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Genny16

Bk7 law that helps getting a loan mod

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I have spoken to several attorneys that have confirmed there is a way to try for a loan mod by doing a bk7, I am afraid of doing this because once in. If I still can't get a loan mod, there is no way to back out of the bk. I been denied a loan mod several times, and don't know what to do, I don't want to let go of my home, yet I can afford my payment 150% now after a hardship. Has anyone experienced doing the bk 7 for loan mod purposes, and if so was it successful, how was the process?

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Yes, trust your lawyer. It's not a loan mod per se, but rather a reaffirmation that modifies the existing loan. If you can comfortably afford the regular payments, and the only issue is the arrears, the bank is typically willing to deal. But there is always some risk attached.

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Yes, trust your lawyer. It's not a loan mod per se, but rather a reaffirmation that modifies the existing loan. If you can comfortably afford the regular payments, and the only issue is the arrears, the bank is typically willing to deal. But there is always some risk attached.

 

Yes, by reaffirming but I would do some serious research before doing this only for the sole purpose in keeping your home. If you get into a pickle in the near future (nothing is written in stone with this economy), you won't be protected by the BK as you're reaffirming/reagreeing to the mortgage debt which most lawyers advise against doing when filing BK. Then you'd be on the hook for the difference and can't file again for at least 8 years. So you'd have that debt as well as a BK under your belt..for no reason. For a BK7, you have to be caught up on your payments. BK13 you don't, you might have to just work out a payment plan to pay the back payments. Do you have any other debts?

 

If you don't show a hardship, why are you applying for a modification? If they see you can afford the payments, a loan mod won't be issued to you. Have you spoke with your lender about a payment arrangement to make up the back payments? For instance, with Citi, they allow 8 months to make up/spread out the payments (made ontop of your morgage payments). They will come up with a downpayment first and once you pay that and agree to the payment arrangement, everything is set.

Edited by goturtlego

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I had a hardship at the time, but now I am back to work, and ever since I been trying to get my loan modified and it's been over a year since I been trying, and BOA is willing to allow 3 payments to be spread over 12 months, however I would have to come up with 60k out of pocket, which I dont have, and according to a lawyer, filing bk11 wld give me payment plan for the mortgage (if the banks modifies the loan at the time of the bk) plus the rest of my credit card debts, so it wld accommodate my payments but it wld give priority to the mortgage. Now this sounds too good to be true, plus I run the risk or losing my home definitely.

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Yes, trust your lawyer. It's not a loan mod per se, but rather a reaffirmation that modifies the existing loan. If you can comfortably afford the regular payments, and the only issue is the arrears, the bank is typically willing to deal. But there is always some risk attached.

 

Yes, by reaffirming but I would do some serious research before doing this only for the sole purpose in keeping your home. If you get into a pickle in the near future (nothing is written in stone with this economy), you won't be protected by the BK as you're reaffirming/reagreeing to the mortgage debt which most lawyers advise against doing when filing BK. Then you'd be on the hook for the difference and can't file again for at least 8 years. So you'd have that debt as well as a BK under your belt..for no reason. For a BK7, you have to be caught up on your payments. BK13 you don't, you might have to just work out a payment plan to pay the back payments. Do you have any other debts?

 

If you don't show a hardship, why are you applying for a modification? If they see you can afford the payments, a loan mod won't be issued to you. Have you spoke with your lender about a payment arrangement to make up the back payments? For instance, with Citi, they allow 8 months to make up/spread out the payments (made ontop of your morgage payments). They will come up with a downpayment first and once you pay that and agree to the payment arrangement, everything is set.

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I have spoken to several attorneys that have confirmed there is a way to try for a loan mod by doing a bk 7

 

My first suggestion is that you go back to those attorneys and have them put in writing exactly how the filing of a Chapter 7 will help you negotiate the modification of the loan.

 

1. Chapter 7 does not, I repeat, does not, help you save a home.

 

2. With the exception of a Chapter 12, none of the bk chapters can force a modification on a lender who is solely secured by the debtor's principal residence. Please do not get "modification" confused with stripping off a wholly unsecured junior mortgage through a reorganization bk.

 

3. Assuming you live in a state that does not have an anti deficiency statute, if you officially reaffirm the mortgage you will be sued down the road if you cannot make the payments.

 

4. A successful loan modification is not the same thing as Reaffirmation Agreement.

 

5. If you file a Chapter 7 and wish to modify your mortgage you are free to attempt such, but the fact that you did a bk, in my professional opinion, is not going to make it easier or harder to accomplish the modification.

 

Just my take on this issue.

 

Des.

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