Manchel
New Jersey
Bankruptcy Law

Toll Free: (866) 503-5655

Email:manchellaw@yahoo.com

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On numerous occasions, Congress, unsuccessfully, attempted to pass a law granting bankruptcy judges the authority to modify loans. There is presently no such law, and bankruptcy judges and courts do not have the authority to modify any mortgages. However, mortgage companies may voluntarily modify any mortgage. Recently, due to the overwhelming number of foreclosure actions, mortgage companies have been consenting to modify mortgages, during a bankruptcy case in New Jersey. The debtors must meet the mortgage company’s criteria. Typically, the modification will make the following changes to the mortgage: change an adjustable rate to a fixed rate; reduce the interest rate; deem all payments current through and including the date of the modification; eliminate any and all arrears; increase the loan payoff by the amount of arrears; and, add the total arrears to the end of the loan. A debtor may enter into a loan modification during a Chapter 13 or Chapter 7 bankruptcy case.

Chapter 7

As explained, a chapter 7 bankruptcy case lasts approximately five months, from the filing to completion or the Order of Discharge. After an Order of Discharge, the debtor may enter into a loan modification, without a court order. Therefore, depending on the debtor’s situation, it may be beneficial to enter into the loan modification after the Order of Discharge.

Chapter 13

Typically, a loan is modified in a chapter 13 bankruptcy case, not a chapter 7 case. Prior to obtaining a loan modification, during the case, the debtor must obtain court approval. To obtain court approval, the debtor must file with the court a “Motion to Approve the Loan Modification.” The debtor must file with the motion a copy of the fully executed loan modification. Typically, no party in interest will contest the motion. If the loan is modified, the debtor will no longer be required to pay the mortgage arrears and the monthly mortgage payments will be modified. Consequently, the debtor must file with the court a modified plan, which will likely change the monthly trustee payments and the creditors who are entitled to trustee payments.

Contact a NJ Bankruptcy Lawyer

The NJ bankruptcy attorneys at the Law Offices of Robert Manchel have been handling bankruptcy cases for nearly 20 years and have, in that time, succesfully represented thousands of clients through the bankruptcy process. If you are dealing with bankruptcy in New Jersey, contact us online or call us at 866.503.5655 for a free consultation.

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      Manchel
      New Jersey
      Bankruptcy Law

      This web site is designed to provide general information regarding the bankruptcy laws. The bankruptcy laws are complex and may be applied differently, in each case, depending on the particular facts. There may be numerous exceptions and variations for each law and rule. Do not rely on the information provided in this web site. If you are considering filing for bankruptcy protection, you should consult with an experienced NJ bankruptcy lawyer. We are a debt relief agency. We Help people file for bankruptcy relief under the bankruptcy code.

      Main Office
      1 Eves Dr., Suite 111
      Marlton, NJ. 08053
      (856) 797-1500
      Toll-Free: 866.503.5655

      Freehold Office:
      4400 Route 9 South, first fl.,
      Freehold, NJ. 07728
      (732) 462-1099

      Princeton Office:
      707 Alexander Rd., Suite 208,
      Princeton, NJ. 08540
      (609) 919-0068

      East Brunswick Office:
      197 Route 18 South,
      South Tower, Suite 3000
      East Brunswick, NJ. 08816
      (732) 628-0300

      Toms River Office:
      1 Hadley Ave
      Toms River, NJ 08753
      (732) 240-2300

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      • Home
      • Chapter 7 & Chapter 13 Info
        • Chapter 7
          • How Does a Chapter 7 Bankruptcy Work
          • NJ Chapter 7 Bankruptcy Process
          • Chapter 7 and Chapter 13 Required Documents and Information
        • Chapter 13
          • How Does a Chapter 13 Bankruptcy Work
          • NJ Chapter 13 Bankruptcy Process
          • Chapter 7 and Chapter 13 Required Documents and Information
        • Chapter 7 and 13 Differences
        • NJ Bankruptcy Info
        • How Bankruptcy Affects You
        • How Bankruptcy Helps
      • Avoid Foreclosure
        • Loan Modification
        • Mortgage Foreclosure Mediation
        • New Jersey State Courts and Procedure
      • About
        • NJ Bankruptcy Attorney Robert Manchel
      • Why Hire Us?
      • Q&A
        • FAQ’s
        • Articles
        • Resource Links
      • Contact Us
        • Office Locations