Modify Mortgage During Chapter 13 Bankruptcy

One possible avenue to save your home from foreclosure may be to file for Chapter 13 bankruptcy relief and then to negotiate with the mortgage servicer for a mortgage modification while the Chapter 13 bankruptcy is pending. The filing of the bankruptcy stops the progress of the foreclosure action and may give the homeowner many months to negotiate a modification. Perhaps the mortgage company may be more willing to allow a mortgage modification if faced with the alternative of a Chapter 13 bankruptcy plan.

As an example, a mortgage company recently modified the mortgage for one of this firm's clients to add the $50,000.00 arrearage to the back of the mortgage and changed the interest rate from an adjustable rate mortgage presently at 11% to a 7% fixed rate.