Saving Ch13 and delinquent mortgage.

[spidge]

I am down to 16 payments in my ch13, but now over 60 days late on my mortgage which is paid outside the BK plan. In five months all the mortgage arrears will be paid in the plan from original filing. I plan to call my attorney but would like to go in with options.
Could the late payments be added to my plan and the trustee payment increased? Would the trustee require the mortgage be paid through the trustee for the remainder of the ch13 plan? Not ideal, but might spread the recovery amount over a longer period.
What is the common practice for mortgage companies for ch13 plans to become current on post filing arrears? I have read they might offer a plan to become current over a 6 month period. This might be more than I can deal with.

Stressed mostly because we are so close to completing the bk and the total amount just isn't that much. Just more than I have now, but I do have a substantial 401k if needed/allowed. The hurtle has been me on workers comp and the little woman not having been paid for two months in the summer. I should be back to work as early as Tuesday and the wife will get paid at the end of August so our income will increase back to normal. We had a large bill that sucked up my summer funds again too, otherwise we would have been OK. Also there was an error on my W/C and I was not able to make the last mortgage payment until now so am holding it until I am advised by the attorney.

Thanks for any advice and shared experience.

[despritfreya]

Could the late payments be added to my plan and the trustee payment increased?

This is a viable option unless court rulings in your district hold otherwise. The Bk Code allows you to cure any default. It does not specify if that default has to be pre or post petition. See In re Garcia 276 B.R. 627, 636 (Bankr. AZ 2002)

“For two reasons, the language of the Code does not support any argument that certain defaults are incurable. First, both (b)(3) and (b)(5) specifically provide for the "curing of any default" (emphasis added). That language certainly implies that all defaults may be cured, not just certain kinds. Indeed, the Ninth Circuit relied on precisely that language to reject an argument that a particular kind of default was incurable under the identical language applicable to Chapter 11 plans, in § 1123(a)(5)(G): 'Section 1123 speaks of `any default'.... The natural reading of these sections is that plans may cure all defaults....' The Fifth and Eleventh Circuits have relied on that language to conclude that postconfirmation defaults may be cured. . .”

Would the trustee require the mortgage be paid through the trustee for the remainder of the ch13 plan?

Only if required by your local rules.

What is the common practice for mortgage companies for ch13 plans to become current on post filing arrears?

As you alluded to, lenders typically agree to a six month cure in a stipulation that resolves a motion for relief from stay.

There are options. Just discuss it with your attny. This is not a big deal and do not touch that 401k unless there is no other alternative.

Des.

[Pandora]

I was under the impression (and was told this by both my attorney and the Trustee) that if we fell behind on our mortgage, even though its outside the plan - our Ch. 13 was in danger of being dismissed because it "technically" still part of our 13 - and the mortgage co. could call the debt.

Maybe its different with each case....but I didnt think you could add arrears to your Ch. 13 plan once you were already in it. Sort of like if you got new debt (i.e., medical) and ended up having to make monthly payments to the drs. It cant be added to your current 13 plan, but if there is room in the plan, you can request an adjustment if needed.

???

[despritfreya]

Maybe its different with each case....but I didnt think you could add arrears to your Ch. 13 plan once you were already in it. Sort of like if you got new debt

Except that the post petition mortgage delinquency is not "new debt". It all stems from a pre petition obligation. Now, do we routinely add post petition mortgage payments? "No." And. . . when we do, it is usually with approval by the lender's attorney. However, if I were forced to litigate an objection to an amended/modified plan I am sure the reasoning of Garcia would prevail - the Code simply states one can cure "any default".

Des.

[spidge]

Well, I may be toast then as I will no longer receive workers comp checks. Fingers crossed the doctor will release me tomorrow and the company takes ma back. I will still be three months behind on the mortgage so will call attorney after the doctors appointment and go from there.

At this point I don't think I can change to a chapter 7 without loosing the house because I am behind on the house payments, correct? Even with 401k resources I would have to let the house go.

[Pandora]

Thanks for the clarification Des...

Spidge... I hope you can add it and remain in your 13 to a successful completion! Know its got to be very frustrating given you've come this far. Keep us posted and good luck!

[spidge]

I am so very frustrated now. So I have been released from my doctor but have been rated at 5% in the shoulder through the qualified medical examination. My company will not take me back until a "fit for duty" is competed successfully and is not scheduled until 9/9. I cannot obtain disability without a doctor to complete the info yet workers comp checks have ceased. So little to no income for 3 weeks so far and likely three more before going back to work. That is if I pass the fit for duty.

Just beside myself.

I guess I will call the attorney and touch base, but without any respectable income I cannot enter into an agreement with the mortgage company to catch up. Once back to work in September I think I would be OK, but I would not be able to add $600 per month to catch up on the mortage.

I agree that I should avoid using the 401K, but if I could access say 10% of it to bring the mortgage current and maybe pay off the BK altogether with another 5%.

Thanks for listening.

[dmc-2008]

I am so sorry! I hope this works out! You have come so far!

[spidge]

Still on freak'n hold. How long does it take to write a report that explains that I am able to do the work?!!!!!!!!!!!!!!

Meanwhile I paid the trustee for August, but not the mortgage.

Experiencing depression, little to no sleep, mad as hell, stressed out, weight gain, old car syndrome, old house syndrome, old dogs, etc....oh and falling apart myself.

The light at the end of the tunnel is so very hard to see.

At the F&%@ it stage!!!!!!!!!

[dmc-2008]

Still on freak'n hold. How long does it take to write a report that explains that I am able to do the work?!!!!!!!!!!!!!!

Meanwhile I paid the trustee for August, but not the mortgage.

Experiencing depression, little to no sleep, mad as hell, stressed out, weight gain, old car syndrome, old house syndrome, old dogs, etc....oh and falling apart myself.

The light at the end of the tunnel is so very hard to see.

At the F&%@ it stage!!!!!!!!!

Spidge I hear ya!!! I can relate!!!! I live in a condo that I hate but if I stick it out and there are no unexpected I win!!!! It's so freaking hard though!!!!! Xoxo to you!!!!! How long are you in for?

[dmc-2008]

U r almost home! You should be ecstatic!!!!!!

[spidge]

U r almost home! You should be ecstatic!!!!!!

Being so close is why I am fired up. I was in a hole before, but not to the point where I had doubts about finishing the plan.

[Drazil65]

Sorry for all this stress and it has to be heartbreaking to be so close. But step back and take a reality check, look at what this house situation is doing to you? Its killing you, why? So the bank gets theirs, you will have a heart attack or stroke from the stress then where does that leave you? Without the house anyway? Its a building, a box, would you die for it? The stress will destroy any chance you have of getting back to work.

Do not touch your 401k, one of the worst decisions you could possibly make and again for what? So the bank will not take back their house (and as you are experiencing it was never really yours until it is paid off), look when did the bank become number one in your life above you and your family? Seriously, step back and take a breathe and look at this situation for what it is. You are suffering at the hands of the mortgage company and at this point the reality is you cannot afford this house, period! What happens when the "next big life event happens" and you fall behind again?

I wish you luck but put yourself and your family first and things will not be better if the stress gets you, it can get much worse for you....hopefully you will have that epiphany, good luck!

[justbroke]

Spidge, I'm sorry to read the news. I see Des is providing some guidance. Hang in there.

[despritfreya]

I don't disagree with Drazil65. A house is simply a place to live and if keeping this particular place to live is not possible (for whatever reason) you move on. It becomes a business decision. Once you take the emotion out of the mix, decisions become clear and easy to make with no regrets.

Now, if you are on the bubble with a good prospect in the next month to "save" the home, the question becomes. . . what does your attny recommend?

As you and I previously batted around, you can try to modify the Plan and put the post petition arrears into it even though you now have less than 16 months to go. Or, once the Motion for Relief is filed, you can enter into a stipulation to "cure" the post petition default but the cure would most likely be only over a 6 month window. Another option is attempting a HAMP modification, which has nothing to do with the bk. Have you looked into the HAMP modification process?

Des.