Can i still apply for loan mod if i file for bankruptcy?

[ANTHONY6977]

I have quite a bit of debt and am considering filing for bankruptcy. I would like to know if i would still be eligible to get loan mod if i choose to go that route? thanks

ASC lender

[Moe Bedard]

Hi Anthony,


Welcome to the forum and thank you for joining.................


If you file a Chapter 7 BK you may need to wait until the bk is disharged before going through the modification process and the payments would need to be kept current during this time as well.

If you file a Chapter 13 BK you may need permission from the court and your lender to go through the process of modification which you should be able to get with the help of your attorney..........however, some lenders require that if an automatic stay is put in place, it be lifted in order to go through the modification process................

these are questions that you can ask your attorney during the consult.

[ANTHONY6977]

Thanks for you speedy reply to my thread. since posting the thread i have been exploring this website and have come acrross bk/removing 2nds. To get that accomplished is there a particular bk that needs to be filed? 7,13. Also i didnt quite understand what you mean by keeping my payments current if i file for bk 7. Im currently behind on my mortgage.

[Moe Bedard]

The lien stripping is with a Chapter 13.......
and if you are going to file a Chapter 7 you would need to ask the lender what their criteria is for being able to modify.............since you are not current at this time...........you will need tosee what they say.

[robijamie]

We are currently in CH7 bk, and we haven't been discharged yet. We just had to get a letter from our attorney letting the lender speak to us during bk. We aren't sure we will end up with a modification or not, but it is worth trying. Otherwise, we will walk away and the debt of the home discharged. We are late on our payments, but weren't the day we filed.

[ANTHONY6977]

I understand that in order for a lender to offer or entertain doing a loan mod there has to be some disposable income left or not be negative after all expenses. My question is if for example

Lets assume that borrower has $200 disposable income at 6% rate, however once his loan adjusted to 8% rate he no longer was positive, he was negative disposable income. When applying for loan mod will they look at his disposal income before his rate adjusted or after his rate adjusted?

[ANTHONY6977]

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I understand that in order for a lender to offer or entertain doing a loan mod there has to be some disposable income left or not be negative after all expenses. My question is if for example

Lets assume that I have $200 disposable income at 6% rate, however once my loan adjusted to 8% rate i no longer was positive, i was negative disposable income. When applying for loan mod will they look at my disposal income before his rate adjusted or after my rate adjusted?

[LHarveyMadman]

That was more or less the argument that I made for my modification - that when my ARM reset, I would have trouble affording the payment. My lender (B of A) must have accepted that reasoning, because they modified my loan.

[ANTHONY6977]

Just got a foreclosure proceedings letter, can i still do a loan mod?

[beachymama]

Yes, you should apply for the loan mod to stop the foreclosure proceedings.