Tuesday, February 18, 2014

Loan Modifications During Bankruptcy

We are frequently asked whether a loan modification can be pursued during bankruptcy, especially if the borrower has been denied a loan modification prior to filing the bankruptcy.   Effective August 1, 2011, the United States Bankruptcy Court for the District of New Jersey approved a "General Order Adopting Loss Mitigation Program and Procedures" ("LMP").  The goal of the LMP program is to provide for a uniform, comprehensive, court-supervised loss mitigation program to facilitate consensual resolutions for individual debtors whose residential real property is at risk of loss to foreclosure.  When loan modifications are coupled with the global reorganization of debt, the success rate can be greatly improved.  Middlebrooks Shapiro, P.C. has been instrumental in securing loan modifications for clients who otherwise have been denied.  The loan modifications, coupled with the restructuring of all other debt, can allow the borrower to remain in their home while adjusting their debt service.  For more information regarding the loss mitigation program with the United States Bankruptcy Court for the District of New Jersey, please follow this link:  http://www.njb.uscourts.gov/content/loss-mitigation-program-and-procedures-0

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