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Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26106
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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I just received an information subpoena from a lawyer attempting

Resolved Question:

I just received an information subpoena from a lawyer attempting to collect on an old credit card that is now a judgment, I'm concerned that once they find out that I am working they will try to garnish my wages, I plan on filing a Chapter 7 BK,

however, I am waiting because I am currently in the process of getting mortgage loan modification, and I was told that if I file a Chapter 7 before the loan is modified and made current, the trustee my opt to dispose of the house.

I would like to know if it is possible to file a Chapter 13 to back them off -

leaving out the mortgage - and then once my mortgage is modified converting to

a chapter 7 to seek a discharge of my credit card debt
Submitted: 11 months ago.
Category: Bankruptcy Law
Expert:  Roger replied 11 months ago.
Hi - my name is XXXXX XXXXX X'X a Bankruptcy litigation attorney. Thanks for using JA! I'll be glad to assist you with this question.

Yes, it is possible to file Chapter 13 and apply for a loan modification simultaneously to prevent further mortgage debt from accumulating, and also stop any foreclosure. .

As you know, the bank may take weeks or months to approve or deny a loan modification application, and if the application is denied, the lender may foreclose on the property and plan to sell the house right away. Filing Chapter 13 bankruptcy stops the foreclosure process and prevents the lender from adding more fees to your mortgage.

But if you get your loan modification done during your Chapter 13, it would be possible to convert to a Chapter 7 and then re-affirm the debt through a reaffirmation agreement with the lender.

Thus, what you're suggesting is possible.
Customer: replied 11 months ago.

My concern is not so much with the lender, they have already sent me a notification indicating that they have suspended any sale while they are reviewing my loan modification process,


 


but I would like to stop all the calls that I get and this newly received information subpoena, that I received -


 


I just want to be sure that conversion from Chapter 13 to Chapter 7 is possible and not unprecedented.


 


I also don't know that I want to spook my mortgage company with a BK filing - I'm trying to go for a Making Home Affordable Modification.


 


I also wanted to find out how long can we stall the Chapter 13 to allow


 


the mortgage company to come to a decision,


 


they actually said they would be making a decision within 30/45 days


 


The loan is with Ocwen,


 


I'd like to stay in the 13 until their decision is made


 


 

Expert:  Roger replied 11 months ago.
No, this isn't unprecedented. Chapter 13 cases are converted all the time to 7's, and mortgages, etc. are reaffirmed. Thus, it's nothing new.

Filing bankruptcy could raise some concern for the lender and loan modification, but if you can show the ability to pay, it should not prevent the modification from going through.

If you're 30-45 days from a decision, then you can stay in chapter 13 that long without any real issues. You have at least 120 days to file your proposed repayment plan, so that wouldn't be due before the loan modification is determined.
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26106
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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