Spouse May Follow Chapter 7 Bankruptcy for Credit Card Debts with Chapter 13 Bankruptcy for Mortgage Delinquency Repayment if Mortgage Modification Denied

Husband recently filed for Chapter 7 bankruptcy, and his unsecured debts (such as credit card debts) were discharged (canceled).

Now Husband and Wife are unable to pay their mortgage.

Husband and Wife apply for a mortgage modification.

Their Bank puts them on a trial loan modification reduced payment schedule while it reviews their loan application.

Husband fears that, if their application is denied, they will have accumulated a significant delinquency on their mortgage.

Can Husband file bankruptcy again, this time for a repayment plan rather than to discharge his debts?

According to a bankruptcy advisor, if the loan modification is denied, Husband can indeed file for a Chapter 13 bankruptcy and thereby reduce his and Wife’s monthly payments on their mortgage delinquency.

And Wife doesn’t have to file bankruptcy along with Husband to accomplish it.

This is an increasingly common strategy among the many people in need of mortgage modifications.

Including those going through a divorce, or planning to divorce.

Read more in this Bankrate.com column: Second bankruptcy may spare home, spouse.