The Obama home loan modification plan turned out to be a disaster. Far too often, the banks told people that they needed certain documentation in order to qualify for a home loan modification. However, once the homeowner would send that documentation off to the bank or credit union, they would only be told in the upcoming days that they needed to send off documentation.
The real tragedy was that often times people were told that in order to be eligible for a home loan modification of their mortgage payment, they could not be current on the note. After months of frustrating conversations on telephone calls with different representatives of the mortgage company, they then learned that they were not approved for the loan modification and were then set for a foreclosure sale.
This unfortunately happened right in the middle of the "Great Recession" that our country just endured. In the middle of dealing with frustrating and often futile efforts with home loan modification, many Americans (and many of us here in Collin County and Dallas County) experienced loss of jobs, reduction in income, death, divorce, illness, or increase in the size of the family and/or dependents. In short, it has been a tough few years for everyone in our country.
In addition to frustration with failed mortgage modification attempts, many who experienced the additional issues above are faced with credit card debt due to being left with no other choice but to lean on unsecured creditors to make ends meet. Many Americans have unpaid medical bills that are mounting up and increasing daily. Unfortunately, sometimes there is no other answer other than to seek your debt relief options. Many times, the best answer to save your assets and reduce your debt in addition to rehabilitating your credit score is to file either a Chapter 7 or Chapter 13 bankruptcy.
Most of the time if someone is eligible and passes the Means Test, then Chapter 7 is the better of the two Chapters of bankruptcy that most individuals file. However, if your loan modification has failed, and you are behind on your home loan and are facing foreclosure, then Chapter 13 can help you get current and save your home.