You may have applied for a loan modification and been denied. Now what can you do to save your home? The answer may very well be to file a Chapter 13 bankruptcy case.

In Chapter 13 case you’re allowed to directly pay to your lender the normal monthly payment that’s secured by your home. We call this paying the loan “outside the plan.” At the same time, you can take the arrearage, the amount that you’re delinquent on the home mortgage, and pay that on a monthly basis with interest at a normal market rate, between 4 to 6 percent, and pay that to a Chapter 13 trustee as part of the payment that you have to make to the trustee as part of your Chapter 13 case.

This way you’ll be able to stay in your home. Now the lender has to resume accepting the payments even if they haven’t been accepting payments over several months or even years before you filed bankruptcy. You can catch up between 36 and 60 months.

The disadvantage to this is that you’re still going to be stuck with the regular loan documents and mortgage terms that you signed and that you may struggle in paying because you’re not allowed to modify a home mortgage loan in Chapter 13 bankruptcy, but it may be the last best chance that you have to save your home.

Related videos:

What Does Paying “Outside The Plan” Mean In Chapter 13? https://youtu.be/jZJxMFpueHs

What’s The Difference Between Chapter 7 and Chapter 13? https://youtu.be/4Gf4o6-ueQg

Thoughts from a Maryland Bankruptcy Lawyer

Ronald J. Drescher
Drescher & Associates, P.A
10999 Red Run Blvd Ste 205
Owings Mills, MD 21117
Phone: (410) 484-9000
Fax: (410) 484-8120
Rondrescher@Drescherlaw.com
http://www.Drescherlaw.com

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Practicing in Maryland, Delaware, Virginia, Pennsylvania