Q: I am in the middle of a modification. Can I do a Bky?

A: Modification is not a bar to Bankruptcy. However, if you plan on retaining the property, I would suggest you wait until the trial period is completed, or you lender will scrap the modification.

A: If you are filing in the Fort Myers division of Florida, you should wait until your modification is complete before filing a chapter 13 or else you will have to pay your mortgage payment and mortgage arrears through the chapter 13 plan. Of course, if the foreclosure is imminent, you might not have a choice but to file now. Modification won't prevent you from filing bankruptcy.

A: Yes, but I would recommend waiting in most circumstances. The reason I would wait in a chapter 13 is because the trustee's office charges you a fee of approximately 10 per cent of your monthly payment while in the chapter 13. In the Middle District of Florida Fort Myers division(where I practice), the trustee's office requires that you make your monthly mortgage payment through the chapter 13 plan unless you are current on your mortgage. I am assuming if you are in the middle of a modification, you are probably behind on the mortgage.

Therefore, let's say your payments are $1,000 per month. If you are behind on the payments and want to keep your home, you will end up paying $1,000 mortgage + $100 trustee fee every month while you are in the chapter 13. If you wait to file after your modification is approved, you can pay the $1,000 directly to the bank without paying the hefty trustee's fee.