Thomas F. Miles, Attorney and Counselor at Law
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Personal bankruptcy may save you from losing your home

The amount a consumer initially considered affordable for a mortgage payment may become unaffordable after some years. Circumstances constantly change and job loss, unexpected medical expenses or death in a family may have an adverse impact on a homeowner's financial stability. It was reported that 15 percent of homeowners are defaulting on their mortgage payments. Personal bankruptcy may prove to be a suitable remedy for some.

California homeowners who are facing foreclosure may benefit from seeking the advice of an experienced bankruptcy attorney. Such a professional will provide information about how foreclosure may be prevented by filing for personal bankruptcy. An attorney will likely inform you of all possible remedies that may include the modification or refinancing of a loan that may lead to an extended loan period or lower interest rates.

Another option, if alternative accommodation is available, is to rent your home at a rate that will cover the mortgage, and possibly your alternative accommodation. A short sale, involving the sale of your home for an amount less than what is outstanding on your mortgage, with the bank absorbing the loss, is another option. You may even decide to transfer the title of your home to your lender with a deed-in-lieu of foreclosure, but that will mean the loss of your house.

An experienced California bankruptcy attorney will guide you through a means test to determine your eligibility for personal bankruptcy. Chapter 7 bankruptcy may see some of your assets liquidated, while some unsecured debts may be discharged and foreclosure may be avoided. Chapter 13 bankruptcy will allow you an extended period to pay your debts according to a court-approved payment plan. While personal bankruptcy may seem like a drastic step, it may save you from losing your home. More information on the protection offered by personal bankruptcy is available on our website.

Source:, "What to Do If You're Still Underwater on Your Mortgage", AJ Smith, Dec. 6, 2014

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Thomas F. Miles, Attorney and Counselor at Law
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