More Relief May Come for Homeowners Who File for Bankruptcy

If you are a homeowner who is facing foreclosure and considering bankruptcy in order to keep your home, more relief may be on the way. Right now, you can include your mortgage arrears in your Chapter 13 bankruptcy and pay it off, but your payment and terms will remain the same. A judge has little to no authority to modify the particulars of your mortgage, like he can with other debt included in a Chapter 13 filing.

But, legislation is on the table to change all of that. We have all heard about the thousands of “subprime” mortgages that are now being foreclosed on and many are turning to Chapter 13 bankruptcy in order to keep their homes. Congress now wants to help by proposing a bill that would allow bankruptcy judges to modify the terms of a mortgage debt, just as he could any other debt.

These changes would allow a bankruptcy judge to help debtors through their Chapter 13 bankruptcy by reducing financial strain. This means a bankruptcy judge could eliminate part of your mortgage debt, reduce your interest rate, or extend the life of your mortgage so that you have more money to put towards your debts each month.

If you are a distressed homeowner considering Chapter 13 bankruptcy, contact the offices of Allmand and Lee at (214) 265-0123 to discuss your options. They have helped other good people through bad times and they can do the same for you, too.