Filed chapter 13 to save home, however it was still foreclosed

[Nicole]

Hi all:

Im still learning about the whole BK process and all. I filed Chpt 13, hours before my Foreclosure Sale April 6th. From my understanding everything stopped. I received a letter from my mortgage's attorney and I sent them the BK documents. Last week I received a summons from GA Housing Authority aka HUD. I sent them over the BK paperwork. According to my credit report I no longer own my home, because the Chpt 13 turned into a 7.

Our meeting of creditors is not until Tuesday (5/25/10). My question is will HUD take my home from me at the meeting of creditors? How will that work if the foreclosure went through and I no longer own the home?

Thanks for your help.....

[SMinGA]

Do you have an attorney? When was your bankruptcy case actually filed?

[Nicole]

No I dont have an attorney....I filed April 6, 2010 @ 8am.

[SMinGA]

Filing ch. 13 when your home is on the line - without an attorney - is a risky move I'm afraid. It should have stopped the foreclosure, assuming the proper parties were notified. If not notified til later (the court clerk sends out notices but I imagine that can take a few days) then I'm not sure if it would void any foreclosure sale?

Did you file a full petition and plan - or just the emergency petition? You said something about turning into a 7... Did you file to convert your plan?

Some basic questions: For a 13, you need to be able to make ongoing mortgage payments on time, and pay disposable income into the plan to cure the arrears. For a 7, to keep your home you need to be current on the mortgage at time of filing and remain current. After you have filed and have the benefit of the automatic stay, the lender would need to file to lift the stay in order to proceed with foreclosure.

Is there any reason why you would not have the automatic stay? Had you filed ch. 13 prior to April 6th, 2010 - as in the past 6-12 months and then it was dismissed?

[Nicole]

Hi thanks for your response...

I did not notify my mortgage company, I didnt know until a few weeks ago that I was suppose to go down to the court steps and hand them the BK document. I actually ended up faxing them the paperwork after they mailed me a summons. And now HUD has taken over, because they sent me a summons as well. As far as the Chpt 7, it as not my intentions to file a chapter 7. On my credit report it shows a 13 then it says it was changed to a 7. I have never filed for BK before.

I was told by an individual that I would have to pay money or give up the home at the meeting of creditors to whom ever owns my home. I was told Im at their mercy...

[SMinGA]

Don't go by what is on your credit report - credit reports often contain errors.

Check your case on Pacer, or you might need to go to the BK court and pull your records and see what is happening.

Failing to notify the mortgage company & stop the foreclosure makes it a bit of a mess. The automatic stay was in place from the time you filed, but at this point you really need an attorney to help you thru I think. I know that when someone files ch. 13 after a recent vehicle repo they can usually get the car back. I'm guessing that any foreclosure sale (the bank probably bought it back anyhow) might be void by the bankruptcy, but you really need legal help to sort things out.

I've never heard of anyone paying money or handing over their house keys at a 341. The purpose of the meeting is to allow creditors to object if they believe fraud is involved, and to have you swear before the trustee that you have been complete & honest in your petition. Also for the trustee to ask questions about your budget & plan proposal I think.

As to going forward: what did you propose as a plan payment? Was it enough to cover the mortgage arrears? Did you make your May mortgage payment? (Its the only one due so far after you filed.) How much total do you owe on your home, and about how much is the home worth? In other words - is it really worth saving?

Your best bet, at the 341, might be to ask the trustee to allow you to voluntarily dismiss 'without prejudice' so that you can find an attorney, straighten everything out, and refile.

[Nicole]

Wow you gave me a lot to think about. I did put a plan together with me making below the Median for GA, I have to be on the 3yr payment plan. I paid 159900 for my home and its worth 136000 and I owe $145000. I did not make May payments because the mortgage company no longer has my house, so Im not sure who to send it to.

[justbroke]

Simply converting your case does not remove your home ownership. Your credit report does not in any way convey legal ownership.

The only way for the bank to acquire ownership is to sue you for ownership through a foreclosure. If your Chapter 7 is still not discharged, there is no way the bank did this (legally).

Nicole, you really need an attorney for this. There are things going on that you are not prepared for and you may lose your home through the bankruptcy. That may not be a bad thing in the long run, but I have no idea of your total financial picture.

Since you filed a Chapter 13, did you file a Plan of Reorganization as well?

[Nicole]

Hi:

No...I filed the Chapter 13 Plan.

[justbroke]

No...I filed the Chapter 13 Plan.

How do you treat the home in the Chapter 13 plan? Surrender or keep making payments? Did it have a second mortgage? Can you strip the second mortgage? Did you serve the Chapter 13 plan on all creditors?

I guess you're about to find out alot about whether your Chapter 13 Plan of Reorganization is confirmable, once you attend your 341 Meeting.

[Nicole]

I added the home in the chapter 13 plan to keep making payments. There is no second mortgage. I added all creditors including student loans.

[justbroke]

I added the home in the chapter 13 plan to keep making payments. There is no second mortgage. I added all creditors including student loans.

Did you use a model plan (template) or just made up a plan? You don't name "all" creditors in the Chapter 13 plan. You deal with administrative, priority, secured and then the unsecured pool (which is not dealt with on an individual level). Did you crate a new class for your student loans?

I suppose you'll find out any defects in your Chapter 13 plan when your attend the 341 Meeting. If you actually created a confirmable plan, my congratulations because most pro se debtors can never create such a plan or understand how a plan is organized. I'm going to assume that you're in good shape.

[Nicole]

I actually studied several plan formats and had a paralegal review the plan. They said it looked good! Whats keeping me up at nigallht is getting put out! I was also wondering if HUD will allow me to rent it month to month at least until i find something....i dont know

[justbroke]

You can't be put out if your plan provides for the payments! Simple as that. Once your plan is confirmed, and so long as you make your plan payments, you are good to stay.