Been lurking for months. Just filed 13, have a concern...

[Mamalama]

Good afternoon. Like many of you, I've been on the forum for a few months now and this forum helped put me at ease about our decision to file bk. Hubby and I just filed yesterday and I have a question. I apologize if I don't make too much sense, but I'm a bit confused myself...

I want to start by saying we are very pleased with our attorney and the paralegal that is assisting her. The legal assistant called us about a week ago and said we needed to be current on our mortgage payments (we have our home and 2 rentals) before we filed so we could avoid unnecessary problems. We had a couple of late fees that we kept carrying over month to month, so we went ahead and paid those and got caught up on one of the rentals - we were current on our home and the other rental. When we met with the paralegal on Wed. to review our documents, she mentioned that we needed to be current on all mortgages so that we don't run the risk that the trustee will want to collect 10% of any payments/late fees that were in arrears (she mentioned they will check with our mortgage co. to see if we are current). Here is where I'm concerned... We planned on making our mortgage payments on April 13. I'm concerned that if they check our account from here til then, the trustee will consider us behind on our payments. My husband insists that we are not technically late until after the 16th of the month, when the mortgage company applies a late fee. When I emailed the paralegal about it, she said just to try to make the payment as early as possible in April just to be on the safe side.

Again, I apologize if I am not making sense, but I'm hoping someone out there knows what the heck I'm talking about and can give me some perspective. I appreciate any feedback! Thank you.

[despritfreya]

Do not concern yourself. If you have just filed, your April payment is a post petition payment and is not the Trustee's concern. If you are current through March, 2012 each lender will file a claim showing that there are no arrears. Nothing to worry about.

I suspect the reason your attny wanted you to be current is that you are in some County that caused the case to be filed in Tucson. If you were not current on your residential mortgage and your case was filed in Tucson you would have been forced to make the post petition mortgage payments to the Trustee and, thus pay her an additional 10% each month (The Trustee makes a mint off of this). Just stay current and you will be fine.

Des.

[Mamalama]

Thanks for the reply Des. I am in Tucson, which leads me to think that I should try and make the payment asap... Is this something that only pertains to Tucson? Would you happen to know how soon after a person files bk that lenders can file a claim? I have budgeted to make the mortgage payment on my home on the 13th and the rentals will be paid on the 6th of April. If I have a couple of weeks, we'll be okay, otherwise I'm concerned that we'll be stuck with a much larger monthly payment.

Do you think our mortgage company can claim we are not current because it won't be paid on April 1st? My husband says we are current, because we have until the 16th before we incur a late fee, but I'm not convinced.

[LadyInTheRed]

The issue with your trustee collecting 10% has to do with being late at the time you filed. Since you filed BK before the mortgage due date, your mortgage was current on the date you filed and the 10% issue won't apply. The lender's claim can only include arrears if you were late on the date you filed.

Yes, you need to stay current on your mortgage during your Chap 13. Paying within the grace period is fine.

[justbroke]

My Trustee was making a mint from me by paying my mortgage and arrears on my investments. At one point, the payment to and through the Trustee was over $7,000/month. Yep, the Trustee was making $700/month or $8,400 a year to write checks.

[despritfreya]

I am in Tucson, which leads me to think that I should try and make the payment asap... Is this something that only pertains to Tucson? Would you happen to know how soon after a person files bk that lenders can file a claim?

1. Conduit mortgage payments are, for now, unique to cases filed in Tucson. Here is the link for the "standing order". . .

http://www.azb.uscourts.gov/Documents/EWH_CH13_Standing_Order.pdf

Please note that this also applies if you fall behind post petition. Please also note that it ONLY applies to your residence.

2. Creditors have a window of time in which to file a claim. Secured creditors, while they typically do file claims, are not required to do so. The "claims bar date" for your case can be found on the 341 notice you received from the Court shortly after you filed.

Des.

[Mamalama]

Thank you all for your replies, it's making more sense to me now. It's interesting and it stinks that this only applies to Tucson. So Des, from what you're saying and what I read on the link you provided, if the rentals have arrears, the Trustee can't get a 10% cut on that, only on primary resident, right? I hate to be a pain, but I have a few more questions, Des. As it stands, in our plan we're paying our mortgage payments separate from the bk payment. Does that make any difference? Would you happen to know how long it may take a mortgage company to file a proof of claim? Hubby got online to schedule to have our mortgage payment withdrawn on April 13 - I hope that helps us....

Sorry I'm asking a million questions. I would just hate to be stuck paying an extra $125 a month for the life of our plan! Thanks again!!

[Mamalama]

My Trustee was making a mint from me by paying my mortgage and arrears on my investments. At one point, the payment to and through the Trustee was over $7,000/month. Yep, the Trustee was making $700/month or $8,400 a year to write checks.

The Trustee was making $700/mo?? I cringed when I read that, justbroke. Glad you were able to convert to a Chapt. 7!

[despritfreya]

Des, from what you're saying and what I read on the link you provided, if the rentals have arrears, the Trustee can't get a 10% cut on that, only on primary resident, right?

Correct. Only applies to primary residence.

As it stands, in our plan we're paying our mortgage payments separate from the bk payment. Does that make any difference?

So long as you remain current you will continue to make direct payment to the lender. If, as it relates to your residence, you fall behind thus forcing the lender to file a Motion for Releif From Stay, conduit payments will be forced upon you.

Would you happen to know how long it may take a mortgage company to file a proof of claim?

Depends upon the lender. Some are quicker than others. Some will opt not to file a claim, especially if payments are current. No way to tell.

As it relates to the conduit payments, yes, for the moment, only Tucson cases require this. IMHO it is simply a way to line the trustee’s pocket and I am not sure why the Phoenix trustees have not joined in. However, since things are slow I am sure greed will get the better part of them and it is only a matter of time. In fact, I suspect that eventually we will be dealing with all mortgage payments regardless of whether or not the property is the primary residence or whether or not payments were current when the case was filed. Greed is greed and, in general, if there is a buck to be made off the debtor’s back, trustees jump at it - what a shame.

Des.

[Mamalama]

It really stinks that they can do that, especially given the position we debtors are in... Like you said, I'm sure Phoenix isn't far behind in doing that as well. I appreciate your advice Des!