South Florida Bankruptcy Lawyer

A Possible Change in Bankruptcy Law

In an effort to help troubled mortgage borrowers, the financial institution Citigroup Inc. has agreed to back a controversial rewrite of U.S. bankruptcy law. An announcement was made by three Democratic senators, one of who claims that the legal reform would help millions keep their homes.

What Support Means

The rewrite of the bankruptcy law in question is regarding a process known as cramdown. In cramdown, bankruptcy courts could alter the terms of mortgages, subject to certain conditions. Citigroup has agreed to support this change in the law.

Who It Would Apply To

To be eligible for cramdown, a mortgage would have to have been entered into prior to the date of enactment of the bill. It would be required that homeowners certify that they have tried to contact their lender before filing for bankruptcy.

Who is Not Eligible?

Any mortgage entered into after the enactment of the bill would not be eligible for cramdown. Also, any major violations of the “Truth in Lending Act” would invalidate creditor claims on bankruptcy.

What it Could Mean For You

As the economy continues on its downward slump, many Americans are losing jobs and homes. If you are finding your mortgage payments difficult to impossible to pay, the cramdown could possibly help you. A court would be able to change the conditions of your mortgage, either lowering payments, interest rate, or allowing you a grace period.

A South Florida Bankruptcy Lawyer Can Help

If you are at risk of losing your home or business because of the failing economy, bankruptcy may be what you need to find financial stability. Contact the South Florida bankruptcy lawyers of Eric N. Klein & Associates, P.A. at 561.353.2800 today.