The third quarter of 2009 saw a record number of foreclosures across Arizona according to RealtyTrac, an online marketplace for foreclosure properties. For the fifth quarter in a row, Arizona ranked second behind only Nevada with one out of every 55 homes threatened by foreclosure. In the Phoenix area alone, 2009 foreclosures jumped 158% over the 2008 figures.

While the first round of foreclosures in 2008 could be blamed on the meltdown in the subprime mortgage industry, subsequent rounds of foreclosures spoke to a deeper malaise in the national economy. With national unemployment statistics hovering officially at just under 10%, many previously credit-worthy individuals just couldn't afford anymore to keep up with their mortgages. And with a large scale de-escalation in the true value of real estate, many individuals found themselves saddled with mortgages that cost them way more than any equity they had in their properties and simply chose to walk away from these "underwater" homes.

In March 2009 the federal government introduced a new program called the Home Affordable Modification Program (HAMP) which allows qualified borrowers' existing loans to be modified so that borrowers are paying no more than 31% of their gross income towards their mortgages if their loan servicers are participating in the program. Other remedies also available to qualified homeowners include interest rate reduction, repayment period extension and deferrals, and even principal forgiveness in some cases.

But qualifying for the HAMP program is a complicated process. First the program is only available to homeowners with loans taken out before January 1, 2009 in the amount of $729,750 or less. Second, your loan servicer will review your financial history in minute detail and you may be required to attend financial counseling.

And what if other financial exigencies have forced you to consider filing for either Chapter 13 or chapter 7 bankruptcy? Can you still be eligible for a loan modification under the HAMP program?

Yes, you can be considered for a HAMP modification even with a Chapter 13 or chapter 7 bankruptcy on your credit report, but you will need to consult with an experienced bankruptcy lawyer who can help you obtain the reports and other information your loan servicer will have when they are determining whether you are qualified for HAMP. Whether you are a Phoenix homeowner looking for a bankruptcy lawyer in phoenix or an Arizona homeowner looking for an Arizona bankruptcy lawyer, a qualified bankruptcy lawyer can assist homeowners facing foreclosure by allowing them to view themselves through their loan servicers' eyes. If you are the one of those homeowners being threatened by foreclosure, you are well advised to call an Arizona bankruptcy lawyer or a bankruptcy lawyer in phoenix as soon as possible.

J. Phillip Glasscock, P.C., is a debt relief agency. We provide assistance with respect to credit defaults, mortgage foreclosures, eviction proceedings, excessive debt, debt collection pressure or inability to pay any consumer debt. We help people file for bankruptcy relief under the Bankruptcy Code.