Mortgage repayment under Chap 13

[Peasey]

How does it work? We are filing Chap 13 for the Mortgage protection only because our other creditors were willing to work something out with us (the mortgage co could/would not help). I have read through these awesome forums and threads, but can't seem to find an answer that fits. I assume that we will begin repaying our mortgage the month after we file and the new payment will be (current payment) + (missed payments/60 months). I know Atty fees are added, but is there anything else that we can expect?

Thanks for your help!
Brian

[forgotten]

You will have to include all your debts in your Chapter 13 plan, no way around that one. You can't use it just for mortgage protection (but that will be a part of it).

You will pay all of your disposible income in to your plan, this will pay your mortgage arrears and the rest will go toward your unsecured creditors. At the end of your plan any remaining balance on any unsecured debt will be discharged.

[Peasey]

You will have to include all your debts in your Chapter 13 plan, no way around that one. You can't use it just for mortgage protection (but that will be a part of it).

You will pay all of your disposible income in to your plan, this will pay your mortgage arrears and the rest will go toward your unsecured creditors. At the end of your plan any remaining balance on any unsecured debt will be discharged.

Hmm...The atty said that we had to show our debts and creditors in our original statement, but we would not be requesting they be repaid through the trustee. They are already paid through an auto-debit we set up through the bank.

We'll see. It'll be a few days before they can go through and process the paperwork.

[NoTomatoCan]

Peasey - What type of debts are you trying to exclude from the BK? Are these secured or unsecured debts? What type of balances are due on them?

[Peasey]

Peasey - What type of debts are you trying to exclude from the BK? Are these secured or unsecured debts? What type of balances are due on them?

2 car loans w/~$25000 total
4 credit cards w/~$20000 total

The thing is that we have a little too much extra $ every month to qualify for Chap 13, but we don't make enough to catch up on the mortgage in a forseeable amount of time. The debts will all be paid in full in <3 yrs at our current payments. Thanks to an untruthful mortgage underwriter, we ended up in a bad situation in an attempt to re-fi our house last year. Hefty auto repairs, personal and pet-related expenses and a handful of other lovely items put us further behind and at each other's throats.

I really don't want to include the other debts becuase they aren't the issue; the house is and we really don't want to lose it.

[Peasey]

Dangit! Ya'll got me questioning what I've heard now. Just left a message with atty to get all the info and I'll report back what I hear.

[lrprn]

Peasey, I think your lawyer was trying to help you understand the difference between (1) you paying your current mortgage payments directly yourself with your trustee paying the arrears or (2) the trustee paying both your mortgage arrears AND your current mortgage directly to your lender.

Here in the forums we call this paying "inside" the plan (the trustee makes some or all of your current asset payments directly to your secured lenders) vs. "outside" the plan (you make some or all of your current asset payments directly to your secured lenders).

All of your debts will be included when you file, no exceptions. From your first post in the thread, I didn't get the idea you planned to leave debts out when you filed, just how the debts would be paid after you filed.

And you don't have to worry about how the mortgage arrears will be paid - those definitely will be paid by your trustee directly to your mortgage company. The only thing in question is who is going to be making your current mortgage payments through the years your plan will last - you or your trustee.

Most lawyers recommend that you make your own current mortgage payments yourself if your local court allows it (most do). The reason you don't want your trustee to make your current mortgage payments throughout your plan is that your trustee will get paid whatever his administrative fee is for making your current mortgage payments.

For example, if your monthly mortgage payment is $1000 and your trustee's monthly admin fee is 10%, then you'll be paying your trustee $100/month for the duration of your plan to make your mortgage payments for you. Not such a good deal

Let us know when you talk with your lawyer if my guess about this was right.

[Peasey]

Okay, finally got to talk to the atty. I misunderstood him at our first meeting. I thought he told us that we didn't qualify for Chap 13 when he actually said that we're more likely to pay 100% of our debts back b/c we have more disposable income than the min. That's what we're doing already so our monetary situation can only get better. We can (and prob will) leave the secured debt out of the filing, but ALL unsecured debt and the mortgage is included no matter what.

We're going back on Tuesday to go over everything and give him the green light. We just want to keep our house...and sanity intact.

BTW - lrprn, you are correct about the payments through the trustee. We will be opting to make as many payments directly to creditors as we can.

[klandsb]

I am in Western PA and "ALL" secured pmts "MUST" be made by the trustee.... My first thought was I dont want that but now that I am into my plan I like it alot better that way.... I dont have to worry about making any pmts to anyone and the 13 pmts are taken directly out of my paycheck (another requirement here) .. Also, my trustee fee is 3% which is on the low end of the scale...
Every trustee is different so its just what your trustees rules are...

[forgotten]

My first thought was I dont want that but now that I am into my plan I like it alot better that way.... I dont have to worry about making any pmts to anyone and the 13 pmts are taken directly out of my paycheck (another requirement here)

I like paying everything secured outside the plan and the trustee directly. It feels more like you are still in financial control and the trustee payment is just paying all your credit cards consolidated in to one monthly payment.

Yes... this is far from reality, but it just makes me feel more normal.

[Peasey]

I like paying everything secured outside the plan and the trustee directly. It feels more like you are still in financial control and the trustee payment is just paying all your credit cards consolidated in to one monthly payment.

Yes... this is far from reality, but it just makes me feel more normal.

I like that option too.

[klandsb]

Yes, if I had that option that is what I would have chosen ... But it is what it is... The thing that has me concerned is I have paid over $4000 into my plan and nothing has been paid out yet ??? I dont want to end up at the end of my plan behind on my mortgage ,helco or car pmts...

[lrprn]

Yes, if I had that option that is what I would have chosen ... But it is what it is... The thing that has me concerned is I have paid over $4000 into my plan and nothing has been paid out yet ??? I dont want to end up at the end of my plan behind on my mortgage ,helco or car pmts...

You won't be behind on your any of your secured payments, klandsb - no worries. Court-ordered payments made by your trustee are treated differently than when you made the payments.

Your trustee makes disbursements to your secureds when he or she is ready to make them. Often in Ch 13, your trustee won't start disbursements until after your plan is confirmed.

Although it's unnerving, it's also not unusual for the secured creditor payments sent by your trustee to go out one month and then not go out the next periodically throughout the life of your plan. The creditors just have to wait until the trustee sends them their money.

The trustee represents your creditors during your 13, so creditors are quite reluctant to rile the trustee by complaining about slow disbursements.

[klandsb]

Thanks Irprn... I wasnt sure when the pmts would start going out. My peace of mind is knowing I am paying what I have to and its up to the trustee to pay by bills for me..