Legal Question in Real Estate Law in California

You have already been advised that Ch. 13 Bankruptcy is the only possible option, and quite frankly I don't even think that is likely to help you. Consult with a bankruptcy attorney. Neither LawGuru nor the law exist to help you in a scheme to avoid or delay paying your just debts. Only Bankruptcy does that, for people who qualify for the protection from their financial mistakes or misfortune. As for "toxic loans," that term is used by the financial community to refer to loans to dead beats on properties that have nowhere near the value to support the debt, even at the time the loan was made. So if your loan is a toxic loan that is a critique of you and your appraiser and mortgage broker, not the loan itself, and it certainly doesn't give you any right to legal relief unless you were the victim of actual fraud.

"Toxic loan" is not a term with a precise legal meaning -- it's more of a journalistic way of describing a loan in which an unqualified borrower and an unscrupulous lender have conspired to place money in the borrower's hands in the belief, or hope, that home values would continue to escalate, thus bailing out both borrower and banker. When this didn't happen, the borrowers defaulted in droves and the lenders, including Countrywide, essentially failed and got bailed.

Restructuring is something you need to handle by contacting the lender. Lawyers probably can't help you, at least not much, nor at the outset. I believe BofA has a policy of reaching out to defaulting borrowers (possibly a policy prompted by law, by the way) to offer counseling, which includes exploration of the possibility of refinancing the loan. However, in really tough negative-equity situations, especailly with significant past-due balances, refinancing is probably not going to be a realistic option.

Bankruptcy (Chapter 13) might be an alternative, but as a non-practitioner in that area I am skeptical that you'd get any longer-term benefits. A bankruptcy stops foreclosure for a while, but the time it takes a lender to apply for and obtain relief from the automatic stay and proceed with a foreclosure sale is a matter of a few weeks, perhaps not worth it for the average borrower.