I WENT ON SOCIAL SECURITY DISABILITY AND OFFERED TO PAY THE MORTGAGE A PARTIAL AMOUNT BUT THEY WON’T STOP FORECLOSURE UNTIL IT IS PAID IN FULL. CAN YOU HELP ME?

The whole purpose of Chapter 13 is to help honest people who, through no fault of their own, got into financial problems.

There are two options in this current situation to help this client. Since the Chapter 13 debtor currently has a minimal budget surplus and he cannot afford to pay back the arrears over the next 60 months, he is doing a plan where he is seeking a loan modification. There is never any guarantee, but this gives the debtor an opportunity to stop the foreclosure sale.

Hopefully, even if he is not successful with the loan modification, he will be able to pay the arrears over the next sixty months to satisfy the arrears.

An Alternative to Loan Modifications

If the debtor does not receive a loan modification that is doable or he cannot afford the arrears, he always has the option of converting to a Chapter 7, where he will walk away and get a fresh start.

Over the years, some of our clients have been successful in obtaining loan modifications, while others are not approved. However, filing a bankruptcy will give debtors time so they do not have to move immediately. 

However, if possible, it is always best to be able to do a plan where you cure the mortgage arrears, since you are not adding more money to the overall mortgage and it is usually better than doing a loan modification unless your mortgage payment drops dramatically.

If you have any questions concerning any type of bankruptcy filing, please contact TAIEBLAW at 856-235-4994 or visit our website TAIEBLAW.COM.

Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 34 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.