Negotiations with your loan servicer is not neuroscience, but you do need to work with a brain that has the authority to make a deal.  In most cases, the loan servicer sends someone with as much creativity and signing power as a toenail clipping.  Let us say you are dealing with a large law firm that is representing your mortgage loan servicer, the standard operating procedure goes something like this:

  1. You send them something and it takes ten days to get to the right person.  
  2. The person you talk to on the phone is not the person in charge of your file.  
  3. The person (who is not in charge of your file) tells you, “We cannot give you what you want, but we’ll take your information”  (after you have already provided said information eight hundred times in triplicate). 

That would not happen in Bankruptcy Court.

Bankruptcy is becoming a popular standard operating procedure for borrowers because it motivates more meaningful conversations with the loan servicer.

A Bankruptcy Mediation requires the representative to appear in person (not by telephone) and to have authority to make a deal.  Furthermore, there are monetary consequences for non-compliance with the rules, and there are audit trails for when you sent stuff and when you did not.

Bankruptcy is not for every borrower. 

Bankruptcy has long-term consequences you need to know and understand before you file.  However, sometimes Bankruptcy is the only way to have a meaningful conversation with your mortgage servicer.  Seek competent legal counsel to discuss all your personal and financial goals, and what legal choices are available to you.