Legal Question in Bankruptcy in Missouri

A bankruptcy attorney (maybe any attorney?) probably isn't your best source for information about programs that provide a long-term solution to too much mortgage and too little money. But are you absolutely sure this is the problem?

If you have a lot of other debt, such as credit card debt, and would be able to afford your mortgage payment if you didn't have the other debt, then a bankruptcy can help you get rid of the other debt. With the other debt gone or reduced, you might be able to keep your house. Next question: Do you really want to?

If you are upside-down in your house, a bankruptcy can enable you to walk away from the deficiency that often comes with foreclosure. You can then rebuild your credit and purchase another, more affordable house. With the drop in home prices, this may mean that the payments on a very similar (or even slightly better) house are less than your current payments.

Homeowners who are not "about ready" to lose their home to foreclosure can sometimes renegotiate their mortgage using the option of bankruptcy to motivate the lender into agreement. Essentially, you would be saying that unless you get a lower payment, you're going to surrender the house and write off the deficiency in bankruptcy.

I won't say that you "need" a lawyer to accomplish this, but lenders are swamped with requests for mortgage modifications and having an attorney send out a letter to attempt this raises the chances of success. Even then, there is no guarantee of success.

One more thing: Be very wary of the purported debt settlement companies. A few of these actually help; I think most or all of the ones that do are non-profit. The others are ripoffs who prey on people's desperation and promise a lot. They take your money and then pay themselves a hefty fee, while you continue your life under the mistaken assumption that your money is being forwarded to your creditors. The first indication that many people receive that this is not the situation is service of a lawsuit by the sheriff's department. For this reason, debt settlement companies made the Missouri Attorney General's list of the Top 10 Scams of 2009.