It is an unfortunate reality that many people were severely affected by the economic downturn. We’ve all heard horror stories about underwater mortgages and whole neighborhoods in foreclosure. Some borrowers have resorted to bankruptcy. Chapter 13 bankruptcy does offer the opportunity for loan modification.
The Tampa Division of the Florida Middle District Bankruptcy Court has a program in place that allows filers of Chapter 13 bankruptcy to change the terms of their loan. Borrowers must apply for the modification within six months of filing for Chapter 13 bankruptcy. For a period of 36 to 60 months, depending on income, borrowers will pay 31 percent of their gross income as a protection to the loan provider. This payment will include property taxes and insurance. Obviously, if your current total monthly payment for your mortgage, property tax, and insurance is less than 31% of your gross income, then the modification will not benefit you. However, if you are behind on payments, the modification will allow you to catch up.
Be sure to discuss your options with an experienced attorney before you make any decisions. Stephen K. Hachey, a Florida real estate attorney, can help you navigate this process and make the most of a difficult situation. Contact him at 813-549-0096.