March 20 (Bloomberg) -- People's Choice Home Loan Inc., a mortgage lender for people with credit problems, filed for bankruptcy protection.

The Chapter 11 filing today in U.S. Bankruptcy Court in Santa Ana, California, comes as delinquency rates on so-called subprime home mortgages hit a four-year high. Subprime lenders specialize in loans to customers with bad credit or heavy debt.

People's Choice, based in Irvine, California, is the fourth subprime lender to file for bankruptcy since December, joining Ownit Mortgage Solutions LLC, Mortgage Lenders Network USA Inc. and ResMae Mortgage Corp.

In the past year, shares of three other subprime lenders -- Fremont General Corp., New Century Financial Corp. and NovaStar Financial Inc. -- have lost at least half their market value.

Filing the same day as People's Choice Home Loan was People's Choice Funding Inc. The companies are subsidiaries of People's Choice Financial Corp., a real estate investment trust.

Both subsidiaries estimated that they have more than $100 million each in both assets and liabilities, according to court documents. Information about overlapping assets or creditors wasn't immediately available.

John Salvador, director of investor relations for People's Choice Financial, and Jeremy Richards, a lawyer for the debtors, didn't immediately return calls or e-mails seeking comment.

Creditors

Among the 20 largest unsecured creditors listed in People's Choice Home Loan's court papers are Wachovia Bank NA, Bear Stearns Mortgage Capital Corp. and Merrill Lynch Mortgage Lending Inc.

Last week, People's Choice Financial withdrew a registration statement with the U.S. Securities and Exchange Commission that it had filed to sell around 64.3 million shares valued at $192.9 million. The company cited ``various business and market reasons'' for the withdrawal.

According to the registration statement, filed in June 2006, People's Choice Financial had about $3.9 billion in mortgage loans for investment on its balance sheet in March 2006. It issued $4.5 billion in mortgage-backed securities in 2005.

The registration statement said People's Choice Home Loan was formed in 1999 and People's Choice Funding in 2004.

The cases are In re People's Choice Funding Inc., 07-10767; and In re People's Choice Home Loan Inc. 07-10765, U.S. Bankruptcy Court, Central District of California (Santa Ana).

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net.

Last Updated: March 20, 2007 14:13 EDT