What Is A Loan Modification As It Might Relate To A Bankruptcy?
A loan modification is a process whereby a lender will modify the terms of a loan, such as by reducing the interest or the amount of each payment. Some modifications involve extending the length of time for repayment. Loan modification requests may be denied if you owe a significant amount of debt. In such cases, filing for bankruptcy may be a good option for eliminating debt and getting approved for a loan modification. I have had clients that were denied loan modification and, after filing bankruptcy, reapplied and were approved.
Can A Loan Modification Stop Foreclosure?
A loan modification will stop a foreclosure. During the time that a lender is considering a loan modification application, they are required to pause the foreclosure process.
Will The Bank Stop Pursuing My Home If I File For Bankruptcy?
During Chapter 13 bankruptcy, the bank will stop pursuing a home because the debtor will be actively paying back the past due amount. Chapter 7 bankruptcy will stop the bank and creditors from pursuing a home (and other assets) for about one to four months.
How Do I Know If A Loan Modification Is Right For My Situation?
In order for a person to determine whether a loan modification or bankruptcy is better for their particular situation, they should speak with an attorney.
How Would You Advise Someone Who Wants To File For Bankruptcy On Their Own Without An Attorney?
Bankruptcy is a very detailed process that involves a lot of paperwork, has specific requirements, requires adherence to the code and rules, and requires certain disclosures. Many people don’t realize that the failure to disclose assets or provide certain information can lead to the dismissal of their case and possible sanctions against them. Anyone who is serious about filing for bankruptcy should talk to an attorney who has experience with bankruptcy and can guide them through the process.
For more information on Loan Modifications Relating To Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 509-8989 today.
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