You may be eligible for the federal government’s Home Affordable Modification Program (HAMP) if you are actively undergoing bankruptcy. However, your options depend on whether you are filing under Chapter 7 or Chapter 13.
Getting a Mortgage Modification During Chapter 7 Bankruptcy
After you file for Chapter 7 bankruptcy, you may request a mortgage modification or “workout.” If your lender complies, you may be able to modify your mortgage. However, in Chapter 7 bankruptcy, this decision involves a third party: your bankruptcy trustee, whom the court appoints to manage your case and share responsibility for managing your property. You will likely need to wait until the trustee has decided whether or not your property should be sold in order to pay back your creditors.
You may be able to seek a mortgage modification if your trustee decides that liquidating your property will not be beneficial.
Getting a Mortgage Modification During Chapter 13 Bankruptcy
One of the key differences between Chapter 7 and Chapter 13 bankruptcy is that Chapter 13 has built-in protections that help protect you from foreclosure, one of which being that it permits you to make up for missed mortgage payments. Many people file Chapter 13 bankruptcy in order to take advantage of the automatic stay, which halts lenders’ actions against them, then seek loan modification. You don’t necessarily have to go through with bankruptcy after filing, and you may not need to do so at all after updating the terms of your mortgage loan.
Bankruptcy matters are complicated and difficult to manage alone, but they have long-lasting effects on your personal and financial future. If you are considering applying for a mortgage modification while filing for bankruptcy under Chapter 7 or Chapter 13, your best bet is to get in touch with an experienced bankruptcy lawyer.
Skilled Bankruptcy Attorneys Serving Marietta for 125+ Years
Whether you’re in the thick of bankruptcy or still just considering it, we know you have a lot of questions. With more than 100 years of collective legal experience, our team at Busch, Reed, Jones & Leeper, P.C. has the authoritative, dependable legal advice you need to navigate your bankruptcy proceedings with ease. We also understand the personal and emotional toll bankruptcy can take on individuals and their families, and we are motivated to provide personalized, attentive service in order to put your mind at ease.
Call (770) 629-0154 today to speak to a Marietta bankruptcy lawyer about your situation and schedule your free consultation.
Additional Reading on Bankruptcy
Got more questions about bankruptcy and how it works? We have the answers you need. Take some time to peruse our blog and learn more about your options when it comes to bankruptcy: