Worried about attorneys advice

[charmd]

We met with our attorney last week to advise we are going to surrender the home.

Long story but briefly- we filed Chapter 13 in 2010 and were able to get a loan mod on the first in 2011. I was working with Citi on the second but it now has been sold to NCO? and they said the minimum amount Citi will take is 10% of the payoff or $20,000 which we don't have.
The house is now worth about $710,000 and we owe $880,000 so just going to let it go at this point. Too many repairs we can't afford.

I thought we would be signing paperwork with our attorney, but he said stop paying the second and only pay the first every other month until a motion is filed. Then in response we will surrender the home.
He said this way we can save the most money, but I am really worried about the trustee being upset that we are violating our BK by not paying. I don't want him to dismiss our case. The attorney did not think this would be a problem at all- has anyone heard of just staying and waiting for the lender to make the first move?

We did try a lein strip on the second at the time of our BK, but was partially secure- still is.

Thanks and sorry so long

[8forme]

We are facing a cross country move and our attorney told us to stop paying our mortgage and our mtg company will "eventually" file to lift the stay and forclose with no contest from us. We have not paid since Dec and have not heard a word from the mtg company. I asked, point blank, if that would cause our CH13 to dismiss and was told NO it would not. That may be for our district, so definitely heed your attorney's advise. Though, I would be inclined to not pay at all rather than every other month...not sure what that accomplishes. We also had a successful lein strip at the beginning of our CH13. Our second is now listed as unsecured and ordered to be released at discharged. We will be out of here by May at the latest but it has been nice being able to save the payment for rent and moving expenses.

[charmd]

Thanks for the information. We are going to schedule a follow up meeting with our attorney (his suggestion). I feel better that someone else received the same information. Just don't want to mess things up 2 years in.

[Flamingo]

We are facing a cross country move and our attorney told us to stop paying our mortgage and our mtg company will "eventually" file to lift the stay and forclose with no contest from us. We have not paid since Dec and have not heard a word from the mtg company. I asked, point blank, if that would cause our CH13 to dismiss and was told NO it would not. That may be for our district, so definitely heed your attorney's advise. Though, I would be inclined to not pay at all rather than every other month...not sure what that accomplishes. We also had a successful lein strip at the beginning of our CH13. Our second is now listed as unsecured and ordered to be released at discharged. We will be out of here by May at the latest but it has been nice being able to save the payment for rent and moving expenses.

Your worry here is when the Trustee finds out you are not paying your mortage payment as directed by your Plan (he/she will find out). Those funds are alloted in your Plan for your mortgage payment and if not being paid as required are now available for distribution to other creditors. Hopefully your attorney has consulted with your trustee and there is permission for you to stop those payments.

[8forme]

My mortgage payment is not part of our plan, we pay it independently outside the plan. Yes, my attorney works closely with the trustee and said this was standard practice where we are at. We also don't need to resubmit expense sheets when we move unless we need to modify the plan if our income drops. I have saved every email and voice mail about it and asked point blank if it would cause any problems and was told NO, it would not. We seem to be in a very relaxed district though from what I read of other districts on here. We would never just stop paying without our attorneys advise and risk our plan.

[Flamingo]

My mortgage payment is not part of our plan, we pay it independently outside the plan. Yes, my attorney works closely with the trustee and said this was standard practice where we are at. We also don't need to resubmit expense sheets when we move unless we need to modify the plan if our income drops. I have saved every email and voice mail about it and asked point blank if it would cause any problems and was told NO, it would not. We seem to be in a very relaxed district though from what I read of other districts on here. We would never just stop paying without our attorneys advise and risk our plan.

Please note that even though you pay your mortgage payment outside your plan, your mortgage is still part of your Chapter 13 and is included in your Plan. We paid ours outside the Plan also and when the mortgagor received word we had filed, we were informed to send our payments to a new address (their bankruptcy section) and the mortgage payment is listed in our Plan order as part of the Plan with instructions for us to pay the paymente outside of the Plan. That is good you have all that informatoin from your attorney and I hope things work out for you because in order to stop a mortgage payment or Plan payment during a Chapter 13, trustee permission is required and the Plan modified. You may end up with additional funds eventually tacked on to your Plan for the amount of the mortgage payments not made to increase payments to creditors as most certainly your Plan will be reviewed and modified. I'm not trying to burst your bubble just giving you reality facts. One just cannot modify a Plan on their own by not making payments. Your only concern is the additional money now in your pocket since you are not making mortgage payments. Best of luck to you.

[8forme]

I'm not trying to burst your bubble just giving you reality facts. One just cannot modify a Plan on their own by not making payments. Your only concern is the additional money now in your pocket since you are not making mortgage payments. Best of luck to you.

We are not pocketing the money to pocket it. We are moving cross country and using the money for the move which will be about 10K with first, last, deposit, hotels for 3 nights (we need 2 rooms a night as we are a family of 10), gas, food, and movers. Then we will be right back to paying rent at about the same rate as our mortgage, maybe a bit lower. We are not staying here until they kick us out, we will be moving in the next 5-6 weeks. We will have receipts for everything and our attorney's blessing on it all. We have also already figured our tax bill as we won't have any deductions for mortgage anymore and it comes to about $725/month more in federal tax alone so I am sure we will be fine. Our attorney also said we did not need to submit modified expense sheets unless we were going to seek a lower payment, which we are not.

I understand what you are saying, but my attorney said that this is how we would do it in our district. Believe me, I double and triple checked it first.

[Flamingo]

We are not pocketing the money to pocket it. We are moving cross country and using the money for the move which will be about 10K with first, last, deposit, hotels for 3 nights (we need 2 rooms a night as we are a family of 10), gas, food, and movers. Then we will be right back to paying rent at about the same rate as our mortgage, maybe a bit lower. We are not staying here until they kick us out, we will be moving in the next 5-6 weeks. We will have receipts for everything and our attorney's blessing on it all. We have also already figured our tax bill as we won't have any deductions for mortgage anymore and it comes to about $725/month more in federal tax alone so I am sure we will be fine. Our attorney also said we did not need to submit modified expense sheets unless we were going to seek a lower payment, which we are not.

I understand what you are saying, but my attorney said that this is how we would do it in our district. Believe me, I double and triple checked it first.

As long as you have all your t's crossed and i's dotted and your attorney's blessing, all should be fine. You mention above in a posting..."We will be out of here by May at the latest but it has been nice being able to save the payment for rent and moving expenses." I was just pointing out that right now that money is in your pocket (being saved) and not being applied to a required Plan payment (your mortgage payment which is part of your Chapter 13). Since it appears your trustee is not yet aware of this (I would specifically ask my attorney if the trustee has granted permission for mortgage payments to stop and be allocated for moving/rental expenses), you may have some inquiries to deal with shortly when he becomes aware as you have not yet moved and one cannot change Plan payments or base their situation on events that have not yet occurred or been expensed/paid for. One's Plan is based on their financial status on the day they file; not two or three years later. Right now those funds are sitting available and that is all I am saying and I just hope it all works out for you. Many times we have posters on here indicating they believe they and their attorney have everything covered, that appears what they do in their district, etc., etc., and something pops up to bite them due to the Trustee. Best of luck with your move and hope everything works out for the best for you...

[charmd]

Flamingo- since we are not moving cross country- we just can't afford to maintain the home anymore with the second payment and can't come up with $20,000 to pay the amount requested by CitiBank for a reduced payoff.
We did have a meeting with our attorney, but I am calling today to set up another appointment since I don't mind if he wants to have us file paperwork to surrender the home. It was his suggestion to wait until the lender notifies the court, but I don't want to have a problem.

I may be reading your post wrong, but did you file paperwork to surrender your home? How long were or are you able to stay?

Thanks