Senate Bill 61, Helping Families Save Their Homes in Bankruptcy Act of 2009 was introduced in the U.S. Senate yesterday. A similar bill was introduced in the House of Representatives today and President-Elect Barrack Obama has vowed to sign such a bill on January 21, the day after he is sworn in as President of the United States.
The bill would lift the ban in the bankruptcy code on modifying a home mortgage down (cram down) to the value of the home in chapter 13 bankruptcy. The bill also would allow a bankruptcy judge to modify the mortgage interest rate and repayment time so the homeowner could afford to stay in his home. Current law allows for modifications on vacation homes and business properties but not principal residences.
The bill eases the debts limits for chapter 13 by excluding the mortgage debt on the principal residence, waives the pre-bankruptcy credit counseling requirement in some circumstances and combat excessive mortgage lender fees. All of these provisions will make is possible for debtors to stop foreclosure and save their homes.
About Jill Michaux
