Can A Loan Modification Prevent A Bankruptcy?

: Chris Lee Law Firm

  Filed under: Mortgage

strategiesBeing in debt is not a pleasant situation to be in. It can result in the debt burden becoming so great that it spirals out of control. People in this situation become desperate and live in constant fear of losing what assets they may have. They are constantly having to deal with the incessant nagging of bill collectors wanting their money and even your home.

Keeping Your Home

In some cases, considering a loan modification is an effective solution for preventing foreclosure, but like all financial matters the foreclosure process is complex. What this is comprised of is a change in terms of your borrower’s loan. It could include one or more of the terms that are being modified. The desired results are the loan is reinstated and more affordable payments are arranged. This can only take place once a year. A lender also has to determine if you are eligible for a loan modification.

If your debt burden has become so great that the lender doesn’t feel that even with a modification that you will be successful at making your payments, then they could refuse to allow you to do this. While they don’t want to see you go bankrupt either they have to choose what they feel is going to be the best option for them to recoup their money. This could be either through a Chapter 13 bankruptcy perhaps, or it being a secured loan under chapter 7 bankruptcy. It is most important that no matter which bankruptcy route you are taking that you use a qualified Fort Worth bankruptcy lawyer to handle the matter for you.


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