruptcy to stop foreclosure?

Facing foreclosure can be a frightening prospect, because losing a family home would be devastating. When facing financial troubles in California, it may seem like there is no way out, leading people to consider potentially unwise options. Even though mortgage relief schemes could seem like an attractive choice, it may be wise to file for bankruptcy to find financial freedom.

Mortgage relief programs often attract consumers by promising to bring relief to those who cannot manage their mortgage payments. This can sound legitimate, especially to those who mistakenly believe that bankruptcy is a negative step. These programs may seem professional and legitimate, yet they frequently leave consumers in a worse financial state than when they first began.

California individuals who are worried about foreclosure should note that the Federal Trade Commission has begun to shut down many of these programs. Consumers may be promised mortgage relief and told to stop paying their mortgage payments. Instead, they are often instructed to make payments to the mortgage relief company, based on the assurance that the company is working with creditors and lenders on behalf of the consumer. However, people often find that no money has been paid to the bank or lender, and that they are dangerously close to foreclosure. Many have also lost any fees paid to the mortgage relief program in these situations.

When a program or financial promise seems too good to be true, it often is. Mortgage relief programs may seem like a beneficial and valid option, but there are better ways to find help with a defaulted mortgage. If a person chooses to file for bankruptcy, he or she may find relief from creditors and a court-approved plan to escape the burden of overwhelming debt. This could be a wise path to escaping the threat of impending foreclosure.

Source:, "Mortgage relief schemes increase foreclosure risk", Connie Thompson, July 29, 2014

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Thomas F. Miles, Attorney and Counselor at Law
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