While we wait, watch, and write Congress about amendments to bankruptcy law to enable judicial modification of home mortgages, I take comfort that those with Chapter 13 cases pending when the change becomes effective will be covered by the new provisions.
Often, a change in the law applies only to cases filed after the law becomes effective. Wisely, the bills under consideration will apply to all cases then open.
There are lots of unanswered questions about how it will work:
- is the value of the property the value at filing or at the filing of the procedure to modify?
- will the bill require some sort of threat of foreclosure to qualify
- how will the clawback formula apply when the case is already several years old at modification?
I will be delighted to deal with these unknowns if we get a bill that will keep people in their homes.
So, there is no need to wait for Congressional action to file bankruptcy if there are other issues that make filing necessary beforehand.