Waiting on Loan Mod Approval During Ch7.

[Sariah]

I am CH7 Pro Se and waiting on loan mod approval from Bank of America.

What if my bankruptcy gets discharged while waiting on the approval of my loan mod and then they don't approve me?

Will I be able to then re-open my Ch7 case if my loan mod does not get approved and surrender the house? Or how about filing a Ch13 to keep it or is there a waiting period to do that?

[sh9730]

I am in the same boat (although I didnt file for my mod until after I filed BK). But my belief (others will correct me if wrong) is that since the DEBT is part of the BK filing (requirement), that unless you sign a reaffirmation agreement (and there are plenty of posts here discussing the reasons that might not be a good idea), the debt will be discharged in the BK. So, if you (or I) dont get the modification, and then dont bring the loan current plus all the additional fees incurred, then they can start the foreclosure process, but you would still NOT be responsible for the deficiency.

Then, during the foreclosure process you can either stay as long as possible rent free like many, or try and work out some arrangement like cash for keys to get out sooner etc...

OR as you state, change to CH13 if keeping the house is vital. I also may avail myself to that if required although I have not decided for sure. Changing to a CH13 is a big decision that will affect your finances for years. But, like you seem to be thinking, I may just have enough reasons to stay in this house to go for it, I ll see when/if the time comes.

But the BK stuff is already set in stone unless you sign a reaffirmation agreement.

[Sariah]

Three-five years for a 13 just seems like a very long time so hope a timely mod before discharge ch 7 will help.

[murphsmom]

We got the loan mod solidified before filing (filing May 31st), at the suggestion of our attorney. No one really seemed to know for SURE how a BK would affect the loan mod, but the did know that if the loan was modified first, it shouldn't affect the bk, as long as the mortgage was reaffirmed.

There was basically no sense in filing a ch7 then modifying the mortgage, because you'd have to reaffirm the loan twice, once for your current loan, and then again once modified. My biggest reason for waiting to file until after the mod was completed was that I didn't want ANYTHING messing with the modification. We needed it.

Our mortgage is through a local credit union, not a huge company on the scale of BOA, who seem to be very far behind on these mods. It could take awhile. We applied, completed trial period, were approved, and now it's official, all within a 4 month period.

If you tell BOA that you are filing Ch7, you may be surprised at how quickly they put your loan mod on the top of the pile.