The United States Bankruptcy Code protects home mortgages, stating that a Chapter 13 Bankruptcy Plan can not modify the rights of a lender whose mortgage is secured by the bankrupt’s residence. The exception is a mortgage for which the last payment is due before the final payment of the Chapter 13 Plan.
We recently helped a bankrupt reduce the balance, interest rate, and monthly payment on the second mortgage on her residence. This mortgage ballooned prior to the filing of her bankruptcy. Since the equity remaining in her home after consideration of the first mortgage was only $ 98,000.00, we succeeded in reducing the second mortgage from $ 216,000.00 to $98,000.00 principal, and also reduced the interest rate from 17.99% to 7.5%. As a result, our client will satisfy a $ 216,000 second mortgage by paying only $ 115,763 (including interest) over the 60 month Chapter 13 Plan. Then her home will be released from this second mortgage.
The Law Offices Of Todd S. Frankenthal assists clients in financial distress to get a fresh start. The law firm has offices in Fort Lauderdale, Boca Raton, and West Palm Beach.