Loan Modifications Don’t Stop Foreclosure, But Bankruptcy Can
Even though the courts have instituted mortgage mediation as part of the Florida foreclosure process, there is no ruling that forces creditors to offer homeowners a mortgage modification. The news is full of stories these days of homeowners who were working with their lender through the lengthy mortgage modification process, only to find that the foreclosure process was still ongoing. What happens in this case? They still lose their homes.
If you cannot make your mortgage payments and want to be able to keep your home, bankruptcy may be your best option. In fact, it may be your only option these days. Filing bankruptcy automatically stops the foreclosure process in Florida.
If you file Chapter 13 bankruptcy, you will have up to five years to catch up on any mortage payments that are in arrears as well as time to negotiate with your lender for a mortgage modification – and you will not lose your home in the process.
If you file Chapter 7 bankruptcy, your unsecured debts are wiped out, which may free up enough income for you to be able to make your mortgage payments and keep your home.
If you are currently trying to work out a mortgage modification and have been told that the foreclosure on your home has been stopped, be sure that you have this in writing from your lender.
In addition, you should consult with a Jacksonville bankruptcy lawyer in case you need a back-up plan to save your home from foreclosure.
Greg Gilbert
Keith Maynard
