There are a few different reasons to file for Chapter 13. Probably the first one is if you are not qualifying for the Chapter 7.
Jan. 12, 2023
MN Passes Law that Stays Foreclosure if Homeowner Is Applying for Modification
Governor Dayton recently signed into law a bill that was passed unanimously by the House and Senate. The new law creates new loss mitigation and “dual tracking” requirements. Dual tracking is the practice under which mortgage lenders simultaneously process an application for a loan modification and proceed with a foreclosure. In the past, homeowners have lost their home to foreclosure while going through the mortgage modification process. Dual tracking is a process that creates a catch 22 for homeowners in need of help with their mortgage terms. The mortgage lenders would explain to homeowners that they would not consider a modification until the homeowner was late on their mortgage (i.e., evidence of a hardship). Once the homeowner was in default, the mortgage lender would allow the homeowner to begin the application for the modification process (a process that can take months) and simultaneously begin the process for foreclosure. With the dual tracking process, the homeowner was all-in on the approval of the modification by the mortgage lender. Often times, the lender would reject the modification at the 11th hour and the foreclosure sale would go through. Under the new law, mortgage lenders must offer a loan modification or other loss mitigation option if a homeowner is eligible. The new law also provides various milestones throughout the foreclosure process by which, if a loan modification application is submitted, a foreclosure sale must be stayed. This effectively removes the catch 22 aspect of the dual tracking practice. The new law also provides the opportunity for homeowners to seek relief for violations. If you are facing foreclosure and believe the lender is not dealing fairly with you, contact Atlas Law Firm to schedule a free consultation and discuss your options.
The three common triggers for bankruptcy are unemployment, medical expenses, and divorce. Unemployment can trigger bankruptcy, which is pretty straightforward.
The trustee has a duty to conduct due diligence, and that basically means reviewing the documents that are filed by the debtor and then holding a hearing called a Section 341 hearing in which the trustee asks some standard questions of the debtor.