Mortgage Modification Rejection
For many homeowners, especially those still struggling to recover from the impact of the housing market downturn, mortgage modification is an ideal way to solve some of their financial issues while maintaining ownership of their home. However, not all proposals for a mortgage modification are approved by the lending entity. When this occurs, it can leave homeowners in a precarious situation, with no way to make their mortgage payments and at risk of losing their home. Fortunately, there are still options available that can help a family keep their home.
If you or someone you know has had a mortgage modification request rejected by your creditor, you should consider filing for Chapter 13 bankruptcy as a way to keep your home. Contact Birmingham bankruptcy attorney Paula Greenway today at (205) 324-4000 to speak with a qualified legal professional about the details of your situation and learn more about whether bankruptcy may be right for you.
Benefits of Bankruptcy after Mortgage Modification Rejection
When a homeowner’s mortgage modification plan is rejected, they may face foreclosure on their home. However, by pursuing Chapter 13 bankruptcy protection, their most important assets, including their home, can be protected against foreclosure. This is one of the primary benefits of filing for this type of bankruptcy after mortgage modification rejection. Other important benefits include:
- Reduced loan repayment plans
- Protection from asset forfeiture
- Limited debt discharge
Furthermore, the damage to an individual’s credit score that a Chapter 13 bankruptcy can cause is often not as significant as home foreclosure would be. While Chapter 7 bankruptcy allows a person to exempt up to $5,000 of home or real property and $3,000 for any property (wildcard exemption), this is only useful for those who owe less than $8,000 on their home. Thus, for all of these reasons, Chapter 13 bankruptcy may be the best available option following a rejection of a mortgage modification plan.
If you or someone you know has had a mortgage modification plan rejected, we can help you explore your best options for keeping your home. Contact Birmingham bankruptcy lawyer Paula Greenway at (205) 324-4000 today to discuss the details of your situation and learn more about your rights and options under the law in these difficult circumstances.