Can I Apply for Loan Modifcation After Declaring Bankruptcy?

Loan modification is a blanket term used to describe any change in an existing loan contract such as refinancing, settlement or cash out options. Loan modification is typically a step taken before a borrower enters bankruptcy. It is possible to modify a loan after bankruptcy, but it depends on which loans you are looking to modify.

  • If a debt is declared in your bankruptcy filing, you cannot independently modify that debt. The courts will handle the settlement of this debt according to the debt's priority.
  • If you have sought an additional loan after bankruptcy, you can modify this loan as long as it was never mentioned in your bankruptcy settlement.

Loan modification is never a good thing for your personal credit. You will already be facing high interest rates in the future if you have a bankruptcy or foreclosure on your record, and you need to be a model borrower in order to recover from this bad credit history. While it is possible to modify a loan after bankruptcy, it is not advisable because it will further harm your credit.