Home Mortgage Modification

Checkett & Pauly receives many inquiries about using bankruptcy to modify a home mortgage. The Bankruptcy Code can be used to modify many car loans, virtually all agricultural loans, and certainly all business loans. The Bankruptcy Code cannot, for unexplained reasons, modify a home loan. Congress considered a change to the bankruptcy law during the recession that started in 2008 to allow homeowners to use Chapter 13 to record the amount of mortgage debt or change the mortgage interest so that working people could keep their homes. That proposed legislation did not go very far. So, keep in mind that although many loans can be changed in bankruptcy, a mortgage secured solely by a residence cannot.