Mortgage modification
Homeowners filing for bankruptcy but keeping their house may wonder how long they need to wait before they are able to modify the terms of their mortgage. The answer would depend on the bankruptcy case. Mortgage modification is a popular option these days for homeowners wishing to continue staying where they are but needing assistance because of limitations on their means along with drastic reductions in home values. While the automatic stay applies to all accounts held by a bankruptcy debtor, the mortgage company may contact their account holder directly to discuss the terms of continued payments. However, they would be prevented from practically effectuating a change in mortgage terms until after the debtor has received an order of discharge for a Chapter 7 case or until after the approval of a Chapter 13 reorganization plan by the court. In the District of Massachusetts, the deadline for objections is generally set approximately two months after the date of the creditors’ meeting and soon thereafter the court can be expected to grant an order of discharge if there are no objections. However, if the case is prolonged for any reason, this would then prolong the granting of discharge for this period. Debtors should know from their bankruptcy lawyer the estimated period of time for them to receive a Chapter 7 order of discharge based upon the date set for objections to the case.
Disclaimer: This does not constitute legal advice. Please contact a bankruptcy attorney in your jurisdiction for questions related to your individual situation.
