Bankruptcy Courts to Issue Cramdowns

Bankruptcy Court judge will soon have the power to reduce mortgage loan balances of borrowers filing for bankruptcy.  Congress is expected to pass the bill and President Obama has pledged to sign it.  The bill also grants bankruptcy judges the power to cut mortgage interest rates and monthly payments.

Under Chapter 13 bankruptcy,  judges can reduce balances of credit cards and other loans. But the current law does not allow for balance reduction on your primary residence.

Related posts:

1. Citigroup Agrees To Foreclosure Prevention Plan

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