Contrary to popular belief, there is quite a difference between loss mitigation and bankruptcy. Many people consider these choices when they are unfortunately facing foreclosure. In this situation, it’s in your best interest to determine the difference between the two and make a decision that best suits you and your situation.

Deciding to file for bankruptcy is quite serious, so make sure that you have covered every aspect of the situation before you make the final decision to file for bankruptcy. This is one decision that will have a grand impact on you and your future. It’s in your best interest to do all the possible research you can, to figure out which approach is best for you to take. Low cost San Diego bankruptcy attorney will come under the budget of the small business owners. The hiring of the best lawyers can be done through the process.

When you conduct your research, you will find that there are two types of bankruptcy in the U.S. These two types are Chapter 7 and 13. As far as Chapter 7 is concerned, this is when partial or all of your debt has the potential to be erased permanently. In this instance, you are taking the risk that some of your personal property may be sold to repay the creditors.

Even though you are filing for bankruptcy, Chapter 7 has a feature that’s known as ‘automatic stay’. This feature will keep creditors away from hassling you for the money that you still owe to them. Nevertheless, keep in mind that this will only be for a limited amount of time. It is important for you to realize the fact that filing for bankruptcy is the absolutely last step that you should take. You should only take this step when there are no other options.

When you file for bankruptcy, you are literally placing your property in the hands of a bankruptcy court. In this event, this means that you will not be able to sell any part of your property without notifying the correct authorities and without permission to do so.

When it comes to Chapter 13, the set-up here is like a promise to pay off or a repayment installation plan. The amount of time that you will be given to repay the amount that you owe will depend upon the current amount of your outstanding balance. Another detail that will be considered in this instance is your income.

This is a great option to take advantage of when you are facing foreclosure. This option gives you the chance to pay back the money you owe on your mortgage and even make up any late payment.

Loss mitigation on the other hand, gives you several different options to choose from. These options generally assist homeowners in saving their homes. A few options in this instance include refinancing, loan modification and forbearance.

Choosing the appropriate step that will solve your problem can be really frustrating and tricky. Both options do have some pros and cons. Hence, it’s in your best interest to conduct a little research on both options. Don’t rush into one option method without reading the fine print. If you face difficulty to conduct the research yourself, contact a foreclosure attorney to figure out the best decision for you.