Yesterday, a nice client was supposed to come in and meet with me. He had contacted me over one year ago for help in trying to refinance his home in the Bronx. At that point, he didn’t qualify for financing and mortgage brokers were unable to help him. We discussed his other alternatives and I told him to do something very soon, but the client sort of disappeared. I hadn’t heard from him in over one year until this week. We scheduled an appointment for him to come in immediately for a possible Chapter 13 filing to stop his foreclosure. He didn’t show up so I called his cell. That’s when he told me that he just found out that the property had been sold at auction the day before. That meant that it was too late for Chapter 13 to help him. That is the price of waiting too long. Unless he has some basis for an order to show cause to vacate his default, he has very likely just lost his home.

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.