Loan Modification - Fresno, California Bankruptcy

Loan modifications are one of the many ways that a Chapter 13 bankruptcy can help you get back on track financially. When you file for a Chapter 13 bankruptcy in Fresno County, your estate is handled by a court-appointed trustee who will work with your case throughout the proceedings. If you have certain types of debt, such as an auto loan, a secured loan, or a second or third mortgage loan, the bankruptcy judge may decide to modify any or all of these loans during the course of the bankruptcy filing.

Types of Modifications:

1.      Principal Adjustment - also known as a "cram down," the bankruptcy judge may modify or reduce the balance that you owe in order to reflect the actual value of the item. For auto loans, this may be a major reduction if your car is relatively new and has depreciated greatly.

2.      Modification of Terms - the terms of the loan itself may also be modified. This can be anything from the interest rate to the payment terms for the loan. It can also mean adjusting missed payments to be repaid over time, or moving the missed payments to the end of the loan term.

While you may be able to get a loan modification for your mortgage, depending upon your circumstances, it is not likely that you'll be able to modify the terms on your other loans as easily. Bankruptcy judges also have the ability to remove second and third mortgages entirely in some cases, so if you have these types of obligations, filing for Chapter 13 bankruptcy may be a way to further eliminate unsecured debts and make your mortgage payments affordable again.

Loan modifications are not automatic, and there are certain conditions that must be met before a bankruptcy judge will modify any loan, whether it's an auto loan or a second mortgage. In order to fully understand how this process works, you need to speak with an expert in Fresno County Bankruptcy Law. Our firm is comprised of reputable experts in bankruptcy law, and we can provide you with a free, no-risk initial case evaluation that will allow you to fully understand how loan modifications in a Chapter 13 bankruptcy may be able to help you. Contact us today and get started on the road to financial freedom - the sooner you act, the better your chances of taking advantage of everything that Chapter 13 bankruptcy has to offer, including loan modifications that can save you thousands of dollars, long term.