mortgage payments between filing and discharge?

[justbroke]

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!

Exactly, it doesn't make sense, but these are called "simple interest" loans, and require all payments. This is EXACTLY how 90% or more homeowners end up defaulting on their mortgage. They believe that they can fall behind by 31 days and just "pay January's payment in February and February in March". The magic trigger is the 30 day mark. Once you cross the 30-day mark, you are delinquent and the only thing that would bring it current is the past due payments plus the current payment due.

If you paid January on January 31st, you'd be fine. But, if you pay January on February 1st, you would need to pay both January and February. That's just the way it works.

[Fallonedward]

I would immediatly stop paying the CC's and get current on your mortgage. We were never behind on our mortgage but once we went down to one income, I had to stop paying the CC's so I could pay the mortgage.

This past month I got behind on the 2nd mortgage but will be current prior to filing

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?

[ladycee]

I agree with Fallonedard,

Why even bother to pay the cc's when you want that debt discharged? Use the cc money to insure that you don't lose the house.

Chris

[discouraged]

So it would be if you needed to come up with the expenes? My attorney advised me to quit paying everything, 1st, 2nd etc. except utilities. But, I am/was on unemployment (I currently have a contract position with the city that only pays 12.30 an hr. The contract is for no longer than 6 months as that is all they can have a temp for - Union rules). I was gettiing 322 a week from unemployment and no one could understand how I even paid for everything before I finally gave up and saw an attoney. Personally I don't know how I did it either but - will that be counted against me as having money? I am saving what I can for the lawyer instead of paying my bills. Is this okay?

[jenbow]

Just Broke - if I am past due on my 2nd mortgage by three months, can the US trustee file a "totality of circumstances"? I am using the 2nd on my means and schedule j

[TSHOCK84]

i am in the exact same boat..i filled chapeter 7 and i am about 1-2 months back on my mortgage..but now that im not paying i have extra cash that i am planing on saving to move with into a new spot..its kind of a catch 22 and i am kinda of worried about it.

[tcreegan]

Hi all,

I have read a couple cases where the UST objected to using a mortgage/car payment as an expense on Sched J when the debtor wasn't actually making the payments. Seems to be less of an issue on the means-test. Of course it ultimately falls on what your trustee thinks about it.

Tom in Colo

[tyson24]

I have to be missing something here. My attorney told me that the schedule J is for expenditures that you would be paying if you had the money. My rental property mortgage is on there and we are not paying it. We are current on our house though.

[justbroke]

I have to be missing something here. My attorney told me that the schedule J is for expenditures that you would be paying if you had the money. My rental property mortgage is on there and we are not paying it. We are current on our house though.

This is true, but the United States Trustee (UST) can decide to probe deeper into your numbers. The UST usually doesn't bother if you're under-the-median income, as it is usually a waste of time to badger an under-the-median income family -- and probably looks bad.

In any event, the UST basically has to thoroughly review an over-the-median income filers schedules to ensure that they are deserving of a discharge. The new bankruptcy code (BAPCPA of 2005) was designed to send most over-the-median income filers into Chapter 13. This in no way means all over-the-median income filers must go to Chapter 13, but most will be forced to. The UST enforces this desire by Congress to send most into Chapter 13, by scrutinizing the schedules for a Chapter 7 filer.

Now that I wrote that, what does it have to do with including payments on secured debt that you are not keeping?

The UST will use those payments as proof that your situation has changed because of the bankruptcy. This is known as a "totality of circumstances" objection to discharge. If you put that you're surrendering a secured debt, yet include the "future" payments on Schedule J, and you are over-the-median income, the UST is highly likely to object to that inclusion.

How your attorney plans to deal with it or your overall strategy, is based on your attorney, his/her knowledge of your local courts and rules, and their relationship with the UST.

[TSHOCK84]

so i probably shouldnt worry to much since i am way under the median income for a family of 5

[Fallonedward]

This is my biggest concern, that now that I'm on over the median filer by only about $2K now that I have to include hubby's UI that the United States Trustee (UST) will beat me down. I hope that by looking at my case and seeing the only reason I'm over is due to UI (something that will drop off) that I'm not worth it to pursue....

[keepinitreal]

This is my biggest concern, that now that I'm on over the median filer by only about $2K now that I have to include hubby's UI that the United States Trustee (UST) will beat me down. I hope that by looking at my case and seeing the only reason I'm over is due to UI (something that will drop off) that I'm not worth it to pursue....

Our bk lawyer, who is also a Trustee, deducted 50% of my UI payments, claiming it was Social Security. This allowed us to be under the median. We filed in Ohio, so your mileage may vary.

[Fallonedward]

Wow, thanks for the info

Our bk lawyer, who is also a Trustee, deducted 50% of my UI payments, claiming it was Social Security. This allowed us to be under the median. We filed in Ohio, so your mileage may vary.

[telco95]

What is the difference between "stay and pay" vs "retain and pay"?

[justbroke]

What is the difference between "stay and pay" vs "retain and pay"?

They have the same meaning.