If I File For Bankruptcy, am I eligible for a Loan Modification in New York?
Filing for bankruptcy in New York will not affect your eligibility for a mortgage loan modification thanks to some helpful new regulations handed down by the Obama administration. Similarly, filing for bankruptcy during a trial modification will have no bearing on its approval. Lenders can’t halt the modification process or make you start over. Since the housing crisis began we have recommended our clients seek loan modifications before filing for bankruptcy, but without these new regulations in place it has been difficult until now to keep other creditors at bay while waiting for the modification’s approval. In fact in New York City there is a Loss Mitigation program that can help you get a mortgage modification approved.
Bankruptcy in and of itself will not modify a mortgage loan. However, while in Bankruptcy there is an automatic stay that can prevent your home from being sold while seeking a loan modification. In a Chapter 13 Bankruptcy mortgage arrears can even be paid off during the case. In a Chapter 7, it is often the case that foreclosure proceedings are stayed throughout the case and the mortgage modification process proceeds in a better direction.
What this means for most of our clients is that they no longer have to make a very tough choice between eliminating their unmanageable debts or keeping their home. This is the true financial relief most of our clients in New York really need and what bankruptcy laws were created to do. Our clients do not have to reaffirm a bad mortgage loan in order to keep their home, and they can also now freely eliminate all their other bad debts without worrying about how the discharge will interfere with a modification. Realize that if you need a loan modification to keep your family in your home, you can get the modification you need without having to wait on filing for bankruptcy. Hesitation can be a big mistake, so get the answers you need from a qualified attorney as soon as possible.
If you live in New York, get the pros and cons of bankruptcy and home loan modification for your specific case from the Law Offices of William Waldner. We will explore the best way to keep you in your home which may not even call for a modification at all. Arrange a free consultation online or by calling 212-244-2882. We are a boutique law firm that offers affordable debt relief assistance for all New Yorkers.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.