Can I modify my mortgage in chapter 13?

17 Mar Can I modify my mortgage in chapter 13?

Clients ask me every day “Can I modify my mortgage in chapter 13?”  Unfortunately, the answer is “Not yet if you’re thinking about your home.”  The House of Representatives voted in favor of mortgage modifications in chapter 13.  But the Senate has not even considered the same bill, S 61 in the Senate.  We think that there are not yet enough votes in favor of this bill.  It seems like 60 votes will be required for this bill in the Senate.

But clients think that they can get their mortgages modified in bankruptcy now.  What can people do?

Here’s the general strategy that I have been recommending:

  • Defend the mortgage foreclosure in state court in judicial foreclosure states – raise defenses and counterclaims
  • Try to negotiate a mortgage modification at a cost you can afford.
  • Use resources such as the Home Affordable Refinance or Home Affordable Modification – see details at
  • If you are having difficulty with credit card debt, consider filing a chapter 13 case.  You can use this to cure any defaults and maintain the mortgage current while you are paying as much as you can afford under a plan on credit card debts.
  • If and when chapter 13 is amended, file an amended plan to modify the mortgage instead of simply curing and maintaing the mortgage on its original terms.

We are dealing in uncertain times. Things are changing every day.  You have to write your senator and demand that he or she vote for S 61.  And you have to be ready to file for help under chapter 13 as soon as the ful authority for doing so is enacted by the Senate.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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