(713) 789-3300
Bankruptcy Info Center MENU

Early Maturing Loans

1. Anti-Modification Rule Relating to Loans on a Homeowner’s Principal Residence

2. Exceptions to the Anti-Modification Rule – Generally

3. Curing Past Due Payments While Maintaining Future Mortgage Payments (Cure & Maintain)

4. Lien Stripping a Second Mortgage or Other Junior Lien Asserted Against a Residence

5. Early Maturing Loans (Loans that Mature within 5 Years).

A third exception to the anti modification rule is for early maturing loans – any loan that matures before the final payment comes due under the bankruptcy plan is not subject to the anti modification rule. A home mortgage loan matures on the date the last payment is due under the loan documents. If the loan calls for payments over 15 years, the loan matures in 15 years after the last loan payment is due. If the loan calls for payments over 3 years with a balloon payment of principal and interest at the end of 3 years, the loan matures when the balloon payment is due.

In Chapter 13 cases, the last payment on any plan must always be made within 5 years after the plan payments start. The Court has no discretion to extend the last payment beyond 5 years. Therefore, as a practical matter, the anti modification exception for early maturing loans applies to any loan that matures within 5 years of the date the bankruptcy case is filed.

For early maturing loans, all of the normal restrictions on loan modification are lifted. The Court has the power to approve a plan that:

(a) lowers the interest rate paid on the loan while the case is pending;

(b) lowers the monthly loan payments; or

(c) lengthens the loan payments for up to 60 months.

Full cram down is also permitted for all early maturing loans. For example, assume the following facts:

Example #4




Bankruptcy Filing Date – on this date also assume the following:

First Mortgage Payoff Balance is


Interest Rate Under Loan Documents is


Fair Market Value of Property is


Prime Interest Rate on Bankruptcy Filing Date is



Date the Last Payment is Due Under Loan Documents

In this situation, in the Houston bankruptcy courts, the Court can approve a plan which limits the monthly payments on the home loan to approx. $570 per month ($30,000 amortized at 5.25% over 5 years) rather than monthly payments of $3,227 ($100,000 amortized at 10% over 3 years) as required by the loan documents. Any remaining balance due under the loan will be discharged if all plan payments are completed.

As this example demonstrates, the ability to lower the interest rate and cram down the principal balance to the value of the property can result in a tremendous savings. It allows a homeowner to make comfortable payments to save a home from foreclosure rather than the massive payments that would otherwise be required under the contract documents.

If your home loan matures within the next five years and the property value is less than the balance due on the loan, call the Weber Law Firm for a free confidential consultation to discuss your options.

6. Mobile Homes

7. Loans Secured by Additional Collateral


Excellent Chapter 13 Attorney

I received excellent representation from a board certified bankruptcy attorney in thorny Chapter 13 Bankruptcy case.
- C McDonald
More Reviews

Made My Bankruptcy Simple

Like most folks, I was scared about the process of filing bankruptcy. Mr. Weber made what seemed to be an incredibly complex process simple to understand. His ability to walk me through every part of the filing, and his quick turn around in answering any questions I had, continued throughout the entire five years of my Chapter 13 plan. I HIGHLY RECOMMEND Mr. Weber if you ever get in the position of needing to file for bankruptcy.
- Matthew Berg
More Reviews

Strongly Recommend Mr. Weber

Mr. Weber helped me file for Ch. 13 bankruptcy. He was very nice to me and helped me through the entire process. I recommend him strongly.
- Lucia Valdez
More Reviews

Don’t Delay!

Find out why thousands trust us to help them through their bankruptcy. From following the best strategy in your particular case, to understanding how to use the system for best results, call Weber Law now for your free consultation.