Question about being late on first mortgage in the plan

[cspa522]

We are filing 11/22 or 11/24. Our first payment to the trustee will be due around 12/22 or 12/24. Our first mortgage is outside the plan as we are keeping the house.

After paying the sales tax on our new car, the attorney's fees, and for a home appraisal, December is going to be TIGHT. I've been paying our first mortgage late (at the end of the month instead of the 15th) because I get paid once a month, on the last day, and that's when there's money.

What will happen if we file on 11/24, make our first payment to the trustee on 12/24 and I don't make our mortgage payment until 12/31? Will we be dismissed? We're already behind on the mortgage. Our plan shouldn't be confirmed yet at that point.

Since it's outside the plan, does it matter?

By January we'll be caught up again, completely, and able to pay on time.

[Pandora]

I've been paying our first mortgage late (at the end of the month instead of the 15th) because I get paid once a month, on the last day, and that's when there's money........We're already behind on the mortgage.

the bigger concern I would have is that you're entering into a Ch. 13 plan that maybe you cannot afford. What happens when the next surprise expense comes rolling around and you're late paying your mortgage again? If you've been paying your mortgage late every month (as indicated above) then you're not budgeting accordingly. Again, as was stated yesterday regarding your trustee payment date - you will not be able to pay the trustee late - it must be paid at least 7-10 days prior to the due date to make it there on time else you risk dismissal.

How can your house be outside of your plan if you're behind on it and have arrears? Again - from everything you've posted, it sounds like you're set up to fail your 13 before it even begins.

Something to think about.

ETA: After reading this post: http://www.bkforum.com/showthread.ph...cond-mortgages Your house will more than likely be included in your plan. Also worth mentioning is that your trustee will see that you've been late paying so just be aware that he/she may require your payments to be directly paid through your employer vs. you doing so. You wont have an option if your Trustee mandates it. This ensures that no payments to him/her are late.

[cspa522]

I've been paying our first mortgage late (at the end of the month instead of the 15th) because I get paid once a month, on the last day, and that's when there's money........We're already behind on the mortgage.

the bigger concern I would have is that you're entering into a Ch. 13 plan that maybe you cannot afford. What happens when the next surprise expense comes rolling around and you're late paying your mortgage again? If you've been paying your mortgage late every month (as indicated above) then you're not budgeting accordingly. Again, as was stated yesterday regarding your trustee payment date - you will not be able to pay the trustee late - it must be paid at least 7-10 days prior to the due date to make it there on time else you risk dismissal.

How can your house be outside of your plan if you're behind on it and have arrears? Again - from everything you've posted, it sounds like you're set up to fail your 13 before it even begins.

Something to think about.

Does anyone ever post all of the vital information in their first post? 'Cause I'm really bad about it. I should have started off by saying: I will be making a (late) mortgage payment on 11/30. In order to get back on track and paying on time, I will then be making a second payment on 12/15. So two mortgage payments in 2 weeks, totalling $2200. THAT's why it's going to strap me for about a week until my husband gets paid again.

The reason we're filing for bankruptcy is because we are struggling to pay credit cards, 2 mortgages, and a car payment. According to our attorney, our payment is looking to be about $550 a month. My attorney has been great about putting us at the maximum limits for groceries, etc. so we will have a little wiggle room in our budget. Had we not had to pay, within 2 weeks of each other, $3000 for the attorney, plus $300 for an appraisal, and then $1200 for sales tax on the vehicle she recommended we get before we file, we'd be in really good shape. However, the sales tax is just making things quite tight for us. It's not something that will continue by any means.

Getting paid once a month means we go a very long time in between pay checks! I have our budget/checkbook in Excel, and it goes out to July of 2011, with every single expense, including any savings, accounted for and we'll be doing just fine once December is over.

Because things were tight, I was paying our house payment at the end of the month instead of between the 1st-15th and allowing us to collect late fees on it. Not the smartest, but the only real option we had. Once the BK is set in motion we will (more than likely) get rid of our 2nd mortgage, and be in considerably better shape financially. However, the reason I will be a little strapped for a week or so is because I'll make a payment on 11/30, then another one on 12/15 (to get back to paying on time). Two payments in 2 weeks is going to be tough. That's why I was asking if I made the December payment late, for one final time, if that was going to hurt our BK filing. As confirmation usually takes longer than 30 days, I don't think we'll be confirmed by then. If I can make the December payment on the 31st instead of the 15th, we'll have another paycheck come in and not be strapped.

According to my attorney as long as I continue making payments on my house they will just put the amount owed into arrears and we will pay it back during the plan, but the house itself will remain outside the plan. Perhaps this is different in my district than in yours? I have no idea. I'm trusting her and going by what she says.

I have absolutely no plans to pay the trustee late, nor do I wish to pay the mortgage late. I want to be a good pay-er!! I also hope that what I've said makes any kind of sense.

THANKS!

[Pandora]

cspa

Okay, lets back up a sec In trying to figure out a few things I went back and read some of your posts, which leads me to a few questions.

Your lawyer has proposed a monthly payment amount of $550 for your CH. 13 plan, correct? So out of that $550 (since you are paying your lawyer upfront) if you're in a 36 month plan that equates to $19800 payback; 60 month would be $33K roughly (assuming trustee fees are included in the payment).

- you have 2 car payments (new purchase car and your husbands) that you said must be put into your plan as both are secured and you're keeping them. What are the payments for both vehicles?

- your mortgage arrears are how much?

- what else is in your plan to be paid back?


The reason I ask is because you stated something in a few of your posts that alarmed me a little. 1. Your car purchase was $14K with a high interest rate, and you stated your attorney was going to get the interest rate down to Till Rate; $14K @7.5% x 60 months =$280 a month.

and concern #2 is this comment you made in a previous post (which set off the alarm):

I plan to continue to pay on the cars and mortgage before we file. I was more curious if after we file I can stop paying on them. And I'm only interested in that because of budgeting. There's a big difference in what's left over at the end of the month without those 2 car payments in there. I believe I do stop paying on them, because the attorney won't want it to appear that I'm showing preferencial treatment to a creditor over the others, but I'm not sure.

You do realize that you must continue to pay for both vehicles if you want to keep them dont you?

So if your proposed plan is $550 a month and you deduct your new car payment ..... what does that leave you with to pay the other car payment, trustee fees, arrears, and unsecured creditors? If you cannot strip your 2nd mortgage...you must include that as well in your monthly budget.

Maybe I'm not understanding something. ??

[cspa522]

cspa

Okay, lets back up a sec In trying to figure out a few things I went back and read some of your posts, which leads me to a few questions.

Your lawyer has proposed a monthly payment amount of $550 for your CH. 13 plan, correct? So out of that $550 (since you are paying your lawyer upfront) if you're in a 36 month plan that equates to $19800 payback; 60 month would be $33K roughly (assuming trustee fees are included in the payment).

- you have 2 car payments (new purchase car and your husbands) that you said must be put into your plan as both are secured and you're keeping them. What are the payments for both vehicles?

- your mortgage arrears are how much?

- what else is in your plan to be paid back?


The reason I ask is because you stated something in a few of your posts that alarmed me a little. 1. Your car purchase was $14K with a high interest rate, and you stated your attorney was going to get the interest rate down to Till Rate; $14K @7.5% x 60 months =$280 a month.

and concern #2 is this comment you made in a previous post (which set off the alarm):

I plan to continue to pay on the cars and mortgage before we file. I was more curious if after we file I can stop paying on them. And I'm only interested in that because of budgeting. There's a big difference in what's left over at the end of the month without those 2 car payments in there. I believe I do stop paying on them, because the attorney won't want it to appear that I'm showing preferencial treatment to a creditor over the others, but I'm not sure.

You do realize that you must continue to pay for both vehicles if you want to keep them dont you?

So if your proposed plan is $550 a month and you deduct your new car payment ..... what does that leave you with to pay the other car payment, trustee fees, arrears, and unsecured creditors? If you cannot strip your 2nd mortgage...you must include that as well in your monthly budget.

Maybe I'm not understanding something. ??

Okay, here we go!

1. Proposed plan was $550 a month for 60 months.

2. The $550 a month payment was before we bought the new car, and it does not include our 2nd mortgage.

3. I am currently estimating $2000 a month for a trustee payment, banking on that being high, but I wanted to estimate higher rather than lower. The $2000 estimation includes both cars, credit cards, and the 2nd mortgage. The first mortgage continues to be paid outside of the plan.

4. I am still paying on both vehicles, and have never stopped. My attorney did, however, tell me to stop paying on them AFTER we file, as they will be included in the plan and will be part of the $550/$2000 (whatever it ends up being!) trustee payment. Is that wrong? The payment for husband's car is $468/month (and has $9000 on it) and the new car is $409/month.

5. Our monthly income is about $6100. So $6100-$2000-$1140 (mortgage) = $2960 left for the month

[Pandora]

Okay, here we go!

1. Proposed plan was $550 a month for 60 months.

2. The $550 a month payment was before we bought the new car, and it does not include our 2nd mortgage.

3. I am currently estimating $2000 a month for a trustee payment, banking on that being high, but I wanted to estimate higher rather than lower. The $2000 estimation includes both cars, credit cards, and the 2nd mortgage. The first mortgage continues to be paid outside of the plan.

4. I am still paying on both vehicles, and have never stopped. My attorney did, however, tell me to stop paying on them AFTER we file, as they will be included in the plan and will be part of the $550/$2000 (whatever it ends up being!) trustee payment. Is that wrong? The payment for husband's car is $468/month (and has $9000 on it) and the new car is $409/month.

5. Our monthly income is about $6100. So $6100-$2000-$1140 (mortgage) = $2960 left for the month

NOW it makes more sense LOL! $6100 a month (net or gross?) and if you're correct and you get a $2K Ch. 13 payment - holy crap -you're paying back $120K! That seems very excessive....

[cspa522]

NOW it makes more sense LOL! $6100 a month (net or gross?) and if you're correct and you get a $2K Ch. 13 payment - holy crap -you're paying back $120K!

I knew we could get there! That's $6100 net. We owe a TON in credit card debt. And that $2000 a month also includes my (at best guess of course!) 2nd mortgage, which is for $50k. We are in deep, which is why we are where we are! So basically, after this is over and if we can strip the 2nd, we are only paying living expenses, 1st mortgage, and utilities. HU-FREAKIN-ZAH. But, we shall see.

I think, after all this, we will just move back our filing date by 2 weeks. That will get us each other paycheck and make things a lot less tight so we can pay the mortgage on time, etc. Might as well start off on the right foot.

I'm sincerely hoping the payment of $2000 is high, but you know...if it's not, we'll be okay. We did this to ourselves, we'll get out of it, even if it hurts. ;) Thanks for the help, and sorry I was such a pain in the patoot.

[Pandora]

ETA: Just saw your post above - you're not being a pain - and I sincerely hope you dont have a $2K payment, that would suck! (had to remove my post - saw how you were calculating after I posted)

[MOMof3]

We pay $3040 per month--but that includes our mortgage payment. Without the mortgage included our payment would be around $800 per month. That is why the size of someone's payment doesn't really matter, a lot of us have big on-going payments that the trustee is making for us.

[cspa522]

We pay $3040 per month--but that includes our mortgage payment. Without the mortgage included our payment would be around $800 per month. That is why the size of someone's payment doesn't really matter, a lot of us have big on-going payments that the trustee is making for us.

Mom - yup. If our 1st was included, it would be much higher. Which is why, with the 2nd in there, I estimate a much higher payment, and a lower one without it.

[catleg]

You're better off being late going into the plan, then the arrears can be paid inside the plan.

In your situation I'd think the best time to file is the day before payday, that way you show minimal bank balance and you get money right away after you file.

Most people file at the end of the month anyway, usually they have calculated their B22C in the current month and slipping another month often requires a recalculation.

Are you below median in your district?

Also since this is the end of the year, make sure you don't owe back taxes for being underwithheld this year. You might want to use the mortgage payment to pay off taxes instead if you slip it a month.