Tinkering With Chapter 13 While Rates Reset

It’s being reported that the Congress is still hotly contesting the suggested new Bankruptcy Law that would allow borrowers to modify interest rates and terms on residential mortgages. Chapter 13 bankruptcy presently allows homeowners to reinstate their loans with monthly plan payments made to a trustee, effectively curing a loan default over a 3 to 5 year period. If the law is changed to not only allow cure, but to also allow modification, Chapter 13 filings may increase even more than they have in the recent foreclosure crisis. With adjustable rates resetting on many loans, more and more homeowners will find themselves falling behind on their payments. For those who are interested in learning how Chapter 13 and other alternatives might help them, I offer free consults by phone.