Providing Thoughtful and Effective Representation Through Challenging Times

Chapter 13 vs. Loan Modifications

Wondering whether to accept your bank's proposed mortgage modification after a Covid-related forbearance?

Banks usually require you to choose from several options at the end of the forbearance period....Immediately pay the deferred installments in a lump sum? Extend the term of the mortgage for years? Increase the interest rate? Or kick the can down the road by extending the forbearance period? How to choose?

Well, each and every option offered by the bank may be financially unwise...or impossible.

A chapter 13 bankruptcy plan may provide a better alternative.

Chapter 13 allows you to treat mortgage arrearages resulting from a forbearance agreement just like any other mortgage arrearages. You can cure them in monthly installments ranging from 36 to 60 months while keeping all of the terms of an otherwise favorable mortgage intact. So, if your mortgage has a good interest rate, you keep it. If you are only a few years away from paying it off, you keep that, too.

For more information about how chapter 13 bankruptcy can be a powerful tool for reinstating home mortgages, click here.

And please contact me if this is something that might benefit you. I will be happy to discuss further.

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