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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2822
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I have additional questions regarding BK & Foreclosure Med

Customer Question

I have additional questions regarding BK & Foreclosure Mediation
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 5 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

The chapter 13 stops the foreclosure process. Many chapter 13 debtors can qualify for loan modification. Each bank is different, so you need to apply thru your bank to do so. The bankruptcy cannot disqualify you from the program, but you must meet the terms, and you may need to seek approval in bankruptcy court to finalize the modification.

Customer :

I filed a BK 13 in an emergency to stay a foreclosure trial that I would have lost. My ultimate goal

Customer :

is to get a loan modification outside of BK and the credit counselor is telling me that the Bank

Customer :

will have little interest in modifying my loan because I am already in a BK 13. I have a mediation session schedule for Feb15 in the NJ State Foreclosure courts and am trying to guage weather it is better for me to dismiss my BK 13

Customer :

before that mediation session?

Terry L. :

Since the chapter 13 cures the default, you are in a better negotiating position (assuming your case is feasible) You can apply for a loan modification with the lender during the case. Many of my clients have been successful. You get automatic stay protection, so they cannot foreclose until the stay protection is modified (usually only when there is a default in post-filing payments). If you dismiss the case voluntarily, it may draw a 6 month bar to refiling, and the lender can foreclose. There is no guarantee the lender will work with you if you are dismissed, so keeping the case intact is usually the best route.

Customer :

I would prefer to go forward outside of a BK 13 due to it's restrictions, so if I am able to come to an agreement with the bank on a modification and start to make payments , can I then dismiss my BK 13 after I begin payments?

Terry L. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
I have some additional questions. May I contiue to get your help?
Expert:  Terry L. replied 5 years ago.
Yes, you can start a new question each time, feel free to request me and I'll be flagged to help you.
thanks!
Terry
Customer: replied 5 years ago.
If a loan modification is granted by the Bank, can I start to make payments and then
dismiss my BK 13 plan?
Expert:  Terry L. replied 5 years ago.
You can, but I would recommend modifying your plan to just take care of the rest of your debts since the bankruptcy will be on your record for 10years, might as well get the benefits.
Customer: replied 5 years ago.
Two part question (1) Are you saying that going into a NJ Foreclosure Mediation , I will have better leverage for obtaining a Loan Modification by being in a BK 13 because the NJ appointed Credit Counselor is stating that the Bank will have less incentive to modify my loan since I am already in a BK 13 (2) If I do get a loan modification and start making payments, then I can dismiss my BK 13 in other words id there any diference in a loan modification made in BK 13 versus outside a BK 13?
Expert:  Terry L. replied 5 years ago.
1. Loan modifications are not impacted by bankruptcy filings, they take them on the facts of your case -debt to income ratio etc.

2. You can dismiss your case if you want, however, I would not if it was me.