Late Payment on Mortgage ....

[InchWorm]

Hello Everyone, I have done a search and nothing appeared regarding specifically my question.

Here is the stats:
Filed in Summer a chapter 13
Confirmed in September.
We did have three months of arrears that were included in our 13
Our mortgage payment is due 1st of every month, late fee after the 15th.
Last month, we had to pay on the 16th. We did.


This month, it was due on 1st of course, late after 15th. We were going to pay this Thursday (with a late fee), but all the sudden our main paycheck is much smaller than we ever anticipated and it does not appear at this time we will have enough to cover the mortgage payment, which will then put us 30 days "behind" or "overdue". There were no major issues (i.e. death, loss of job, etc) that have happened to put us in this position, just several unexpected bills this month, and smaller than anticipated earnings.

What will happen or what should we due since we are or will be 30 days late? Obviously I know this is bad, but I am unsure if this means doom for us. Any thoughts or comments are appreciated. Thank you,

InchWorm
(thats about how tall I feel right now)

[catleg]

I have somewhere in my files a letter Wells Fargo wrote to my attorney stating that the late fee cutoff day was changed after bankruptcy to be based on the petition date (of the BK filing). I would not pay any late charges but I would try to make the mortgage payment, if you can. I got about 55 days late and WFC filed a relief from stay, however, I got caught up, late fees waived, and the attorney costs for the relief from stay motion are being paid from the chapter 13 plan, so essentially free to me, as far as I can tell.

[spidge]

Anyone have more experiences to share on this subject?

ARGH!!!!!

[justbroke]

There is no telling what the lender would do but here are the possibilities. One possibility, is that they do nothing. They may accept your payment and life goes on. They will probably add late fees on to your account, and these could become problematic when you complete your Plan since the late fees may have accrued interest, etc. As catleg wrote, the late fees must usually be court approved for them to count. However, this is not a case where the Trustee made a payment late... it's because you pay outside the plan.

The other possibility is that they start rejecting your payments until you come current. They may also file a Motion for Relief from the Automatic Stay (RFS). Another poster on BKForum was just complaining about this exact problem, although I believe they were saying that they were paying on time, but the lender was just putting the amount in suspense. It is typical during these Chapter 13s that a lot of the money goes into suspense, but that shouldn't affect the status of the account.

Unfortunately, paying a mortgage outside a Chapter 13 Plan can become a serious problem for a debtor. While I understand the need to do so and the incredible savings from not paying 10% to the Trustee to handle the checks (I was paying the Trustee over $700/month at my Plan's peak), at least it insures the payments are made and protects from the threat of an RFS.

I really hope that you can get back on track. Using the grace period to pay your mortgage is always difficult when you have unexpected expenses or loss of income. It's something you don't want to use -- the grace period -- while in an active Chapter 13.

As catleg wrote, just talk to your attorney. It doesn't sound like you're "really" past 30 days yet but you really need to put your efforts towards getting current.

[spidge]

Thanks for the response JB. I am not 30 days late but have made a couple mortgage payments after the 15th where a late fee would apply. I paid the last one with my payments, but not this months. I will take care of that as it sounds like it could become an issue in the future. I was tempted to call the mortgage company and ask if I could do 1/2 now and a payment and a half next month, but I didn't.
I have read a post here and there about mortgage companies seeking the RFS near the end of a BK13 and it brought up my stress level a bit. Summer becomes challenging as my spouse looses her paycheck for a couple months. Fortunately August is a three paycheck month so we should get back up to paying on the 1st of September.

My fingers are crossed.