Requesting a Modified Mortgage in a Chapter 7 Bankruptcy
The two most common types of bankruptcy for individual filers are Chapter 7 and Chapter 13. Chapter 7 is considered a total liquidation bankruptcy. If you are filing for bankruptcy, it may be in your best interests to work with a College Station bankruptcy attorney.
Chapter 7 Bankruptcy
In a Chapter 13 bankruptcy, you still need to make payments to creditors for from 3-5 years. With a Chapter 7 bankruptcy this is not the case. However, in order to file Chapter 7 your income must be below a certain level. Moreover, you can expect that the trustee will sell non-exempt possessions of yours in order to pay back creditors.
Requesting a Trustee to Negotiate a Modified Mortgage
When you file for bankruptcy a trustee will be named by the court to oversee the process. The trustee has considerable power, including, as mentioned, the selling of your non-exempt assets. If you are able to keep your home in a Chapter 7 bankruptcy, you may wish to obtain better terms on your loan in order to reduce the monthly payment. However, you will need to negotiate a modified mortgage, and this is not an easy task.
You may request that the trustee assigned to your case negotiate a modification to your mortgage. However, the trustee will have little incentive to do this for you because he represents the bankruptcy estate and not you. The main task of the trustee is to recover as much as possible on behalf of the creditors. Your house may be included in the selling off of assets that are not exempt, but generally this will not occur if it is your principle residence.
You likely will not be able to convince the bankruptcy trustee to negotiate better terms on your mortgage. If you cannot make the house payments, you will need to consider alternatives.
For More Information on Chapter 7 Bankruptcy
Deciding to file for bankruptcy protection is a serious matter and will have an effect on your credit for years. However, if you are at a point that you need to file it is likely that your credit has already been adversely affected. Your College Station bankruptcy attorney can work with you to make sure that you file your bankruptcy properly. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.
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