Mortgage Troubles and Bankruptcy in New York City

Mortgage Troubles and Bankruptcy in New York City

You may actually still be in luck if you have fallen behind on your mortgage payments and live in New York City. You just happen to live in one of the only court jurisdictions in the country with a built in loss mitigation program designed to help debtors save their home during the bankruptcy process. The SDNY (Southern District New York), and EDNY (Eastern District New York) both have a system that combines bankruptcy relief for your debts with court monitored assistance to help you negotiate a modification for your home mortgage with your lender.

All judges in the SDNY currently allow simultaneous participation in a bankruptcy case and a court run loss mitigation or mortgage modification program.  Most but not all bankruptcy judges in the EDNY currently allow for these programs as well.  If you happen to get unlucky in this respect in the EDNY a good bankruptcy attorney in New York City will know how to refile the case, and our firm too believes that everyone facing the loss of their home should have the chance to work with their lender to save it.  Having the power of the bankruptcy court behind the negotiations strongly improves our client’s chances of success.

If the court monitored loss mitigation program works you could potentially stretch out your new adjusted mortgage and your past due mortgage payments over the next 40 years.  Successful with the modification or not, Chapter 13 will help you save your home by preventing immediate foreclosure and will allow you to catch up on mortgage arrears over a period of 3-5 years.  Depending on your exact financial troubles and the other toxic debts you have, Chapter 13 bankruptcy could be a slam dunk for saving you home.  Think about it; let’s say you are $10,000 behind on mortgage payments.  In a Chapter 13 plan you would be able to catch up on that $10,000 over the period of 60 months.  That’s only $167 per month plus another 10% to the bankruptcy trustee.  Even with a mortgage that can’t be modified this kind of deal is usually a no brainer for most of our clients.

While we’re at it we should also tell you that your attorney’s fees can also be paid off through your Chapter 13 plan.  You can get the advice you need to save your home now and then pay for it over the next five years just like your mortgage.  Chapter 13 will eliminate toxic credit card debt, medical bills and other loans, and can even eliminate second mortgages entirely.  If you live in New York City losing your home to foreclosure is probably worse than any negative consequences that could come from bankruptcy.  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 maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

**** DISCLAIMER:  This article is intended for educational purposes only.  By reading no attorney-client relationship has been created.  Prior results do not guarantee a similar result for future clients.