B. Grant McNutt

What Is Mortgage Forbearance?

A forbearance is a workout option available to homeowners having a financial hardship. As the coronavirus pandemic was hitting its peak late fall and early winter of 2020, thereby straining Americans’ finances, 3.4 million homeowners were in forbearance. The typical terms of a mortgage forbearance are payments can be “skipped” for 90, 180, up to 360 days for those that are affected by COVID-19.

Normally, forbearance can drag down a homeowner’s credit score, though less so than missed payments. But the CARES Act directs mortgage lenders to report your account as current to the credit bureaus, as long as you were not behind on payments when you requested the forbearance. However, eventually, forbearance agreements end, and homeowners might be stuck with expensive mortgage payments just as they are getting back on their feet. 

What You Need To Know

  • The homeowner will need to make up the missed payments.
  • Missed payments may be deferred to the end of their mortgage term, or
  • Rolled into the mortgage balance, or
  • Be called due all at once.

This Is What Can Go Wrong

At the end of your forbearance term, all skipped payments are due at once. Now, this is not realistic for most families, especially if you have not made a payment in 6,9, or 12 months! Most mortgage servicers will have other options for reinstating your loan. But what if you are unable to meet your mortgage servicer’s conditions for reinstating, modifying, or refinancing your loan and losing your home to a foreclosure is out of the question? 

How Can Bankruptcy Help?

One of the most powerful tools that we have in bankruptcy is that we can stop foreclosure. We can stop the eviction process, we stop lawsuits, and we can stop wage garnishments. Essentially that amounts to the able to stop all legal proceedings against the debtor, as to the collection of debt, the moment we file your bankruptcy case. Under Chapter 13, the moment we file the bankruptcy, that mortgage is essentially deemed current. The unpaid balance of the forbearance is then made a part of your repayment plan.

We Are Here To Help

If you are struggling financially and haven’t arrived at a solution, a consultation with an experienced bankruptcy lawyer is your best next step. At Bond and Botes, P.C., we help people resolve debt in Alabama, Tennessee, and Mississippi.

Start Strong with an Experienced Bankruptcy Attorney

An experienced local bankruptcy attorney can offer many advantages, from providing the information you need to choose the right path forward to ensuring that technical requirements are fulfilled, deadlines are met, and explaining your options if you run into trouble.

The attorneys at Bond & Botes have been helping people get out of debt for decades. We know how important accurate information is, so we offer free consultations either face to face or from the comfort and safety of your own home or office. We can meet by phone and/or video. Let us solve your financial problems. There is no obligation, and that means no downside to gathering the information you need to make good decisions about how to break the cycle of debt stress and move forward. We can answer all your questions regarding Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, stopping a foreclosure or wage garnishment, avoiding liens, stopping lawsuits, discharging medical debt, personal loans, payday loans, credit card debt, etc. We can alleviate your stress! We want to help and we can help you!


Bond, Botes, Sykstus, Tanner & McNutt, P.C.

Web: www.bondnbotes.com

Facebook: facebook.com/Bond-Botes-Sykstus-Tanner-McNutt-PC-203986783117475/

102 South Court St, Suite 314, Florence, AL 35630

Phone: 256-760-1010 • Fax: 256-760-1023

Office Hours: Monday – Friday • 8am to 5pm

No representation is made that the quality of legal services to be performed is greater than the quality of legal services to be performed by other lawyers.