Can Bankruptcy Get Mortgage Relief? Congress is balanced to give bankruptcy judges more power to modify primary home mortgages in an attempt to stop the foreclosure crisis, a move Democrats and housing advocates have been pushing for two years in the face of hard opposition from Republicans and the mortgage industry.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt decreased through mortgage reformation as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. Back in 2005 when Congress overhauled the bankruptcy laws, one of the provisions under consideration was a provision that would have allowed bankruptcy judges to rewrite residential mortgages based on the current value of the real estate. That provision was dropped from the legislation under strong lobbying.

However, the mortgage industry, with a few exceptions, opposes the bill. Can Bankruptcy Get Mortgage Relief? Companies argue that allowing bankruptcy judges to modify mortgages for primary residences eventually would hurt consumers because lenders would have to increase loan costs to compensate for the improved risk that some principal might be forgiven.

Before reaching the serious stage of bankruptcy or foreclosure, find out if refinancing or changing your mortgage is available. In response to widespread economic crises suffered by so many homeowners, the Making Home Affordable program offers relief.

Currently, bankruptcy recommends very limited protection to a homeowner who is upturned with his or her payments. The borrower can file a Chapter 7 which, depending on the state bankruptcy law, will most likely require him or her to surrender the property to the bankruptcy court, or file a Chapter 13 debt repayment plan to stretch out prior delinquent payments over a number of months or years in the future. However, no bankruptcy proceeding can improve the terms of an existing home loan on a principal residence. Legislation is being proposed to Congress that would allow bankruptcy judges to modify the terms of an existing mortgage loan. I would not hold my breath. It could take years to make further substantial changes to the bankruptcy laws.

A mortgage is a type of installment credit. It probably seems that such a big loan would be impossible to obtain after bankruptcy, but in reality it is one of your best choices. It is totally possible to get a mortgage loan post-bankruptcy. Possibly because it is such a big commitment and because the loan will be secured against your house, a mortgage is relatively easy to obtain by the formerly-bankrupt. There are even some lenders who will consider lending to you right away after your bankruptcy, as in, days afterward.

Now, many people are seeking mortgage relief, because of foreclosure and adjustable rate mortgages. As you have probably heard, many lenders have gone out of business because of the foreclosure problems nationwide. The lenders that have not gone out of business are being charged for mortgage fraud. The government has even stepped in with a new foreclosure bill, to try and give mortgage relief. To know more about mortgage relief, visit http://www.onlinebkassist.com.