Homeowners in Kentucky may be able to refinance or modify their home loans in the event that they can no longer afford their mortgage payments. A loan modification may result in a lower interest rate, a longer repayment period, or other changes. This can make it easier to stay current on the debt obligation. In some cases, lenders may be willing to either defer loan payments or forgive them entirely.
If a borrower is already behind on his or her mortgage, any amount that is in arrears may be added to the end of the existing loan. Modifying a mortgage may be ideal for lenders because they don’t have to spend a significant amount of time and money foreclosing on a property. For borrowers, modifying a mortgage may be easier than refinancing because they won’t need to replace their current loan with a new one. In most cases, loan modification may only be an option for those who have good credit and who have positive equity in their homes. Speak with a loan modification lawyer Kentucky for more information.
Filing for Bankruptcy to Get a Modification
Individuals may be able to secure a favorable modification by filing for bankruptcy. Doing so will result in an automatic stay against a foreclosure. This means a borrower has more leverage when negotiating with a bank or other financial institution. Typically, a modification must be approved by a judge if an agreement is made during a Chapter 13 bankruptcy proceeding.
Those who struggle paying their mortgage should hire an attorney to provide insight into available bankruptcy and debt relief options. Homeowners who choose to file for bankruptcy could remain in their homes until their cases resolve. Anyone who files for bankruptcy protection could eliminate their unsecured debts over a period of several months or years.