Homeowners Protected by Bankruptcy in Order to Modify a Loan, Seek Principal Forgiveness, and Even Eliminate a Second Mortgage or Credit Cards

COSTA MESA, Calif., Feb. 22, 2012 /PRNewswire-iReach/ -- Financial Relief Law Center (FRLC), a firm focused on bankruptcy, foreclosure relief and client-centered legal counseling, is implementing a new "LIEN ELIMINATION AND MORTGAGE RATE REDUCTION" service that combines several processes that are designed to meet the needs of our clientele who are facing foreclosure, uncontrollable debt, and outstanding mortgage payments. 

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Many homeowners are seeking help because they are unable to afford their mortgage and have incurred delinquencies. Often these homeowners are also unable to continue paying on a second mortgage or Home Equity Line of Credit (HELOC) and may also be facing foreclosure. FRLC's Loan Workout and Lien Elimination service is a combination of the protection of a Chapter 13 Bankruptcy and the savings of a Loan Workout. When a homeowner files for Chapter 13 bankruptcy, the property is protected by an automatic stay that prevents the lender from foreclosing on the property and allows the homeowner to keep the property safe while the mortgage past due amounts are repaid over time.  Additionally, if there is no equity in the property to cover the second mortgage, that homeowner may be eligible to remove or "strip" an unsecured second mortgage. That means that at the end of the bankruptcy, a second mortgage would be fully eliminated. The combined effect of the Loan Workout and Lien Elimination is that homeowners can save thousands of dollars each month, freeing up cash flow and creating future home equity. 

The Loan Workout and Lien Elimination plan does not however end with only removing a second mortgage.  Homeowners in need of payment relief on a first mortgage can also protect their property from foreclosure and remove a second mortgage and credit card debt, then take advantage of the Loan Workout element of this service, which is essential to obtaining an affordable payment.  Once in an active chapter 13 bankruptcy, homeowners may also be eligible for a loan modification with the lender. While there are many options available when modifying a loan, the most important factor is protecting the home within the Chapter 13 Bankruptcy. This provides the necessary time to evaluate the loan and determine the best options available with little risk.

If the homeowner is not ultimately eligible for a modification, the home is still protected during the duration of the bankruptcy. Under FRLC's new service, any individual eligible for a loan modification is represented at bankruptcy court to approve the lender-approved loan modification so that the home is saved from foreclosure, the second mortgage and credit card debt is eliminated, but also so that the homeowner is approved for new first mortgage terms that reduce existing monthly payments.

Horror stories in the media over the past months and years have spotlighted individuals who were approved for a temporary or "trial" payment plan and made all of the required payments, only to have the bank foreclose on them anyway. The Loan Workout and Lien Elimination at FRLC avoids this by combining the bankruptcy to protect the homeowner. For any homeowner with approval for a trial modification they can afford, FRLC initiates the bankruptcy with a stay injunction that prevents the Lender from later denying the trial modification and foreclosing on the property. In these cases, a confirmed Chapter 13 binds all parties and guarantees the loan modification accepted is fully honored by the Lender to avoid heartbreak later.

For Homeowners who either do not have a second mortgage or who know they can only afford to keep the property if a loan modification is approved, FRLC also offers a combination of Chapter 7 Bankruptcy and Loan Workout services together called Debt Elimination after Modification.  This approach first offers a loan modification to address the inability to continue to maintain the mortgage payments, and then if successfully modified, FRLC subsequently represents the homeowner within a Chapter 7 Bankruptcy. Like the Chapter 13 Bankruptcy, Chapter 7 will remove and eliminate all of an individual's unsecured debt, potentially placing thousands of dollars in credit card bills back into the debtor's pocket each month.  This savings from the bankruptcy is often over and above the payment savings a homeowner could potentially receive on a loan modification. 

Despite the fears and stigmas many homeowners have about the topic, filing for bankruptcy protects most of an individual's assets, including 401k, automobiles, and also offers thousands of dollars in exemptions for jewelry, tools, annuities, and other "wild card" possessions during the bankruptcy process.  "Any time bankruptcy is filed, the foreclosure process is automatically delayed and other collection activities such as creditor calls and harassment cease immediately," said, Mark Alonso Lead Attorney and CEO of Financial Relief Law Center. "So while bankruptcy in general has negative stigma attached in popular culture, it is often the best tool available, giving time to determine the best course of action moving forward and legal protection that saves individuals thousands of dollars yearly and ultimately saves homes from foreclosure."  

About Financial Relief Law Center

Financial Relief Law Center (FRLC) is a legal corporation providing specialty financial services that is committed to the success of our cases. Utilizing Net Present Value software, which is similar to the analysis lenders will perform in order to determine loan modification eligibility, our process includes initial due diligence with mortgage lenders to determine potential options prior to submitting a modification request.  Our staff is highly trained and experienced in bankruptcy, foreclosure defense, loan modification programs, short sales, property records evaluations, and debt settlements and our attorneys have an impeccable record with the state bar. FRLC provides quality legal representation to eligible homeowners and has the knowledge, experience and advocacy skills to help homeowners navigate the bankruptcy and loss mitigation processes so they can achieve their goals. For more information please visit www.lawcenter.com.  

Media Contact: Mark Alonso Financial Relief Law Center, 1-(866)-504-3752, malonso@lawcenter.com

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SOURCE Financial Relief Law Center

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