Many times people fall into foreclosure because of an increased mortgage payment that they cannot afford or issues elsewhere in their monthly budget. By restructuring aspects of your mortgage or other bills, you can bring your budget back into alignment in order to afford your mortgage payments.
The Chapter 13 provides many unique avenues to restructure your mortgage and other debts to improve your budget and credit.
- Loan Modification: Perhaps you have tried unsuccessfully to work with your lender on a loan modification. Since the process is entirely voluntary for the banks, you may have felt powerless to get the revised terms you desire.
Through the Chapter 13 process, our attorneys have had much success in negotiating successful loan modifications with mortgage lenders. A Chapter 13 program provides additional benefits that make it advantageous to seek a loan modification through the Chapter 13 plan, including:
- Court oversight of the process: A Judge and Trustee will keep all parties accountable for the process.
- Home Affordable Modification Program (HAMP) protection: Service’s must consider borrowers in active bankruptcies for HAMP modifications.
- Team of professionals dedicated to improving your finances. Our attorneys will deal directly with the law team at the mortgage company or assigned counsel; an avenue hard to acquire otherwise.
- Escrow Acceleration: Escrow acceleration occurs when the mortgage company advances or pays for property taxes and/or homeowners insurance they have not previously collected through the monthly mortgage payments. In this circumstance, the mortgage company typically wants to recoup the funds they advanced within a six to 12 month time period. This can often dramatically increase a monthly mortgage payment and for most people, makes their budget unbalanced.
Through the Chapter 13 plan, we can spread this escrow deficiency over the life of the plan (36 – 60 months), which will lower the monthly payment. In addition to this extended time, the escrow deficiency is paid back at 0% interest with no continued penalties.