After putting a bankruptcy law into affect that wasn’t particularly beneficial to Middle America a couple of years ago, a change in Congress and in economic circumstance is prompting another look at how
bankruptcy is handled. Under current law, home mortgage loans are exempt from a judge’s ability to alter the terms. But a new bill in Congress could change that.

The new bill, if passed, is part of a package aimed at reducing instances of predatory lending, and at helping Americans avoid foreclosure. Bankruptcy judges would be able to order that an interest rate be changed from variable to fixed, and adjust payment terms so that it would be easier to meet them. The new law would even provide the terms in the case of mortgage loans to extend beyond the five year debt repayment requirement under Chapter 13 bankruptcy.