Attorney's Fees/House Payment Question

[lulabelle]

We met with attorney #2 today and he advised two things that I'm curious about:

1. He said that his fees could be paid in the Chapter 13? Is that normally how it works?

2. He advised us to file in December and then NOT make our December mortgage payment, but rather roll the Dec. payment into the Chapter 13. He said to "trust him" that he has people do it all the time - I've never missed a house payment and the thought of it is freaking me out! Is that legitimate advice?

Oh, one more thing, he wants the vehicle payment to be paid within the 13 plan instead of outside of it. Is that what is normally done?

Thanks for any advice!

[dyrstr8s]

We paid the attorney's retainer and the expenses to file the bk in advance and then the rest of the attorney's fees were included in the bk. I think that's pretty standard.
I've never heard of intentionally missing a mortgage payment, if you can keep it current, why would you? Maybe he's thinking you need that money to pay him and just include the mortgage arrears in the bk?
Including the car payment in the plan just puts more money in the trustee's pocket. Unless, I suppose, you're cramming down.

[isabella]

I paid the fees upfront to file the BK, and rest the attorney gets out of the plan itself. I cannot help you with the house, but I was advised to stop making my car payment and I was current, it is included in my plan and it is "crammed down" Hope this helps.

[lrprn]

1. He said that his fees could be paid in the Chapter 13? Is that normally how it works?

Yes, it's typical to give your attorney a partial payment before filing and then roll the remainder into the Ch 13 plan.

2. He advised us to file in December and then NOT make our December mortgage payment, but rather roll the Dec. payment into the Chapter 13. He said to "trust him" that he has people do it all the time - I've never missed a house payment and the thought of it is freaking me out! Is that legitimate advice?

Can you do it? Yes. However, I'm curious *why* he wants you to do it. Is it to free up cash to pay him his partial retainer fee or something else you need to have the cash for?

Oh, one more thing, he wants the vehicle payment to be paid within the 13 plan instead of outside of it. Is that what is normally done?

In some cases, it helps to put the car payments inside the 13 plan to be made by your trustee. This stretches the car payments out for the length of your plan and can help reduce the monthly Ch 13 payment somewhat.

However, the bad news is that you'll be paying your trustee his set monthly administrative fee % (between 2-10% depending on what's set in your local bk district or state) on top of the payments as well, so you need to clearly understand why this lawyer thinks doing this is beneficial for you to do in your case.

[appleae]

When to resume normal mortgage payments

Similar question. If we're rolling our mortgage arrears into the Plan, is it true that we resume making our normal mortgage payments the same month the first trustee payment is due? For example, if we sign the petition 11/22, the the trustee payment will be due 12/21. since our mortgage payment is due the first of the month, then we would need to make the next payment on 12/1? Also, if there was normally a 10-day grace period (12/11), will lenders typically still allow it, or do they expect the mortgage payment by the due date (12/1) since we're now in a Ch13?

[HHM]

Similar question. If we're rolling our mortgage arrears into the Plan, is it true that we resume making our normal mortgage payments the same month the first trustee payment is due? For example, if we sign the petition 11/22, the the trustee payment will be due 12/21. since our mortgage payment is due the first of the month, then we would need to make the next payment on 12/1? Also, if there was normally a 10-day grace period (12/11), will lenders typically still allow it, or do they expect the mortgage payment by the due date (12/1) since we're now in a Ch13?

Correct, as soon as your case is filed, you need to start making your normal mortgage payment at the next due date.

[Houseofcards]

We are in a similar situation and that brings a related question.

We finally signed our petition on Nov. 9.

Our attorney is still finallizing our paper work - we have not been filed as of today.

Our house payment is being paid in the plan - this is the only secured debt that will survive as we are stripping our HELOC and we have no other secured loans.

The day we signed the papers with the paralegal he said NOT to make the Dec 1 payment - send in the plan payment instead at the 30 day mark from the filing date.

I have emailed our attorney this question and have not gotten a response as of yet.

We have a 15 day grace period on our loan - but if the chapter 13 payment is not due until - say - the 20th or so of December we would miss the December payment ?

Just wondering if anyone has feedback on THIS scenario

thanks

[Billssuck]

Hmmm...my attorney said to make sure our mortgage payments were made on time no matter what just before filing and throughout the plan. Our mortgage is paid outside of the plan.

We paid a retainer and partial fees before filing and then the rest of the fees are included in the ch 13.

[lrprn]

Our house payment is being paid in the plan - this is the only secured debt that will survive as we are stripping our HELOC and we have no other secured loans.

I want to be sure I understand your situation clearly. What I'm reading is that your Ch 13 plan calls for your trustee to make payments to your lender to make up your mortgage arrears *AND* your trustee is also making your regular house payments directly to your lender for the life of your plan. Is this correct?

[Houseofcards]

We have no arrears for our mortgage - we are current. Apparently here in Las Vegas you pay your house payment in the plan.

I am just worried about whether or not we need to make a house payment on December 1st - because the trustee will be making our house payments for the duration of our plan.

It has been almost 2 weeks since we signed the papers - is this an unusually long time to get filed ?

[klandsb]

I think all trustee's are different from what I am gathering. I am in Western PA.
All secured pmts "must" be made inside the plan . Uggghhhhhhh
In the long run its three less pmts I have to make everyt mth but the trustee is making money on my money which ticks me off... Luckily my trustee fees are 3% but over 5 yrs its gonna add up.
I have no choice in the matter.. In fact I file 10-21-09 . Got paid at midnight and my wages are already attached... Don't waste any time do they !!!!!!!!!

[Houseofcards]

Heard from our attorney

Here is the question i asked of our attorney:

"Our case is not filed yet. I need to know if we need to make the Dec. 1 house payment. Our 1st morgage is being paid in the plan. However our first plan payment will now be scheduled to be made past the 15 day grace period for our loan. Do I have an issue here ?"

Here is his reply:


"No, you just need to make the Trustee payment the month after the case is filed."

So - that answers that

We are still very anxious though - today is 2 weeks since we signed the petition. I will update the time passed after we ARE filed.