When an individual is struggling financially, they may be concerned about an uncertain future. Bankruptcy may be a good option for some who wish to clear their financial slate and start fresh. In 2011, the United States Bankruptcy Court for the District of New Jersey enacted a program that allows the debtor to make negotiations with creditors in an effort to avoid the debtors home going into foreclosure. This is known as the Loss Mitigation Program.
The Loss Mitigation Program is available for any debtor who has filed for Chapter 7, 11, 12, or 13 bankruptcy. In addition, both individuals or joint filers are permitted to partake in the program. The Loss Mitigation Program acts as a form of alternative dispute resolution and allows both sides to agree on a solution that can allow the debtor to obtain some financial relief. Some of these solutions include loan modifications, loan refinancing, forbearance, short sale, the surrender of property in full satisfaction, or a combination of any of the aforementioned.
If an individual wishes to take part in this program, they must file for the Loss Mitigation Program no later than 30 days after the date in which they have filed the petition for bankruptcy. This process is relatively flexible and allows both sides to determine whether it must be extended, based on status reports with the Bankruptcy Court. The final resolution or settlement has to be approved by the Bankruptcy Court.
If you have questions about whether participation in the Loss Mitigation Program is best for your situation, contact our firm today to schedule a consultation with an experienced New Jersey bankruptcy attorney.
For strong legal representation from an experienced personal injury, bankruptcy, workers’ compensation, criminal defense, or family law attorney, contact Underwood & Micklin and we would be happy to schedule a consultation to discuss your matter.