Question about payments to secureds?

Hi All,

We know to pay the trustee on time every time. Is there a grace period for paying your secured debts outside of the plan? The mortgage, cars, etc. If the mortgage is due on the 1st and we pay on the 5th will the mortgage company gripe to the trustee? If the cars are due on the 15th and we pay on the 22nd will they gripe to the trustee? Any answers will be greatly appreciated.

Thanks.

When in plan, you must pay on time. The creditors can complain to the Trustee, and then you're toast.

Make it your goal to pay on time, every time. The grace period helps get us into this mess. Then you rob Peter to pay Paul. Maybe once and they won't complain, but make it a habit and it is bound to get back to the trustee.

Hi justbroke,

Just wondering about the grace period for the mortgage. Our statements say that payment is due on the 1st and there is no penalty until the 15th. If we pay on the 5th will they gripe to the trustee? Does the grace period vanish in a 13?

Thanks.

Hi justbroke,

Just wondering about the grace period for the mortgage. Our statements say that payment is due on the 1st and there is no penalty until the 15th. If we pay on the 5th will they gripe to the trustee? Does the grace period vanish in a 13?

Thanks.When you are in Bankruptcy... there is no real grace period. Having wrote that, it just depends. If you miss that grace period once, or get close to the 15th... the lender may complain.

That's all. Nothing else.

Where in your mortgage contract does it state that if you enter into a Chapter 13 BK, that you no longer are entitled to a grace period?

The Trustee told the entire room at our 341 that if you are paying your mortgage outside the plan, to pay it on the due date. No grace period.

Where in your mortgage contract does it state that if you enter into a Chapter 13 BK, that you no longer are entitled to a grace period?It has absolutely nothing to do with your mortgage contract, once you're in a Chapter 13. It is a term of your Chatper 13 to pay all creditors on-time... grace period or not.

Most Trustees don't consider paying within the grace period, to be paying on-time.

I found and old post from Moderator Flamingo, that the grace period is in the note, in or out of a Ch.13. I will send my attorney an email and ask him about it, lets see what he responds with. But if my trustee is like Chloe's and they say specifically say, pay it on time, no grace period, then I guess I am SOL.

I found and old post from Moderator Flamingo, that the grace period is in the note, in or out of a Ch.13. I will send my attorney an email and ask him about it, lets see what he responds with. But if my trustee is like Chloe's and they say specifically say, pay it on time, no grace period, then I guess I am SOL.You are correct that the note/mortgage contains a provision, usually, regarding the grace period.

However, in a Chapter 13, you are bound by the Order of Confirmation and the specific local rules. Let me show you how simply a Trustee can mess with you on this.

Many folks don't know that they must do whatever the Trustee says to do. If you don't do it, the Trustee files a motion to dismiss on the grounds that you failed to follow an order of the court. That simple.

Of course, your mileage will vary and the Trustee's all behave differently on this topic and other topics.

So, how would the trustee find out if you did not on the 1st? Is someone at the mortgage company actually sitting there waiting for your payment to show up on the 2nd instead of the 1st, and then they immediately call the Trustee and cry foul?? If this happened to me, I would have my case dismissed, the creditors would sue and garnish my check, and I wouldnt be able to pay the mortgage anymore, and the lender would then, have another foreclosure on their books. I dont see how it is beneficial for anyone.

So, how would the trustee find out if you did not on the 1st? Is someone at the mortgage company actually sitting there waiting for your payment to show up on the 2nd instead of the 1st, and then they immediately call the Trustee and cry foul?? If this happened to me, I would have my case dismissed, the creditors would sue and garnish my check, and I wouldnt be able to pay the mortgage anymore, and the lender would then, have another foreclosure on their books. I dont see how it is beneficial for anyone.It's counterintuive, yes indeed.

I don't think there is someone there waiting for you to pay late. However, late payments are monitored by all creditors. For example, I paid my electricity late and they called and told me if I did it again, they'd add a sizeable deposit. :)

The Trustee's job, of course, is to get you to pay your debts, so I understand their position. You are usnig the full equittable power of the Court to force creditors on your (plan's) terms.

Will a creditor wait until 12:01AM the day after your payment is due? Highly unlikely.

If you continually pay "late" (although within the grace period) will the creditor tell on you? Probably not, but it is within their power.

No matter what... you don't want the Trustee hearing about it.

Now, as for the personal part, and not thinking like a lawyer... I don't think you have anything to worry about if you're always paying before the grace period end. You do not want to miss the payment.

Wow, I actually got an answer from one of the Trustee's here in my county, surprising.

They said that the trustee doesnt really care, it would only become an issue if I pay it lat enough that the mortgage company would file a motion to lift the stay.

I was worried about this issue, because I usually always pay on the 5th of the month, not the 1st.

I agree with your Trustee's assessment. (Some of them are not so nice.) But anyhow, unless the creditor (lender) is upset, the Trustee shouldn't even care.

Like, when I went for confirmation, my first three payments to the lender were all messed up (because I was surrendering, then changed my mind). I talked to the lender's attorney, made an agreement to handle it as post-petition arrearages, then told the Trustee. No problems! :)

Thankfully, I am lucky, lets hope that the other one is the same, there are two that cover my county, I couldnt get in touch with the second one.

Hey Justbroke,

I have an off topic question for you, what is the Monthly Adequate Protection Payments stuff all about with secured loans within the plan, for a car loan specifically.

How are these determined?

Thankfully, I am lucky, lets hope that the other one is the same, there are two that cover my county, I couldnt get in touch with the second one.

Hey Justbroke,

I have an off topic question for you, what is the Monthly Adequate Protection Payments stuff all about with secured loans within the plan, for a car loan specifically.

How are these determined?usually you don't even need to deal with these. Sometimes, having a Plan is enough "adequate protection".

I dont' even think people use the adequate protection payments so much. It was just to make sure that the value of the collateral didn't depreciate faster than the payments. This was so that the creditor didn't keep losing value in the collateral.

For example. Say you propose a plan to pay your car off. It's value is $5K. So you pay $5K within the 60 month plan. However, you decide to pay the whole $5K in a lump sum (pro rata) in month 59. (Just saying that for argument's sake... and nothing prevents you from proposing such!!!)

The lender could complain that the value of the collateral will continue to shrink during the plan. If you fail your plan, then the lender would have even less value, because you weren't contributing "adequate" payments during the plan.

Hence, the term Adequate Protection.

So, using the same example, say the value of the car decreased $30/month over 60 months (or $3K). You could propose to pay $30/month for the first 59 months and then pay the rest in month 60. That would be "adequate protection".

I've never seen anyone use these adequate protection payments. Generally, the lawyers will propose mostly even payments spread over the term.

Good, hopefully that will be the case with mine, as adding them in would increase my plan payment or length, of which both I do not want to pursue.