Homeowners considering a mortgage modification may wonder how it relates to filing for bankruptcy. Of course, the two are separate actions, but may go hand in hand to grant the homeowner some relief. Mortgage modifications may be applied for while bankruptcy proceedings are taking place. Depending on the type of bankruptcy that is filed for, the mortgage modification may need to be approved by the court. If the homeowner files for Chapter 7 bankruptcy, then the mortgage modification may need to be approved, depending on the rules of the mortgage company. If the homeowner files for Chapter 13, then approval from the court must be obtained, regardless of whether the mortgage company asks for it or not.
There are some situations where filing for bankruptcy shortly after a mortgage modification makes sense. For example, if a homeowner is worried about the credit impact that either bankruptcy or a mortgage modification can have, the homeowner could do both in generally the same time so that the homeowner can start over, and start working towards their financial goals.
The Mortgage Modification Center
If you have any questions on mortgage modification or bankruptcy, please do not hesitate to reach out to Attorney John S. Simonian at the Mortgage Modification Center. Attorney Simonian has helped numerous families throughout Rhode Island and may be reached at (401)467-7998 for your free initial consultation.
Attorney John S. Simonian is a Rhode Island and Massachusetts lawyer who specializes in bankruptcy law and mortgage modifications. Click here to learn more about Attorney Simonian.