Loss Mitigation/Home Retention Challenges in Chapter 13

Marcy J. FordTrott & Trott, P.C.Farmington Hills, Michigan

I am occasionally asked by debtor counsel and/or trustees why loss mitigation is not an option in bankruptcy, and why mortgage lenders, investors and insurers are not more actively engaging in loss mitigation. This question is somewhat puzzling as chapter 13 plans are often home retention plans; therefore lenders are and have been engaged in home retention in chapter 13 cases since the advent of chapter 13. However, because chapter 13 might not always be a viable option . . .

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