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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.
I filed a BK 13 in an emergency to stay a foreclosure trial that I would have lost. My ultimate goal
is to get a loan modification outside of BK and the credit counselor is telling me that the Bank
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
before that mediation session?
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.
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?
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