1st mortgage payment durring a ch13.

[spidge]

I am a couple payments into my ch13 and was wondering if the 1st mortgage payment grace period is still in effect. That is its due before the 15th. My attorney actually wants us to send it by the 1st of every month by certified mail with a signature confirmation. That seems a little overboard but I do understand the reasoning. We are very close to the ability to do this before the 1st of every month but currently it requires us to send the payment next day and it gets a bit pricey. I am confident next month we will be ahead on it but this month I sure would like to avoid the extra cost.

Also our attorney wants it by certified check or money order as if it was a trustee payment, but could we simply pay the 1st mortgage through our banks bill pay?

I must be a search knucklehead as I could not find this topic there.

[RunningMan]

We are in the same district as you (California Central). There is only one trustee in our district, so I am sure we have the same one. Here are the instructions in the letter sent to us from the trustee:

"Post-Petition Mortgage Payments: If you are represented by an attorney, your attorney is authorized to forward the payment(s) to your lender(s). You may also mail the payments directly, but be sure to file and serve the Trustee with a copy of the Declaration Setting form Post-Petition and Preconfirmation Trust-Deed payments, available at the clerk's office or the Trustee's website."

If you don't send the payment to your attorney to send in for you, then you need to fill out the form and attach a copy of the cashier's check, money order, certified funds, or other proof of the payment. The form also asks that you attach a copy of the US Post Office Certificate(s) of Mailing, acknowledgement(s) signed by the Creditor's representative, or other documents that prove delivery of the payments.

As far as I know, we don't have to do that anymore after we are confirmed, but you can ask your attorney.

[spidge]

So once the plan is confirmed, which mine is, we can go back to the normal way of making payments through my banks bill pay program?

[RunningMan]

That is my understanding. The form is called Post-petition and Pre-confirmation. You might want to check with your attorney though. However, you may not be able to go back to your banks bill pay program. My mortgage company cut off our online access as soon as we filed and other people on this board have reported the same thing.

[spidge]

I'll check out the forms I recently received for more info as I may have missed it.

My bank is different from the mortgage bank so they have no control over my funds so I would think I could use the program. They did cut me off the online access at the mortgage(bank) as you stated to.
Also do you know if the 15 day grace period would still be in effect for us?

[RunningMan]

I have read on this board that there is no grace period in a chapter 13. I have been paying my mortgage two weeks early to avoid any problems, so I can't say from personal experience. I guess it really depends on your mortgage company and if they want to foreclose on you or not. If your payment is a day late, they could petition the court to lift the stay.

[spidge]

I guess the question is what is considered late, after the 1st or the 15th.

[LadyInTheRed]

I have continued to pay my mortgage payment through my bank's bill pay. Because of the way the bill pay works, a couple of payments were received by the bank after the 1st of the month due date. I never heard anything about a late payment, so I assume the grace period is still in effect. It makes sense that the terms of the loan would not change due to bankruptcy. I think the key as far as complying with the terms of your plan is to not be in default on the mortgage. If paying by the 15th keeps you out of default, that should be sufficient. But, if you don't find a definite answer in your paperwork, do check with your attorney to make sure you don't still have to comply with the procedure he told you to follow.

I didn't have to go through a special payment process before confirmation, but since you are post-confirmation that probably isn't important to your specific question.

[walkthaplank]

Your mortgage terms are still in effect, meaning that you still have a grace period. I too am in the same district as you and most likely have the same trustee as you. I mail my mortgage payment regular mail with a regular check and have been doing so since I filed about 16 months ago. If you have had problems in the past with your mortgage company playing games with your payment, yes do the certified mail, if you haven't, I wouldn't worry about it. Bill pay through your bank has a similar effect in that you have a paper trail showing that your mortgage bank received the payment.

Do what works for you, but I wouldn't want to waste the money for a certified check and certified mail every month. Your lawyer will tell you to be overly cautious, but did he include this expense in your monthly budget? I doubt it.

[RunningMan]

walkthaplank, I just filed two month ago like spidge. Perhaps tracking the mortgage payments pre-confirmation is a new requirement since you filed. However, I am pretty sure we don't have to do it after confirmation. I haven't been confirmed yet as the trustee asked my attorney to fix a "stacking problem" in the plan. I have another hearing in February to review that, but the trustee said I did not need to attend that one with my attorney. I agree that it would be expensive and a PITA. I found out at the hearing that ACH (automatic bank transfer) is an option for paying the trustee payment and I am going to choose that method.

[justbroke]

The reason that Trustees don't like you to use the grace period on mortgage payments, when you're under a Chapter 13 Plan Re-organization, is because that is specifically what gets most debtors in trouble!

[walkthaplank]

walkthaplank, I just filed two month ago like spidge. Perhaps tracking the mortgage payments pre-confirmation is a new requirement since you filed. However, I am pretty sure we don't have to do it after confirmation. I haven't been confirmed yet as the trustee asked my attorney to fix a "stacking problem" in the plan. I have another hearing in February to review that, but the trustee said I did not need to attend that one with my attorney. I agree that it would be expensive and a PITA. I found out at the hearing that ACH (automatic bank transfer) is an option for paying the trustee payment and I am going to choose that method.

Is this the Riverside Court? When I filed, confirmation hearing was the day of the 341. The plan was either confirmed, dismissed or (and I didn't see this sitting through two full days of 341's) continued. I sat through two days because my case was originally dismissed due to a problem with the lien strip motion.

During our 341's we were asked if our post petition mortgage payments were current. We said yes, because they were, and then the counsel looked me in the eye and said "are you sure?" (I had canceled checks just in case) and I replied that I was and she said "OK moving on...." There were a few people who were having their 341's that answered that they were still in their grace period and the trustee counsel accepted that as ok.

Just Broke, yeah I could see that, but it is good to know you can fall back on it in case something happens.

[RunningMan]

walkthaplank, yes it is the Riverside court although my trustee is a man and not a woman. My attorney told me there is only one chapter 13 trustee in our district, but maybe it was different when you filed. My confirmation was scheduled for the same day as the 341 hearing, but it was continued due to a problem with how my attorney setup the plan. Both my 341 and confirmation hearing were rescheduled for February 22nd. The trustee said I don't have to appear at the next one, just my attorney.

[walkthaplank]

The person sitting across from you at the 341 isn't the trustee, but the trustee's counsel (lawyer). At my 341's it was a woman lawyer, the trustee is a man. I'm glad you were able to continue your case, our first filing was dismissed due to the lien strip motion being denied because there wasn't a separate declaration from the appraiser stating that he was a licensed appraiser and that I had hired him... even though it said it IN the appraisal.

Good luck, sounds like the trustee is recommending your plan for confirmation, if it were contested you would be in the court too.

[RunningMan]

That makes sense. We had the actual trustee across from us at the meeting. Our lien strip was approved by the judge before the 341 hearing, so that was the only discussion about it. My attorney did not want me to get an appraisal, just sign a declaration of the value based on personal knowledge.