Bankruptcy Court Loss Mitigation Programs in New York City
New York City is among a handful of places in the United States offering foreclosure mediation and loss mitigation as a part of the bankruptcy process. Both the SDNY (Southern District New York), and the EDNY (Eastern District New York) offer foreclosure prevention programs designed to help a debtor filing bankruptcy avoid foreclosure by working with the creditor on some type of alternative plan. Because these programs are mandated by the bankruptcy court the lender is forced to work with your attorney on a solution. You are not guaranteed a mortgage modification, but the lender cannot drag their feet or delay the process as has been shown to happen with the modification programs being offered outside of the bankruptcy courts.
These programs can help save your home whether it is a house, co-op, apartment or any other residential property. Unlike some of the other mortgage modification programs out there the programs through the bankruptcy courts will not allow for any games or delays on the part of your lender. They are supervised by the court and have strict guidelines and deadlines that must be met by your lender. In certain cases if a deadline is missed by your lender the modification is automatically granted to you. For people underwater on their bills and considering bankruptcy already, these programs are often the best way to save a home while getting a fresh start on your finances.
Entering into one of the court supervised mortgage modification programs during your bankruptcy case will give your attorney more legal avenues to help with the modification as well. Among other things your attorney will be able to assert a “standing to sue” defense which will force your lender to produce original ownership documents for your home. If your home was affected in anyway by the mortgage meltdown, these could actually be quite difficult for your lender to produce. The mortgage mediation programs are offered in tandem with both Chapter 7 and Chapter 13 bankruptcy filings in New York City, but we often advise clients interested in these programs to file Chapter 13 as it will offer more flexibility and may give you a better chance of successfully saving your home.
Saving a home is one of the primary reasons people file bankruptcy in New York City. New Yorkers are quite lucky that they are among very few court districts in the country that have specific programs included in the bankruptcy process designed to force mortgage lenders to seek home loan modifications. While the modification is not guaranteed, it will give your attorney the best fighting chance. If you live in New York City and have already had difficulty with traditional mortgage modification programs please contact the Law Offices of William Waldner online or at 212. 244.2882 to arrange a free consultation today. We only practice bankruptcy law and a have a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.
This article is intended for educational purposes only. By reading no attorney-client privilege has been created.