My home loan will be going to an adjustable rate this year and I have tried re-financing, I've tried negotiating with my mortgage company to freeze my interest rate, all to no avail due to my income and credit score. I have heard that there is a bankruptcy that I can file which would help me keep my home somehow, is this true?
-- Harmony
A.
Chapter 13 allows a debtor a court enforced payment plan to catch up on mortgage defaults. Under the present law, however, the court cannot alter the underlying terms of the loan. So it is not possible in bankruptcy to impose a change in the interest rate or rate change intervals.
Congress is considering a bill that would allow modification of home loan mortgages, just like every other kind of mortgages in the commercial world.
Bankruptcy can also provide an opportunity to refinance or sell the property in the normal course.
