Homeowners in Kentucky may be able to refinance or modify their home loans in the event that they can no longer afford their mortgage payments. A loan modification may result in a lower interest rate, a longer repayment period or other changes that make it easier to stay current on the debt obligation. In some cases, lenders may be willing to either defer loan payments or forgive them entirely.

If a borrower is already behind on his or her mortgage, any amount that is in arrears may be added to the end of the existing loan. Modifying a mortgage may be ideal for lenders because they don’t have to spend a significant amount of time and money foreclosing on a property. For borrowers, modifying a mortgage may be easier than refinancing because they won’t need to replace their current loan with a new one. In most cases, refinancing may only be an option for those who have good credit and who have positive equity in their homes.

Individuals may be able to secure a favorable modification by filing for bankruptcy. Doing so will result in an automatic stay against a foreclosure, which means a borrower has more leverage when negotiating with a bank or other financial institution. Typically, a modification will need to be approved by a judge if an agreement is made during a Chapter 13 proceeding.

Those who are struggling to pay their mortgage may want to hire an attorney to provide insight into available bankruptcy and debt relief options. Homeowners who choose to file for bankruptcy may be allowed to remain in their homes until their cases have been resolved. Anyone who files for bankruptcy protection may be able to eliminate their unsecured debts over a period of several months or years.