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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I would like to file a Chapter 13 procedure so as to pay all

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I would like to file a Chapter 13 procedure so as to pay all unsecured creditors keep my current auto and RV loan and work out a deed-in-lieu for my home which does have a 2nd. I have lost 2500-3000 mo. in income and cannot continue juggling, I have used all resources in hopes something would pickup. I am not currently behind on anything, but in days will. I do not know which procedure to start, the BK or workingout/contacting my mortgage lender? I think the later would be dangerous until I know what process will help in the long run. I live in California


Thank you for your question. I am happy to assist you.

If you do not pay the mortgage, the lender can foreclose on your property.

However, many lenders are taking drastic actions to reduce their bad debts and foreclosures. They have set up loss mitigation departments willing to make mortgages more affordable for those who are unable to pay their mortgages and to expedite workout plans.

That said, I am unaware of any lender that will voluntarily modify a loan that is performing. There is no incentive for the lender to modify a current loan. Typically, a loan will be sent to loss mitigation only if the borrower is behind in payments. Accordingly, you will want to consider falling 60-90 days behind on your mortgage before you approach the lender with a mitigation plan.

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

Thank you,
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