Mortgage

[Lkg]

Ok i have a question we are in a chapter 13 when my father got sick he paid the arrears of our mortgage. So we don’t owe that any, so will the mortgage company let the court know we don’t owe that or do I let the court know , and will that cause a problem with our chapter 13

[justbroke]

First, welcome to BKForum!

I hate to say this, but this could cause issues if the arrears were in your Chapter 13 Plan. If the plan included arrears then that was used as part of the calculation of disposable monthly income (DMI). The entire purpose of the plan is to pay those arrears over the life of the Chapter 13 and to protect you from any negative treatment from the lender/creditor.

I don't know if the creditor will let the Trustee know. The creditor could just keep accepting the payments that the Trustee is sending. This would likely build up a "suspense" account with the creditor and you'd have credits on your account. The plus side is that if the creditor doesn't tell the Trustee, then these payments will just be applied to your monthly payments (from that suspense) account. The accounting, at the end of your Chapter 13 plan, could be a nightmare because the creditor would have been paid twice for the arrears.

The downside is that if you are not in a 100% plan. If the Chapter 13 Trustee discovers that this expense no longer exists, the Trustee could start treating the plan arrearage payments as DMI and give it to the unsecured creditors. You have technically just wasted money.

Chapter 13 plans can be complex and it is always best to speak with your Chapter 13 attorney before doing anything.

[Lkg]

unfortunely he didn't ask and sent the money on his own , so i can't do any thing now but try and see the best way i can proceed

[justbroke]

This really requires a conversation with your Chapter 13 attorney to see if there is anything that you must do or report.

[despritfreya]

I don't see a real issue with this, assuming the lender has applied the funds to the pre petition arrears (as opposed to post petition payments making you post petition months ahead). Your attorney needs to get a full accounting of the funds paid by dad. He/she needs to make sure they were applied pre petition and, if they were, ask the lender to amend its Proof of Claim to remove the arrears.

Depending upon where you are in the confirmation process, once you have the accounting, either you amend or modify the Plan to remove any funding earmarked for the lender or move that funding to the general unsecured creditors. Also, if the reason you filed Chapter 13 was only related to the mortgage arrears, maybe a conversion or dismissal is in order.

Discuss all options with your attorney.

Des.

[Lkg]

I don't see a real issue with this, assuming the lender has applied the funds to the pre petition arrears (as opposed to post petition payments making you post petition months ahead). Your attorney needs to get a full accounting of the funds paid by dad. He/she needs to make sure they were applied pre petition and, if they were, ask the lender to amend its Proof of Claim to remove the arrears.

Depending upon where you are in the confirmation process, once you have the accounting, either you amend or modify the Plan to remove any funding earmarked for the lender or move that funding to the general unsecured creditors. Also, if the reason you filed Chapter 13 was only related to the mortgage arrears, maybe a conversion or dismissal is in order.

Discuss all options with your attorney.

Des.

Thank I set up a meeting on Thursday to talk to him about this