Some of the statistics are quite surprising. New York, for example, has some of the lowest foreclosure rates in the country, at 1 in 2,000 homes for July 2010 when some states were at 1 in 200 to 1 in 400 homes going into foreclosure. California has been hit hard by the housing crisis, with more foreclosures than any other state in July, thought it is the largest state. What is more important is the statistics: 1 in 200 California homes went into foreclosure in July.

Unemployment across the country is high too. Unemployment has gone up so far from 2009 to 2010, though only by a few tenths of a percent. Still, almost 10% of Americans are unemployed. This number is causing more bankruptcies.

Foreclosures have increased over 20% from 2009 to 2010 according to some estimates. Foreclosures are being blamed on more than unemployment, as tight credit standards and lost medical coverage is also affecting many Americans.

For some fair reasons bankruptcies get a bad name. However, to stop foreclosure and to discharge debts, there are few better solutions than filing bankruptcy. When used correctly, Chapter 7 bankruptcy can save you tens of thousands in debt. When used correctly, a Chapter 13 bankruptcy can stop a foreclosure. If home owners who recently became unemployed filed for Chapter 13 bankruptcy before foreclosure papers had been filed they could save their homes.

Over 1 million people took advantage of bankruptcy in 2009, and we are on track to get even more in 2010.

Chapter 7 bankruptcy has some affects on foreclosure too, especially when you are unemployed. For some, the debt repayment plan in Chapter 13 may not be affordable. But Chapter 7 discharges most all credit and medical debts, the main problems for many, and can also discharge mortgage debt (though you will likely lose the home in this case).

Are things getting better before they get worse? Foreclosures and unemployment are big problems. Bankruptcy is not a solution for everyone.

In order to slow foreclosures, bankruptcy is an option. In order to create more jobs, we need more businesses, especially small businesses, to start and expand. The good news is that we still do have options for financial protection. There is no better time to save your retirement money and 401Ks rather than spend it. There is no better time to start a business or buy a home for a good price.

Job growth is not enough just yet, but using what the financial system gives consumers – by filing for bankruptcy or at least consulting with financial help – should not be overlooked.

In the article, Dugas quotes Gerri Detweiler, a personal financier, on how you may not be able to afford bankruptcy. This is a common problem. While the filing fee of $299 for Chapter 7 and $274 for Chapter 13 may seem minor to some, to many that is money which might take months to collect.

The point addressed in the article is that if you lack the funds in such a way, you likely have little to no assets a creditor can take. Since bankruptcy lawyers are not free, you can use what’s been called the “do nothing” approach. Though it rarely works, for some who have no assets to lose, it’s an option. You have nothing they can take. You write the creditor a letter explaining you cannot repay the debt. And you ask them to stop collections against you. Sometimes it can be as simple as that.

But what if you own some assets and/or have a job? Dugas highlights how you should find out if your state has wage garnishments, and also to see your rights when it comes to your assets. If you have a job, creditors can try to get money from you by using a wage garnishment, though state laws differ on this. If you have a lot of assets, these can legally be taken and sold to pay off your debt. If either of these circumstances occur, you need to really consider bankruptcy. It may very well be your best option.

Whether you have decided to file bankruptcy or not, you should be aware many scam artists are out there looking to cash in on your mistakes. This occurs most commonly to home owners who are told they can save their home by paying the scam artist.

Foreclosure is of course a bad ending for your home. Once again, you may want to consider bankruptcy. It may very well be your best protection against losing your home.

Finally, the USA Today article makes another good point that should be addressed. Retirement money, 401Ks, and pensions should be off limits. The article does not take long in addressing this, so let’s be clear. If you have to choose between spending retirement money or filing bankruptcy, the majority of the time you want to file bankruptcy. Using this money may only buy you a few months. If you’re only buying time and not solving the problem, bankruptcy is a better choice.

There are both reasons to avoid bankruptcy and reasons to file. It’s good to educate yourself on the laws, but it’s okay to be somewhat confused on how it works. At the least, consult with a financial consultant if you feel your finances are out of your control. If you are considering bankruptcy, make the best choice and hire an experienced lawyer.

This is an uphill battle with a lot of problems, including high unemployment rates, the mortgage bust, and millions of Americans lacking in proper medical coverage.

According to government data, the U.S. bankruptcy filings have reached the highest point since 2005. The Reuters article points out how clearly unemployment is part of the problem. But it is more than that. With over 1 million filing bankruptcy in 2009, it would not have been wrong to see that as a watershed moment.

However, instead of improving, the economy is struggling. Consumer bankruptcies have not just gone up: since the calendar year as of June, we are looking at over 20% increase in filings.

Quarterly filings between April and June, cited in the Reuters piece, note how the problem is still less serious than the economic slump of 2005. In 2005, in one quarter over 600,000 consumers filed for bankruptcy.

Of note is that this is the year that new bankruptcy code made it more difficult to file for Chapter 7 bankruptcy.

According to the bankruptcy code changes of 2005, if you make more than the median income of your state, which can vary from $30,000 to about $50,000 per year for individuals, you are not eligible for Chapter 7 bankruptcy.

On the other hand, pushing consumers to file Chapter 13 not only encouraged financial responsibility but opened the door for less foreclosures to occur. If used correctly, a Chapter 13 bankruptcy can be more effective in protecting your home.

Because of the changes, filings for Chapter 13 increased. Whether this had a clear affect on the foreclosure rates may not be obvious. What we do know is that bankruptcies have once again increased. In the quarter of April to June, over 400,000 bankruptcies were filed, the first time the limit has gone that high since 2005.

This does not mean growth isn’t coming, nor does it mean filing bankruptcy is a bad idea. This news does mean there is a lot of work to be done.

If you are unsure of whether bankruptcy is right for you, it’s time to consult with a lawyer. If you’re scared you’ll lose your home, it’s best to act now. And if you have a huge debt over your head, understanding how the laws work can be invaluable.

If you’re looking for California lawyers, one of the best places to look is online, such as this blog designed to help consumers with legal help. An experienced lawyer in any state requires some research.  So how do you hire one?

How to Hire a Bankruptcy Lawyer
If you want to hire a bankruptcy lawyer in any state, use good hiring strategies over time. Starting online is a good start, but also look to your local yellow pages. The easiest thing to do is hire the first lawyer you come across; this can be a big mistake. You need to research lawyers, see their experience, discuss fees, and note how they’ve helped others. That should be done with several lawyers–not just one.

By looking for experience, you save yourself a lot of time. You need a lawyer who 1) has at a minimum  of several years experience and 2) specializes in personal bankruptcy cases.

Also, you want a lawyer to be local. You want to meet with him, not just send emails and chat on the phone. Your California bankruptcy lawyer can educate you more in person than at any other point. You have more time to ask questions. Also, you’ll be able to get fair rates, a lawyer who knows California eligibility and federal bankruptcy code, and one who can save you time and headaches in paperwork.

Where to Find Lawyers
So you went online, queried a few lawyers, but you’re not finding a match. No problem, because the State Bar of California has a directory of all the lawyers in your area, what they specialize in, and how to contact them. If you’re in a small town, you might have to hire a lawyer a bit further away. That costs you only a little gas money; you can  and should meet with them.

Tips on What to Look For
Surprisingly, price may not be your first question. After all, this bankruptcy lawyer may have 20 years experience in helping people through bankruptcy, saving homes, stopping creditor harassment, and letting you keep other assets. That is more valuable than the lawyer fresh out of law school.

In either case, price is still an issue. Once you’ve gauged your prospects experience, ask about fees. While actually filing bankruptcy may seem easy, it’s in fact a precise science, and often you will have to appear in court, and always have to fill out a lot of papers. Hiring an experienced California bankruptcy lawyer makes this process simple. You can expect lawyers to charge from $1,000-$2,000, sometimes more.

So how do you keep your home instead  of Chapter 7 bankruptcy? What can you do during the bankruptcy? And what happens after — will you be able to buy again or negotiate with the lender? This post gives answers.

Before Bankruptcy
Usually Chapter 13 bankruptcy is best for keeping all your assets. The only negative is you have to pay back your debts; you cannot discharge one dollar in Chapter 13. The advantage is, say you have an expensive home you’ve been paying on for 20 years. Do you really want to lose it to pay back debt? And if you have a job, your chances are higher for keeping it with a new debt repayment plan

That said, if you want to keep your home before bankruptcy, no matter whether it’s Chapter 7 or Chapter 13, you need to 1) hire an experienced attorney and 2) make the loan current.

Why hire an attorney?
An attorney is your very best option for keeping your home. No matter your housing market, no matter how far behind you are in payments, an attorney is invaluable.

Why make the loan current?
Really, this is the most important tip of the entire post. According to law, if you get your loan payment current–meaning you pay all delinquent amounts–the lender cannot take your home. If you’re going to file Chapter 7 bankruptcy, you can keep your home if you negotiate with the lender or if  you work with the trustee. For example, if you also wanted to keep your car, you could pay the amount you owe to the trustee so you can avoid losing it.

Is bankruptcy the best option?
Certainly bankruptcy has advantages and disadvantages. For one, if you wait to long to  file, you may lose your home in foreclosure before you can act. But since Chapter 13 bankruptcy can save your home, it’s often the best option.

Will your credit be ruined?
If your home is foreclosed upon, to put it simply, that’s pretty much the worst thing which can happen to your credit.  You will have a lot of trouble getting financing in the future. However, if you avoid foreclosure, bankruptcy looks far better than foreclosure after you file. While foreclosures are as common as bankruptcies, bankruptcy doesn’t necessarily ruin your credit. If you had to choose between losing everything and ruining your creditor, or keeping much and paying back or discharging debts, what would you do?

What’s the first step?
These tips were meant to show you how to successfully save your home from foreclosure. Before you go into foreclosure, consider bankruptcy. During, stay current on payments. And after, rebuild your credit.

The first step would be to hire an expert who can assess your situation. You may want to file Chapter 7, you may prefer Chapter 13, or perhaps there are alternatives. An experienced bankruptcy attorney can help in numerous ways; just hire the right one.

Lawyer prices vary in terms of time involved, how experienced the lawyer is, how fast the lawyer is, if you are hiring a big name firm or a smaller firm, and availability and time.

How Experienced
Experience proves many things, and it does often require a higher fee. On the other hand, you may get a quote much less from an experienced bankruptcy attorney in New York than one who’s less experienced. It may take longer for the latter lawyer to get to your case, for example. Also, sometimes experienced bankruptcy attorneys can do things faster, or do most of the work in a shorter time frame.

How Fast
If one lawyer is inundated with more cases than another, he or she may be able to get your case through much faster. Of course, the courts don’t revolve around this, but you may get a good deal. On the other hand, spending more time on the case may be worthwhile. There may be details in the case overlooked in the rush to get you a lower fee in a shorter time frame. This is subjective, but it bears consideration.

How Big
If you hire a lawyer from the State Bar of New York directory who has a small office, or if you hire a New York firm with dozens of attorneys, you may wonder if that effects price. Once again, it can be subjective. You may get a lower fee from the big firm, with the promise you’re case will be handled by a highly experienced lawyer but completed by a less experienced one. This is often a trick to get you to sign up. In many cases, the bankruptcy will take longer.

If you choose a smaller firm or a single bankruptcy lawyer, they may charge you more, but spend more time on your case. Or they could have openings and charge you less. It varies, but it shows that you should work beyond just referrals and lawyer websites. You should query several experienced New York bankruptcy attorneys in your area.

Can you reduce the price?
Yes, some lawyer fees are negotiable. It’s again dependent on the lawyer. In some cases, the fee will be non-negotiable, being the same fee everyone gets that’s posted online and in the contract. But really, if you’re filing bankruptcy an experienced attorney who wants to help can negotiate 1) how you pay and 2) how much. Some may not be willing to negotiate fees, but will negotiate how you pay them over time. Some might be willing to lower your fee if they see you cannot afford them and will have to hire someone else.

Where to Start
The State Bar of New York and New York law firms are online, and showcase many options. Be thorough, querying as many as you can. And look for the right fit.

What really is foreclosure?
Foreclosure means you’ve fallen behind in mortgage payments and your lender decides to sell your home. If you do nothing, you will lose the home. If you act before the lender decides to initiate foreclosure proceedings, you can in fact protect your home with what’s called an “automatic stay,” which stops the foreclosure from going through.

How can Chapter 13 help?
Chapter 7 is a liquidation, Chapter 13 a debt repayment plan. You pay nothing, in most cases, with Chapter 7 as your assets are sold. Chapter 13 means you still owe money, but your payments are restructured over 3-5 years. That means if you can stay current with the Chapter 13 repayment plan, you can keep your home.

Foreclosure Process
Here’s what happens if you fail to act quickly enough. This is what could happen if you wait too long to file, or if you do absolutely nothing.

First, you fall behind in mortgage payments. How soon is this? It varies in different states, but technically foreclosure can begin after one missed payment. However, few lenders act that quickly; the majority wait until you fall far behind.

Second, depending on the state, the lender will usually send a notice explaining their intent to foreclose your property. This is a ten day notice, and by this time it may be too late to file for Chapter 13 to save the home.

The lender’s next step is to file a lawsuit with the courts; if you can catch up with payments, this won’t happen. You have a chance to fight this case in court after being given a summons, by responding within a few weeks. This is your opportunity to prove to the judge that something is wrong with this process. At this point, you might consider hiring an attorney to help you. The best choice would clearly be to hire a bankruptcy attorney before this process is initiated.

The next steps are pretty straightforward: you are told of intent to sell if the courts don’t stop it, an auction is held on your home, and you are either evicted or allowed to stay.

That last step, where you are either evicted or allowed to stay, depends on the state. Many states allow you to stay in the home until you are given an official eviction notice.

Steps to Avoid Foreclosure
These laws can be navigated if you take immediate action. Since the time involved depends on the lender, the court, and the market for your home, sometimes you have more time and sometimes you have little if any. There are few ways to gauge how this will work in terms of time. So upon falling behind in payments, if it’s clear you won’t be able to catch up, contact a bankruptcy attorney. The good news is, with Chapter 13 filing, you can save your home.

Are you eligible for bankruptcy in New York?
The two main forms of personal bankruptcy, Chapter 7 and Chapter 13 bankruptcy, have clear guidelines for whose eligible to file. In most all cases, you can file Chapter 13. It used to be the same with Chapter 7. With new bankruptcy code, you must now be at the median income or below in your state if you want to file for Chapter 7 bankruptcy.

For example, if you’re a single resident in New York, no matter what assets you have, but make less than  $46, 523, you can file under Chapter 7 bankruptcy in New York. The larger your family, the larger the median income limit. If you make less than $57,000 and your family size is 2, you can file bankruptcy. It goes up from there, as in  other states.

Sometimes you may not be eligible for Chapter 13 bankruptcy. If you have more than $336,900 in unsecured debt, you cannot file. If you have more than $1,010,650 in secured debt, you are not eligible.     However,if you have less than those numbers in unsecured and secured debt, as most do, you are eligible for Chapter 13.

To be sure these numbers are up to date, or for different states, you can find out the median income for your state, along with current bankruptcy code for secured and unsecured debt.

What bankruptcy is better for New York bankruptcy filers?
It depends on your current income status, mainly. What’s best for you can be helped with a professional  bankruptcy attorney. Here are some tips:

-If you have a lot of credit card debt, only Chapter 7 bankruptcy can eliminate it
-If you fear your home will go into foreclosure, Chapter 13 bankruptcy can delay it several years and help you keep it
-Chapter 7 bankruptcy does not eliminate tax or alimony debts
-Chapter 13 bankruptcy only buys you time: you still need money

How do you hire a bankruptcy attorney in New York?
Hiring a bankruptcy attorney comes down to many factors, including: experience, rates, and workload.

If your attorney has little experience in bankruptcy law, even if he or she is a friend, you should hire a professional. The more experience does not always mean more rates either, but some attorneys charge you higher than others. Lastly, you don’t want to hire a New York attorney who’s inundated with clients; good for him or her, but can slow the process for you.

Will there be more bankruptcy changes?
There will be more bankruptcy changes at the state level, likely every year as the median income changes. For New York residents, there are alternatives to bankruptcy, but sometimes bankruptcy is your best option. If you’re unsure, consult with a professional.

Exempt property is property you can keep. Technically, your home, car, and many possessions can be exempt if you are current on them. This depends on what form of personal bankruptcy you file–Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Nonexempt assets cannot be kept in most cases unless you are filing Chapter 13 bankruptcy, where you have the opportunity to pay back assets over 3-5 years. Nonexempt assets can vary in value, but if you have few valuable assets, and are current on mortgage and car payments, you can often keep the majority of them.

For bankruptcy filers, hiring a professional bankruptcy attorney is simply a must.

What if you file Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a liquidation proceeding where you cancel the majority of your debts, mainly credit card debts. You cannot claim mortgage, tax, alimony, college tuition, and many other forms of debt. You can discharge credit card debt, which is mainly why so many want to use Chapter 7 bankruptcy. Chapter 7 bankruptcy typically only lasts a few months; but bear in mind, any bankruptcy will stay on your record for some time, currently 10 years.

What if you file Chapter 13 bankruptcy?
It’s often noted that Chapter 7 filers are being forced to file Chapter 13. Why are fewer being allowed to file Chapter 7 bankruptcy? It’s mainly because people with higher incomes are filing. If you have enough money to pay expenses, but not enough to cover bills, Chapter 13 bankruptcy can buy you time to pay back bills. No possession–such as your home and car–will be taken if you stay current on them .Also, you get 3-5 years to pay back debts. If you fear home foreclosure, Chapter 13 bankruptcy can save it. It’s important to act early before the foreclosure goes into effect. If you are making enough money to pay most bills, but your house payments are behind, you should immediately inquire with a bankruptcy attorney as to your options.

What money can you keep after filing bankruptcy?
How much money you can have is another important question. If your home and car are valued too high, you may lose them with Chapter 7 bankruptcy. If your car equity is too much, these can be considered nonexempt debts. If on the other hand you have too much money in your account and you have a car or home, these could be taken. These laws can be complex, and  some state laws actually come into play concerning the value of exempt and nonexempt assets. If you’re unsure, a quick consultation with a good bankruptcy attorney can help.

But when is the time creditors “can” call you?
The times are between 8 AM and 9 PM, Monday-Saturday. If they do not follow these laws, you have grounds for a case against them (we’ll go over that more).

If creditors call you during the legal times, you still have rights under Federal and State laws. A creditor  can rarely if ever contact you at work. If they contact your neighbors or family looking for you, you also have a right to stop it.

How can you stop creditor harassment?
If you owe money, creditors have a legal right to contact you. However, what you can do is write a letter stating you want the contacts to stop; by law the creditors have to stop. What do you say in the letter?  You simply make it plain you want no more contact with the creditor anywhere, or to friends and family.

What if a creditor threatens you?
Unfortunately, this happens often enough to be noted, as creditors sometimes are known to threaten debtors. If a creditor threatens to hurt you, garnish your wages, or threaten you in any other way, it’s illegal. A creditor, for one, can never threaten to garnish your wages, even if they plan on doing so. Of course, it’s obvious threatening to hurt you is a major crime as well.

What if a creditor sends you a letter?
There are laws designed for letters from creditors too. The letter must state: you have 30 days to dispute the amount or the debt will be considered valid, how much the debt is, the name you owe money to, and that anything you say can be used against you. This is much like a Miranda, and just as in criminal law, there are rules on what creditors can and should say.

How can you sue a creditor?
The good news is, creditors are sued successfully on a regular basis. The bad news  is, the most you can collect from the creditor is $1,000. However, it does make a big statement. You still owe the money, but the creditor may have learned a valuable lesson.

What are your options if they follow all laws?
You have the right to 1) send them a letter asking for no more contact and 2) a lawyer to take any future creditor calls. If you file bankruptcy and hire a bankruptcy attorney, all future calls from the creditor should go directly to your attorney. This stops creditor harassment. There are alternatives to bankruptcy, but if you’re in over your head with debt, Chapter 7 and Chapter 13 bankruptcy are reasonable options for eliminating or managing debt.