WalkAway Fail!

[LetItGo]

I just learned an important and expensive lesson. When you decide to default on your mortgage, you need to put a stop to any standing automatic withdrawal orders with your bank. We filed chpter 7 a few years back and did not rre-affirm the mortgage. We had auto payments prior to that until the BK, since then we have been mailing a check. We dedcided to stop paying on our September payment and sent that money to pay off other debts instead, to my dismay my account was negative this morning seeing an auto withdarwal posted from my mortgage company. It cost me $25 but I put a stop to all future ACH withdrawals from them. I guess we'll be staying in the house at least a month longer...

[ValleYum]

Yikes! So I guess your mortgage company had saved your autopay info from before you filed? Then when you missed September's payment they used it again? Wow.

Well, neighbor, I wish you luck with your walkaway. We've been 2 years here in SW Washington without a payment. We are moving in October, though... something to be said for just getting on with our lives with some degree of certainty.

[bcss]

You should be able to go to your bank and have it rescinded, My bank just had me fill out a form for an unauthorized withdrawal. It was a credit card account that just decided to take their payment even though I stopped the automatic payments. Reason why I don't like auto payments. Worth a try.

[helpmeout]

Go to the bank that took the money and tell them to return the money that they took to pay on a debt discharged in a bankruptcy. What they did is a violation of the permanent injunction. You are free to pay, they are not free to just take the money.

You can also contact your bank and tell that that was an unauthorized withdrawel and you want your money back. And I would also change your account number. It may be a pain, but will prevent this from happening again.

[ValleYum]

I wonder if the OP's bank also holds his mortgage... if so, does the right to "setoff" survive after discharge (being a secured debt and all)?

Regardless, I think I would still change banks to be on the safe side but I am a chicken. Good luck LetItGo!

[justbroke]

I believe that the bank needs to return the money as well. This is a very interesting case and it may be in fact a violation of the discharge injunction! I know that many banks like to use their "right of setoff" but this is not allowed against discharged debts. (Right of offset allows them to use other accounts you have at the bank to pay an account(s) that is not paid.)

I too would absolutely demand the return of the money and definitely mention "violation of injunction", "contempt of a court order", "will be contacting my attorney", and "serious sanctions".

The right of setoff doesn't survive against a discharged debt. I just won another Motion for Sanctions (well settled), for a creditor who attempted to offset a current payment for the discharged debt.

[greenthinker]

We've been 2 years here in SW Washington without a payment.

ValleYum,

We're also in Washington State, and recently modified our plan to surrender our home. I see that you've gone 2 years so far without a payment, and they still haven't begun foreclosure proceedings? If I may ask, who is your lender? We are with B of A, and as soon as our modified plan was confirmed, we started getting FedEx packages with loan mod info. There has been no collection activity (letters or phone calls) yet at all so far. I'm just curious about what to expect, although I know that our mileage may vary. Thanks!

[LetItGo]

I wonder if the OP's bank also holds his mortgage... if so, does the right to "setoff" survive after discharge (being a secured debt and all)?

Regardless, I think I would still change banks to be on the safe side but I am a chicken. Good luck LetItGo!

My current bank is not the leinholder on the mortgage. This is an account we opened just before filing BK, unfortunately when I did that I switched my mortgages direct debit to this new bank until I filed..

[LetItGo]

Thanks all,

Thanks for all the input, I will fight to get the money back. I'll keep updating this post as to what happens. First I'll attempt doing something with my bank and if need be, contact the mortgage co. directly.

[ValleYum]

Hi greenthinker!

We stopped paying Chase in October of 2010 in hopes of getting a loan mod. I had lost my job due to an injury in 2007 and we were one paycheck from disaster trying to pay everything with one income. Then, we got that paycheck - you know, the disastrous one.

Once we stopped paying, the collections group at Chase was calling demanding their money while the mod group was losing every 3rd document needed for a mod. So frustrating! ( As an aside: the escrow group continued to pay property taxes and homeowner's insurance the entire time).

This right hand not knowing what the left hand is doing nonsense along with internet reading opened my eyes and I started researching BK. We had a consult in October, waited 1 month for a public law board award to fall off our income lookback and filed. You can see the dates in my siggy below for our Chapter 7 details. We did file with mortgage arrears but explained to the trustee at our 341 that we were mid-mod with the bank and we planned to retain and pay the house.

We tried until May 2011 to even get trial payments set up but stopped when we got the NOD just after the middle of May 2011.

Then... NOTHING. Not one single letter or phone call or anything until May 2012. They called to ask us our intentions for the house. LOL, what?

So we started a mod application this time for Chase's in-house program at the closest Homeowner's Assistance Center (I think that is what they call it) in June 2012. Got a final mod in August 2012 (no trial payments - it was a permanent mod) but it was for a whopping $50 per month reduction from our old payment. 1% drop in APR and reset the loan to 30 years. Ummmm, no thanks. We did not return the mod by the due date and figured the Notice of Trustee Sale would follow. Nope, September 20th they sent an identical (but for the dates) mod package to be returned by the following Monday.

After Chase's generous mod offer that we turned down in August, we decided to rental house hunt and we found the perfect one for us and the fur-kids. The uncertainty was getting to us as well as the size of the house and the huge flight of stairs (the ones I fell down that started this whole mess).

We get our keys to the rental this morning. We should be fully out; leaving behind a broom clean house by the end of October. We are notifying Chase once we are fully out, turning off the utilities but keeping the yard maintained and paying our (thankfully small) HOA fees until the bank forecloses.

I hope this helped and wasn't too long to read. Good luck to you in your walk and keep us posted.

[Floridagail]

I have BOA here in Florida, 28 months now of nonpayment waiting for BOA to forclose. I am enjoying free rent. But also about ready to move on. Only acceptable mod would be principal reduction, no doubt not possible. I guess the attorney who has forclosure wants to stay on payroll is my guess.

[justbroke]

Bank of America is actually offering principle reductions in Florida as part of their settlement with the Florida Attorney General and the U.S. Attorney General.

[Floridagail]

That is interesting, I had not heard that of Florida, We have not received any letter as of yet. We are not eligible for mod as our pmt is less than 32%. So will be interesting if we get offer from BOA.

[justbroke]

Since you are below 32%, you may be below the clip level. I don't know what the levels are.

[Floridagail]

Since you are below 32%, you may be below the clip level. I don't know what the levels are.

One letter we received said you must be above 33% and have a hardship, and no second mortgage to qualify.