You need a bankruptcy & debtor's attorney to:
1. Analyze your income and assets.
2. Look at the magnitudes of debt and debt categories on the house.
3. Check and see if bankruptcy would have any benefit for you.
4. ascertain whether you will be responsible for the deficiency.
5. See if you are insolvent so as not to be charged with COD income.
6. See if the mortgage and note are proper and that the bank didn't make an error in all the transactions from start to finsih.
7. Check to see if you can accomplish a bankruptcy equivalent by application of your state's non-bankruptcy exemptions.
and much much more.
Until an attorney looks at EVERYTHING its a shot in the dark.
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.
Foreclosure actions take a long time to play out in Court. If a foreclosure action is filed and you are served with the Complaint, speak to an attorney about filing an Answer to the Complaint. You may have defense available to you such as compliance with Act 6 (if applicable), among others.
Bucks County also has a foreclosure diversion program, which would allow you to explore options other than foreclosure such as a short sale or deed-in-lieu of foreclosure.
In any event, filing a response to the foreclosure action rather than doing nothing and letting the lender get a default judgment will ensure that you have the maximum amount of time in your home.
Go ahead and apply for a Making Home Affordable (HAMP) loan modification, it sounds like the perfect time: you are delinquent, and they haven't filed foreclosure. The servicer is not supposed to refer your loan to foreclosure while you are being considered for HAMP loan modification.
The information in this answer is not intended as legal advice nor do I intend to create an attorney-client relationship with any reader simply by answering this question or contributing as a member of AVVO.