Legal Question in Bankruptcy in California

Yes, you can file while in the process of a loan mod.

Whether or not you should and under what chapter of the bankruptcy code is very fact specific and only a lawyer that looks through your paperwork can give you actionable advice on that.

Which chapter you should file under is a bigger question that requires more knowledge about your current situation (income, asset, debt, and expenses) and intention.

Since the behavior of lenders in regards to loan mod is unpredictable at best, you may not want to rock the boat until you've signed a new modified loan contract. on the other hand having a garnishment on your paycheck may impact your lender's view of whether to qualify you.

Keep in mind that payments to unsecured creditors within 90 days before filing bankruptcy may be redeemable back into the bankruptcy estate, once you file.

You should contact an attorney who can look at all factors that may impact your situation.