Are you facing foreclosure and a stubborn mortgage lender who won't come to the negotiating table? Filing bankruptcy just may be the type of motivation your mortgage lender needs. Many debtors filing bankruptcy are often successfully able to get their mortgages modified because lenders really don't want to take the property back if they don't have to.
Below are few tips about getting the most out of a mortgage modification/bankruptcy combo:
- Don't lose communication with your lender and don't stop pushing. If you know that you have a mortgage that is unaffordable you need to continue to press for a feasible mortgage modification if you want to keep your home after you exit bankruptcy.
- Don't accept anything less than an affordable mortgage modification even if you are discharging other debts in bankruptcy. One of the biggest mistakes that debtors make when they accept mortgage modification terms is accepting a modification that places them in a worse position than they were before the modification. Don't think it can't happen to you, it has happened to even some of the most sophisticated homeowners.
- Be willing to walk away from your home in bankruptcy. We know that it is difficult to do; but the willingness to walk away from your home in bankruptcy puts you in a position of power when negotiating. Remember, if you leave bankruptcy with a mortgage you can't afford and face foreclosure in a few short years, you won't be able to use bankruptcy to help you out of the situation. The best way to avoid placing yourself at foreclosure risk is to win the modification that suits your needs or walk away from the property while you are still in bankruptcy.