The attorneys at Sawin & Shea LLC use Chapter 13 bankruptcy combined with a mortgage modification process to help homeowners struggling with payments.
Are you facing a foreclosure on your home and getting the run-around from your mortgage company regarding a home saving modification? Have your attempts at modification been met with constant requests for additional documents, “lost” documents, and delay? Please call us today to discuss the options we can offer combining Chapter 13 (reorganization) bankruptcy with the mortgage modification process.
Attempting to make modifications to your mortgage loan can be a challenging process. For this reason, it is often necessary to work with an attorney with knowledge and experience in bankruptcy and how the modification process works in bankruptcy. Seeking mortgage modifications while in a Chapter 13 may be the answer to saving your home.
The modification process while in a Chapter 13 offers some benefits that are not available outside of the Chapter 13 bankruptcy process. The biggest difference is the use of a court-ordered portal for all document uploads and communications. Mortgage companies cannot claim you haven’t provided a document if it is visible in the portal. It also acts as a record of all communications with the mortgage company. In addition to this, our agents will work with you to put together a modification package that contains all the things mortgage companies look for, giving you the best chance at a good result.
At Sawin & Shea LLC, we have over 75 years of combined legal experience helping those struggling with debt and mortgage payments. Our team can assess your individual financial situation to help you make the best decisions possible to address your debt. We will work with you every step of the way, informing you of all options.
What is the Foreclosure Process in Indiana?
The foreclosure process can be a confusing and stressful time for those who find themselves in this situation. There are many steps that must occur and it’s important to know what all of them entail so you don’t feel shocked or overwhelmed by how quickly things change when going through legal proceedings.
Contact Sawin & Shea LLC today at 317-759-1483 to see how our team of compassionate attorneys can help you with your mortgage payments.
Traditional Chapter Bankruptcy 13 to Stop Mortgage Foreclosure
The Chapter 13 bankruptcy can help the homeowner get back on track with their real estate by giving them up to five years of time, in which they will have plenty of opportunity for catching up on payments.
What Are Mortgage Modifications?
Mortgage modifications are changes made to your mortgage loan agreed upon by you and your lender to address missed payments. Homeowners may also seek modifications before missing any payments if they are struggling to keep up or know that they will start missing payments in the near future if changes aren’t made.
Your lender may use various methods to modify your mortgage loan, but the main goal is to prevent foreclosure and the ultimate loss of your home. Negotiations on the new terms can be difficult as lenders do not like to agree on reduced payments and want to keep getting as much money as possible. They may even use tactics to scare you into making your payments to avoid serious consequences. However, if you work with an attorney, your lender will likely come to an agreement, as they too do not want to deal with the process and expense of seizing and reselling your property.
Ultimately, a mortgage modification will make your monthly payments more affordable. This may be achieved by any of the following methods:
- Changing your interest rate: Lenders may choose to lower your interest rate, allowing you to make reduced payments. They may also choose to switch you from an adjustable rate that fluctuates to a more predictable and manageable fixed rate.
- Extending your repayment period: Typically, most loans come with a set repayment term such as ten, twenty, thirty years, etc. With mortgage modification, your lender may extend this period to give you a lower payment.
- Reducing the principal balance: In rare situations, your lender may decide to reduce the principal amount of your loan. In doing so, they are essentially handing you a large sum of equity in your house. Keep in mind that this equity may be considered taxable income come tax season.
Again, though these methods seem simple to accomplish, your lender will be hesitant to come to an agreement. Ultimately, most lenders have their own best interest in mind, not yours. So working with an attorney who has experience handling financial and debt negotiations is critical if you want to succeed in getting a modification that provides you with a more affordable payment option.
Hybrid Chapter 13 Bankruptcy to Stop Foreclosure Using Court Ordered Mortgage Portal
We at Sawin & Shea are always looking for ways to help our clients in the most difficult of times. Our new Hybrid Chapter 13 reorganization plan combined with court-sanctioned modification process provides just that – an opportunity, without forcing mortgage holders or borrowers into any one option too quickly.
What Are the Benefits of a Mortgage Modification?
There are many ways that homeowners can benefit from seeking a mortgage modification. However, it’s important to note that while these modifications may offer you relief now, they do ultimately extend the life of your loan, which means you will end up paying more money in interest in the long run.
An attorney can walk you through your options to help you make the best choice. For some, the relief of reduced payments outweighs the con of owing more money in the end. In comparison, others may decide that they don’t just want to reduce their payments but want to find a better solution to reduce the overall amount they will owe.
For those that do decide to pursue mortgage modifications, the benefits can include:
- Reducing payments to relieve your financial burden
- Resolving your delinquency status with the lender
- Giving you new terms and a fresh start
- Lessening the damage to your credit score
- Avoiding foreclosure and the ultimate sale of your home
Who Qualifies for Mortgage Modification?
Depending on your lender, the eligibility requirements can vary. If these requirements are not readily available on the website where you manage your loan, you should be able to call or email them to get more information. Generally, however, to be eligible you must:
- Be at least one payment behind or able to prove that you will soon miss a payment
- Be experiencing a significant financial hardship and able to provide evidence of such. Reasons for financial hardship can include:
- Death of a family member (loss of their income/support)
- Job loss or lay-off
- Long-term illness or disability
- Uninsured loss of property
- Natural or declared disaster
- Divorce
- A sudden increase in housing costs (i.e. increased property taxes, homeowner association fees, etc.)
Even if you do qualify, a mortgage modification may not be your best or only option. A Sawin & Shea LLC attorney can sit down with you to review your situation to help you find the best solution possible.
The longer that you do things that make credit good, the better your credit score will become. We do not recommend that you fall behind in payments in an attempt to get a modification of your loan.
Applying for Mortgage Modifications
Sawin & Shea LLC can help you gather the necessary information and guide you through the application process. We will work directly with you to put the best application we can together. This gives you the best odds at receiving a modification.
Modifying a Mortgage in a Chapter 13 Bankruptcy
Unlike a Chapter 7 bankruptcy, a Chapter 13 filing will help you bring your past-due mortgage current and keep the property from being sold or foreclosed on by the bank. In a Chapter 13 bankruptcy, you will work out a repayment plan with your lender for the course of three to five years. This repayment plan will allow you to get back on track with your finances and become current with your mortgage payments while avoiding foreclosure.
However, you can apply to your lender for a loan modification during your bankruptcy which is often easier to negotiate with the bankruptcy court involved. In this situation, you will want to discuss your options going forward with your attorney. If your lender agrees to modifications and new payment terms, it may be unnecessary to continue pursuing bankruptcy. If there are benefits to following through with your bankruptcy, however, such as other debts that are included, you may want to stick it out.
Take Control of Your Finances With Sawin & Shea, LLC
Ultimately, the path you choose to seek financial relief is up to you. There are several options available should you fall behind on mortgage payments that can help you get back on track and avoid foreclosure. An experienced attorney can help you better understand your options and guide you through the process of regaining financial stability.
At Sawin & Shea, we believe in providing compassionate and understanding representation to those struggling to keep up with mortgage payments. Our attorneys specialize in bankruptcy cases but can offer assistance with mortgage modifications as well.
