mortgage payments between filing and discharge?

[SunkShip]

Do I need to be paying the mortgage between filing date and discharge date? (pay and stay- not reaffirm)

I spoke to my student loan yesterday and they said I do not pay right now, that after discharge payments will begin as if I never missed a one. I will not be behind by 4 months since I am not paying right now.

Does the mortgage work the same? Or if I skip the 2 payments until discharge will I owe them as past due the day my case discharges?

[IBroke]

Since the mortgage is a secured debt, you can't skip payments without being past due later on....sorry.

If you don't reaffirm, you are not "past due" when it comes to any money you personally owe, but it will affect your lien. That could open the doors for a foreclosure-procedure.

[SunkShip]

Since the mortgage is a secured debt, you can't skip payments without being past due later on....sorry.

No need to be sorry, better to know than not. I have the money set aside for the payment this week, I just didn't want to send it in if it didn't count for anything. (I would have happily used it for something fun. )

[justbroke]

If you intend to actually "stay" you MUST pay. Student loans are different, as they go into a forbearance (non-collectible status) while your case is pending discharge.

If you don't pay your mortgage while your discharge is pending, you are likely to have a motion for relief from automatic stay served by the lender. This will allow them to pursue foreclosure. So if your intent is to "pay and stay", then you must pay to stay.

(Noting, that if your intent is to "pay and stay", but you are really going to just allow the home to go into foreclosure later, you do not have to pay. The regular foreclosure process will begin when you hit the statutory limits (90 days in most jurisdiction) of being behind in payments. Some debtors strategically make sure their payments are up to date through the 341 Meeting in case the United States Trustee (UST) thinks that you're not paying, and attempts to go for the "totality of circumstances" dismissal, since you are not paying.)

[IBroke]

No need to be sorry, better to know than not.

Nothing wrong with that. After all, that's what this forum is for.

[SunkShip]

So if your intent is to "pay and stay", then you must pay to stay.

I know it makes sense when you say it like that but nothing else in this process has been logical, so I just had to verify. Thanks for the quick response. I guess I know where my paycheck is going this week. At least we have a roof over our heads.

[justbroke]

The only reason to not "pay to stay" is if the decision to list "Retain and Pay" on your Statement of Intentions, was strategic and that you weren't sure what you wanted to do at the time.

[SunkShip]

Nothing wrong with that. After all, that's what this forum is for.

I just had this momentary "Oh my Dog! What if I owe nothing while the stay is in place and I am just wasting 3 months of payments for no reason?" And calling the bank would not help because they can not really say I owe anything because of the stay. UGH!

This forum has been my sanity savior through this process. Thanks again!

And Justbroke- good info. This was not a strategic move, I really need to keep the house for at least 4 years. It may become a "game" in a few years though. I am glad you added that note in case someone the opposite situation wonders the same thing. Thanks for taking the time!!!

[Wantmypeace]

"Some debtors strategically make sure their payments are up to date through the 341 Meeting in case the United States Trustee (UST) thinks that you're not paying, and attempts to go for the "totality of circumstances" dismissal, since you are not paying."

Can you explain this in more detail? Why would the trustee dismiss the case for not paying your mortgage? I'm confused. Thanks!

[tcreegan]

Hi Wantmypeace,

I think this would be if you claimed the mortgage expense on Schedule J but are not really going to keep paying it after the BK.
Someone might want a high mortgage expense to keep their DMI negative on schedules I & J, so they keep paying until the UST is done looking, then the quit paying.

But I could be wrong....if justbroke comes back maybe he can explain it better....

Tom in Colo

[justbroke]

[QUOTE=Wantmypeace;458902]

Some debtors strategically make sure their payments are up to date through the 341 Meeting in case the United States Trustee (UST) thinks that you're not paying, and attempts to go for the "totality of circumstances" dismissal, since you are not paying.

Tom is correct. There have been several cases that I have read, where the Debtor listed "retain and pay" on their schedules. Of course they were over-the-median filers, and the United States Trustee (UST) probed into the debtor's numbers.

The UST found that the debtor was not current and not paying the mortgage. As such. the debt would be discharged and the debtor would legally not be responsible to pay. The UST objected to the discharge and filed a motion to dismiss under the "totality of circumstances" reason (found in 11 USC 707(b)(3)(B)).

This is a well-known strategy that many debtors follow. As Tom eludes to, being over-the-median income and receiving a Chapter 7 discharge is very difficult unless you have a high mortgage payment, and you can include it on not only your Means Test, but also on your Schedule J.

[Wantmypeace]

So what if you are behind by one or two. We will have to skip two payments to gt a new car to replace the one well be giving up. But that would be in month one and two of our six month plan to file in June. So if we miss Jan and feb but continue to pay from mar through June will the trustee have a problem with it?

[justbroke]

So what if you are behind by one or two. We will have to skip two payments to gt a new car to replace the one well be giving up. But that would be in month one and two of our six month plan to file in June. So if we miss Jan and feb but continue to pay from mar through June will the trustee have a problem with it?

Most mortgage lenders won't allow you to pay anything short of everything due at the time you pay. In other words, if you're 2 months behind when the March payment is due, then you'd have to pay January, February and March in order to pay. I don't know of any lenders that allow "partial" payment outside some sort of forbearance or installment plan.

[Wantmypeace]

You mean, they won't take a payment that is late? I mean, if I miss the January payment, they won't take it in February unless I pay both January and February? That doesn't make sense. It seems like I'd just pay it in February and remain 30 days behind. This has become so complicated! LOL!

[Wantmypeace]

If I'm already 90 days behind when I file, but I want to stay and pay, does that mean I have to come up with all three payments or the trustee will throw it out, then? Because once I don't have to pay my credit cards, I can pay my mortgage. So, doesn't it make sense to let me start paying my mortgage?