Many home owners have spent the last two years struggling to pay their mortgages when interest rates jumped on their loans and the economy tanked, most were seeking relief with a loan modification. However, when one closely examines these modifications two things become clear.

First, that very few modifications are actually successful and this leaves many home owners behind on mortgage payments and in foreclosure, this leaves the person little choice but to file a Chapter 13 bankruptcy to save their home or walk away from the property. Second, even if the modification is accepted it is usually only a temporary fix, many modifications restructure only for a few years and after that the payment will return to the original loan terms and the old payment amount and interest rate.

Therefore, the lenders are guaranteed to never actually lose any of the money owed to them and the Debtor will pay in full. Over a year ago there was a great solution proposed to all these home loans that had variable rates or were substantially upside down on their value. This article discusses how a Chapter 13 Bankruptcy could be filed and the Bankruptcy Code would be amended to allow the Debtor to cram down the value of the home or reduce the interest rate.

Either one or both options would allow the Debtor to stay in their home and make the home affordable based on current interest rates. However, the bill died in Congress for many reasons, but most likely because this option would make the banks take some financial hit. So if you have attempted a modification and failed please call our office for a Chicago Bankruptcy Attorney that can try to help you save your home. Or call our Bankruptcy office today, to set an appointment for a free consultation, as it may be possible that a Chapter 7 Bankruptcy may help you in addition to a Chapter 13. Either way I will do my best to make sure I find out if Bankruptcy can help you. So call or email today so you can lose your debt and keep your dignity at 312-489-8182.

Marc Wagman

Attorney at Law