While you may not be able to modify your mortgage through your Chapter 13 bankruptcy, there are ways that filing a Chapter 13 bankruptcy case can help you keep your home. For example, if you are behind on your mortgage payments and you are facing foreclosure, file a Chapter 13 bankruptcy will stop foreclosure and allow you to keep your home by paying the mortgage arrearage through your Chapter 13 plan. You can use the Chapter 13 plan to spread out the past due payments rather than pay the entire past due portion in one lump payment to save your home.
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Unfortunately, you cannot modify your mortgage through your Chapter 13 bankruptcy case. Bankruptcy law does not permit a debtor to change the interest rate, amount owed or any of the original terms of the mortgage through the bankruptcy plan. However, some mortgage companies work with debtors to modify the terms of their mortgage during the bankruptcy to allow debtors to keep their homes by lower the interest rate and or payment amount.
The mortgage company is not required to do this; however, some mortgage companies are working with homeowners to modify the terms of the mortgage to allow them to keep their home. If your mortgage company does agree to modify your mortgage during bankruptcy, you will be required to file a motion with the court and obtain court approval for the modification.
Modify Your Mortgage by Valuing a Second Mortgage
You cannot modify your mortgage terms to decrease the amount of your second mortgage; however, you may be able to value your second mortgage at zero. If you owe more on your first mortgage than your home is worth, you may be able to value the second mortgage at zero. This may require obtaining a formal written appraisal to prove that the market value of your home is less than what you owe on the first mortgage.
However, you will not be able to modify your mortgage if the appraisal reveals that the home is worth even one penny more than the payoff of the first mortgage. An experienced Mount Holly bankruptcy attorney can explain more about mortgages and Chapter 13 bankruptcy during a free consultation.
Schedule a Free Consultation with an Experienced South Jersey Bankruptcy Attorney
Stop payday loan collections and eliminate the debt by filing for bankruptcy relief. We understand how stressful it is to have debt collectors harassing you by telephone, mail or even in person over a payday loan. We can explain in more detail how filing a bankruptcy can stop collection efforts while getting rid of the debt forever. By helping you choose the right bankruptcy chapter for your financial situation, Travis J. Richards helps you get a fresh start while protecting your interests.
Travis J. Richards and his staff are here to assist you with your financial problems. We focus our services on bankruptcy, debt consolidation and credit repair. We offer free bankruptcy consultations during normal business hours as well as on weekends and after-hours.
Call our office in Mount Holly at 609-267-5297 or use our convenient online contact form to schedule an appointment today.
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