By way of comment, there are many practical problem that currently exist in Debtors efforts to engage in such discussions with their mortgage companies or servicers.    First, despite this General Order, many servicers continue to advise bankruptcy debtors that loan modification is not available while they are “in bankruptcy”.    As is clear by the information provided by the New Jersey Foreclosure Mediation Program and that of the New Jersey Bankruptcy Court, this is not accurate.    As there is no forum in Bankruptcy Court to address this issue, Debtors are forced to submit to the New Jersey Foreclosure Mediation Program and still proceed with their bankruptcy case.    This causes confusion for both the homeowner and the mortgage servicer.

Although there are many other practical problems, another major issue is the inability of homeowners to point to any clear standard of whether they “qualify” for a modification.     President Obama has announced a program which contains details regarding whether a homeowner may qualify for modification.   See http://www.whitehouse.gov/blog/09/02/18/help-for-homeowners/.   However, what is a New Jersey homeowner to do if they feel they qualify based on all of the stated guidelines and their lender refuses to propose or accept a modification?     These are the questions which give New Jersey homeowners facing foreclosure and bankruptcy the most difficulty and those which are currently not addressed in either state or federal law.

Under any circumstances, we continue to advise our clients to attempt to obtain modifications and to consult with their attorney prior to and during this process.     In some cases, a Chapter 7 bankruptcy case may be filed to address the unsecured credit card debt of a homeowner and reduce their “debt-to-income ratio”.     However, in all cases, debtors should consult with experienced counsel regarding the particular circumstances of their case.

This blog and site provide information about the law designed to help users educate themselves about their own legal needs. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Related posts:

1. Update on New Jersey Foreclosure Mediation and Bankruptcy Debtors
2. Mortgage Foreclosure
3. Where is a Bankruptcy Case filed in New Jersey?
4. Loan Modifications and Foreclosure
5. Sheriff’s Sale Adjournments after filing Chapter 7 or Chapter 13 Bankruptcy in New Jersey
6. Senate Defeat of Legislation to Amend Chapter 13 of the Bankruptcy Code to Allow Modification of Mortgages On Debtors Principal Residence.
7. New Jersey Bankruptcy Lawyers
8. Checklist: Tax Planning for Individuals filing Chapter 7, Chapter 13, or Chapter 11 Bankruptcy
9. Chapter 13 Bankruptcy Plan May Permit Modification of Mortgage on Under- Secured Rental Property
10. Fair Debt Collection Practices Applies to Mortgagee’s Attorneys in Foreclosure Proceedings