Bankruptcy plan modification for Termination of Stay
If Termination of Automatic Stay is filed by your mortgage company then immediate contact with your attorney and the mortgage company is required to avoid undue foreclosure filing. Most mortgage companies are willing to work out agreement with debtors in bankruptcy. Requesting a loan modification may take up to 30 days before approved and the mortgage co. will instruct you to make any monthly mortgage payments until approved. The debtor will want plan modification filed to allow this debt to be removed from bankruptcy plan and reduce monthly plan payment. Many debtors do not fell it necessary to wait for the mortgage loan modification to be approved and become very upset when they are instructed by attorney to await approval.
For example, a debtor has received termination of stay on mortgage and has been instructed by attorney’s office to contact mortgage co. to work out agreement to retain home. The debtor wants a plan modification immediately to reduce their monthly payment. However, the attorney’s office should not file the plan modification until the debtor has confirmed that mortgage co. will approve a loan modification or will be proceeding with foreclosure process. The first modification of your bankruptcy plan should accurately reflect “Pay Direct” or “Surrender” intentions. Filing a bankruptcy plan modification prematurely will require an amended modification to be filed and causing unreasonable delay of obtaining approval of the modification.
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