2nd mortgage forgot to file.

[ABC]

Scenario,

In a CH 13 almost 2 years. The 2nd mortgage was underwater at the time of filing ( we had a Full appraisal done ) and we assumed that we'd strip the lien at the end of 5 years. If I take the 2nd out of the debt total that'd put us around 80% payout although on 13datacenter I don't see the trustee made any adjustments ? IF we make more income this year do you think it's possible to go to the Trustee and ask to pay the remaining balance and close it out ? (100% payout of who did file). My attorney advised to just not make waves, save cash for rainy day, and do the pay out as is. Like most , if I could get this over in less than 5 years, I'd like to for many reasons.

[LadyInTheRed]

Paying 100% of allowed claims should end your plan. But, since your attorney is recommending you not make waves, I'm guessing it's not so simple in your case.

and we assumed that we'd strip the lien at the end of 5 years.

What do you mean assumed? Has your attorney not yet filed a petition to strip the lien? In Northern CA, the petition must be filed and resolved before the plan is confirmed. I don't know about the other districts.

If there is no order valuing the lien, the creditor had no reason to file an unsecured claim. They still hold a security interest and mortgages on a home you are keeping are not discharged in a Chap 13 unless they were declared unsecured via lien strip. My strong suspicion is that if you file a motion to value lien later in your BK, the creditor will be allowed to file a late claim in order to take part in distributions made to unsecured creditors. 100% of all claims would then be more than you are counting on.

[ABC]

I only said assumed because according to my attorney the Lien Strip only happens at the end of the CH13. The fact that they didn't file doesn't mean I can strip it earlier.

The numbers are roughly this:

$ 150000 second ( second didn't file a claim -- assumption is they forgot somehow )
$ 50000 other debt ( 1car and some cc's )

$ 42000 is what I'd pay over the 5 years.

I am asking, should my income increase to where I can pay $ 50,000 -- would that take care of the CH 13 and be 100% payout ??

[LadyInTheRed]

I provided the general answer to your question at the beginning of my post. But, the question of whether there is already an order valuing the lien is an important one in applying the answer to your specific case. It's true that the lien is not actually stripped until you complete your plan, but a motion to value lien is usually filed and an order entered early in the case. Your original post raises doubt as to whether that happened and you haven't cleared up that doubt. If there is not yet an order valuing lien, and you already have $50,000 in allowed claims, you very may well get another $150,000 claim after the court issues an order valuing the lien.

[LadyInTheRed]

I forgot one point I wanted to make.

Regardless of any answers you get on this forum, you should make sure you understand your attorney's reasoning for wanting you to lay low instead of paying 100% of all allowed claims to finish your plan early. It could be that he is worried about the court allowing a late claim by the holder of the second mortgage. But, he may also not want you to pay off your plan and then later suffer an unexpected loss of income which would have lowered the amount you pay following an amendment to your plan. If that's his concern, you can say you understand the risk, but that you want to pay off everything now and move on and will accept the risk of a future loss of income. He can either cooperate or petition the court to allow him to resign as your attorney because you won't follow his advice. You can also consult with another attorney, which I would recommend before ignoring your attorney's advice. There may be other reasons for his advice that members of this board cannot anticipate. This board cannot substitute for the advice of an attorney who knows every detail of your case.

[ABC]

I see, yes it was valued at zero because it was upside down at the time of filing and we did a full appraisal at that time so it would be concrete.
They didn't contest, but also they filed no claim at all.

[LadyInTheRed]

I see, yes it was valued at zero because it was upside down at the time of filing and we did a full appraisal at that time so it would be concrete.
They didn't contest, but also they filed no claim at all.

When you say they didn't contest, do you mean that they didn't contest the motion to value lien or that they didn't contest the value you put on Schedule A of your petition? Did the court enter an order valuing the lien at zero?