Have you heard the new Chapter 13 proposal?
Because the new proposal will take years to be approved by the legislature, the NACBA has made the proposal directly to investors, insurers, and government agencies. If all of the above agree, it will become real and the strongest tool for bankruptcy filers to remedy their underwater housing problem.
The key points of the plan are:
- The Plan modifies certain undersecured (underwater) mortgages in Chapter 13 bankruptcy so that all payments go directly to principal throughout the life of the plan.
- During the three or five-year period, the borrower’s minimum bankruptcy plan payment is 31% of gross monthly income. Sound familiar?
- At the end of the initial five-year period, the remaining principal balance is amortized over 25 years at the Freddie Mac survey rate
- The feasibility of the plan for the debtor is determined the same way plans are now, with the bankruptcy judge and trustee’s office approving it.
- This is the not a “cramdown” as that term is commonly used.
Debtor must waive all claims against the lender and everyone wins. A government petition is going on right now if you want to join in.
Arnold, Wadsworth & Coggins Attorneys is a premier Utah law firm serving the Wasatch Front in the areas of family law, bankruptcy, criminal law, and civil litigation. Our attorneys provide clients with exceptional legal representation and personal attention. With over 35 years of trial practice and litigation experience, we bring big firm expertise at affordable rates
