What to Do About Your Mortgage When Filing Chapter 13 Bankruptcy
If you're in the process of filing for bankruptcy, you're probably feeling uncertain about your financial future. This feeling is perfectly normal. But if you're worried that you may lose your home because you can't afford your mortgage payments, it's important to understand that there are options to help.
Did you know that the United States Bankruptcy Court for the Middle District of Florida has a mortgage modification program that is specifically designed to help people save their homes? This program has been the most successful mortgage modification program in the State of Florida, and it has allowed many people to save their homes during bankruptcy.
What Is a Mortgage Modification?
A mortgage modification is essentially an agreement between you and the mortgage lender to change the terms of your existing loan. This may involve reducing your interest rate, extending the term of your loan or rolling any back payments into the loan principal.
Mortgage Modifications in Bankruptcy Court
If you're one of the thousands of people in Southwest Florida who are having trouble making mortgage payments, there's still hope for you to save your home. The mortgage modification program is designed to streamline the mortgage modification process. In the past, you often had to worry about lost documents when asking for a mortgage modification, but with the new process, those days are virtually gone. Additionally, there is court supervision, which has leveled the playing field while eliminating the no-reason turndowns of mortgage modifications in the past.
The new Chapter 13 mortgage modification mediation program began in June 2013 but the process has been continually streamlined since the program was implemented.
If you're a Chapter 13 debtor and want to keep your home but cannot afford your current mortgage payment, you may be eligible for the new mortgage modification mediation program.
1) When you request mediation, you and your lender will discuss whether modifying your mortgage is feasible.
2) If successful, you may be able to lower your monthly payment amount in order to keep your home.
3) You are able to come up with a plan of reorganization that will consolidate all of your other unsecured debt.
Mortgage Modification Mediation
Mortgage modification mediation is an informal meeting conducted by a neutral mediator who acts as a facilitator of the discussion. The mediator is unable to force a lender to modify your mortgage, but they are able to help you and your lender reach an agreement. This mediation is a simple way for you and your lender to discuss whether it's possible for you to modify the mortgage on your property. There are times when mediation may not even be necessary if the parties have come to an agreement before the date of the mediation.
How to Qualify for a Mortgage Modification
If you're filing for Chapter 13 bankruptcy and saving your home is a priority, seek the services of an experienced bankruptcy attorney, preferably one that is Board Certified in Consumer Bankruptcy Law. It is ok to ask them if they are Board Certified. They will assist you in filing for a Motion for Referral to Mortgage Modification Mediation.
To qualify for the program, you need to be able to:
- Contribute up to 31% of your gross income to the modified mortgage payment
- Pay a mediation fee before your scheduled mediation
At the Dellutri Law Group, we have handled many foreclosure mortgage modifications in the Bankruptcy Court, and our clients are receiving a fresh financial start while staying in their homes. Chapter 13 bankruptcy allows you to reorganize all of your debts, both past and present Chapter 13 offers consumers a multitude of options to explore that don't require you to lose your home in the process.