Homeowners may experience changes to their finances that affect whether they can make mortgage payments after a loan modification. Some homeowners in this situation may find it challenging to determine a solution if their lender isn't willing to work with them, especially if foreclosure is looming. While many try to avoid filing for bankruptcy, this may be an option worth reviewing.
Chapter 7 bankruptcy discharges eligible unsecured debt, which may leave more income for mortgage payments. Chapter 13 bankruptcy helps develop a repayment plan on certain debts. Chapter 13 can help you keep your home but you should review your situation and qualifications with a bankruptcy attorney.
Keep in mind, some lenders may not be willing to work with you again after getting a loan modification already. The fact that you were delinquent before, then had loan terms revised and then became delinquent again may have them reluctant to make another modification.
If you are not able to obtain another loan modification but decide to file bankruptcy, discuss what options can be done with a legal representative about communicating with your lender during proceedings. Some lenders may not communicate with you directly during the proceedings due to the automatic stay associated with bankruptcy. Questions and concerns should be reviewed with your lender, licensed housing counselor and an experienced bankruptcy attorney .