Got Confirmed but still a little confused

[whiscox]

First, I want to say thanks for everyone who has helped me to keep my sanity through this process. It is not over yet, but feel like a big weight is lifted since we are now confirmed. While I am very excited about this, a new wrinkle seems to have come about, and as has usually been the case, I can get no response from my attorney.

We had a second mortgage that we got stripped, but had to get an appraisal because they disputed it. The appraisal showed that our home was about $80,000 underwater and so their objection was quickly removed. What happened next is what has me so confused and not sure what to do next.

When we got the confirmation plan it showed our 1st mortgage being listed as both a secured and unsecured (for the approximate $80,000 mentioned earlier) creditor. It also stated on the plan that we would be paying our mortgage outside of the plan. I should note that our lender for our first mortgage never even filed a claim. I thought that maybe it was just a way of showing that based on the appraisal why the 2nd mortgage was not a secured loan. Come to find out, our first distribtion to the creditors included a payment to our primary lender for their portion of the unsecured creditors.

This all seems very odd, and while I would love to talk to my attorney about this, he seems to have no interest in calling me back about this now that I am confirmed. I was curious if anyone has heard of anything like this before and if maybe it is working this way because they did not file a claim. It would be amazing if I could get the principle of my mortgage reduced to the secured amount upon discharge, but I did not think that was possible for a first mortgage under bankruptcy law. I just do not want this to affect me being successful in my plan in any way. Thanks in advance for any information you may have!

[Pandora]

The way our plan works is we pay our 1st outside of our plan, however technically your 1st is considered part of your BK. They shouldnt have filed a claim since they were excluded, but they would be notified of your filing. They will not report payments until after you complete your 13; when you do complete it, they will continue to report as previously done. Your 2nd was approved to be stripped, but it will not be stripped until you complete your Ch. 13. What you're seeing on your paperwork of "secured / unsecured" is because your 1st is secured / 2nd is not. Your 2nd will receive the same % as all other unsecured creditors receive, with the remainder of those debts (if any) being forgiven/wiped out upon completion. First mortgages cannot be crammed down in a BK... you can however modify it if you qualify / lender agrees, but generally that should be done prior to your Ch. 13 being filed for the most part as it can free up $, thereby increasing your DMI possibly.

not to worry - I was confused when I saw the way it was written on our paperwork as well (same as yours) until our lawyer explained how it all worked . Congrats on getting confirmation!

[whiscox]

Pandora,

Thanks for the response. It is good to know that the paperwork is probably not incorrect. I am still not sure why they would be taking part of my payment to the trustee and distributing it to the lender of my primary mortgage. That is what I think is incorrect. Even though it is listed as both a secured and unsecured creditor, I would think that they would still not put any of the payment for the plan towards it since I am paying the mortgage outside the plan.

[Pandora]

Are your 1st and 2nd with the same lender by chance Or.. are you behind at all in payments to the 1st? You can include arrears in your plan and still pay your 1st outside of it. If so, that may account for what you're seeing.

Other than those 2 things, I'm not sure why your 1st would be getting any $ either...

[whiscox]

We are actually completely up to date with our first mortgage and the second is with a different lender. I am just concerned how this will affect my case. It is obviously not something I did wrong, but am worried it could come back to bite us later on. I don't want to mention it for fear I will have to go through the whole process of getting confirmed and opening things up to objections again, but I also do not wish to be told 3 years into it that I have to come up with the money they mistakenly paid to the 1st mortgage lender. I just wish my attorney would contact me back but it has been almost 3 weeks and I have called and e-mailed several times. I am pretty sure he has decided he has done his part at this point.

[lrprn]

...I also do not wish to be told 3 years into it that I have to come up with the money they mistakenly paid to the 1st mortgage lender.

This won't happen. If (and that's a big if) this happened, the trustee would demand the mistakenly disbursed money back from your first mortgage company, not from you.

I just wish my attorney would contact me back but it has been almost 3 weeks and I have called and e-mailed several times. I am pretty sure he has decided he has done his part at this point.

Make an appointment to see your lawyer in the office, or ask the office staff to schedule a brief phone call at a time when your lawyer is having office hours. That way you make sure your questions are answered to your satisfaction.