Can I Seek a Loan Modification and File Bankruptcy?Getting a loan modification while you are struggling to pay debt can be a major concern for homeowners.  Some people even accumulate additional debt while trying to save their home or prevent foreclosure.  This may happen when a homeowner uses their credit cards to make mortgage payments or skips making payments on other obligations.  Bankruptcy is an option that can help save your home from foreclosure. However, if you are thinking about seeking a loan modification you may wonder if the two can be done together.

In many cases, it will depend on your unique situation.  The outcome of your bankruptcy may be affected depending on the timing of when the loan modification is completed or if the modification is only temporary.  Choose a bankruptcy attorney that is experienced in dealing with loan modifications, only someone familiar with the laws will be able to tell you when the right time to file is.

Keep in mind that the modification process has a trial period in which you have to demonstrate you can make payments under the new terms. There are different modifications such as forbearance; allowing the homeowner temporary time to get back in good standing or a trial repayment plan through Making Home Affordable program.  Either option can turn into a permanent modification but you have to comply with the trial period provisions.

Your loan modification may require that you do not miss any mortgage payments although some lenders may not be willing to accept payments from you during the bankruptcy process. If that is the case check with your bankruptcy attorney to see how best to handle the situation.

Consult a bankruptcy lawyer today