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Trustee filed motion to dismiss case

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  • Trustee filed motion to dismiss case

    We filed for Bankruptcy in July 2012. We're 58 months into our payment plan and we encountered a situation where our account did not have sufficient funds to pay our mortgage. Long story short, I pay at the end of each month manually part of our required payment. This past month moved over to a new payment system that apparently takes 5 business days before the funds will reach the Trustee. Not complaining about this. It is what it is. Due to various circumstances we've had to short our payment from time to time over the course of the last five years. This adds up to us being about $3500 in arrears. We've paid in $162K so far. Waiting to speak with our lawyer about our options (he's available tomorrow afternoon) but in the meantime I am wondering what to expect? We just received approval to refi our home and we plan to close on that this month. Because of this, our normal $2100 mortgage payment that our trustee pays will not be due. Our new mortgage's first payment is not until August 1st. Theoretically, can't we ask to have that $2100 that the trustee is set to collect this month to go to our arrears? If so, would that not be seen as a genuine attempt to make things right to the point where the case will not be dismissed?

    With that said, even if I had stayed up on payments the total amount that we would have paid in to date is $166K. When I look at our case on the NDC website it shows a plan base of $174,900. We were only paying about $850 above our mortgage payment. That adds up to having to pay for another 10 months. Is that even a possibility? FYI, the remaining amount due to those that filed a claim are strictly unsecured debt held by collection agencies.

    Thank you in advance for any replies.

  • #2
    Well, this surely is really complex and mortgage arrears compounded with post-petition shortages can lead to a serious headache trying to figure it all out. As you may realize, you must be fully caught up and not in any post-petition arrearage when you head to discharge. It just makes many things too complex and could open up the possibility of foreclosure right after discharge. (It looks like you won't have the Chapter 13 discharge nightmare scenario as you've taken steps to refinance.)

    As for how to apply payments to whom and when is a question only your Trustee and attorney can answer since they are intimate with the financial details of your case (and your District). No one wants you to fail and I'm sure they'll come up with something. I really don't understand how you're $8K short on your base plan; that will also need to be addressed.

    (The $3,500 caused by shorting payments over 5-years could come back to haunt you. While the creditor typically can't charge late fees during this period, it reads as though you pay direct. This may have generated some issues on the lender-side that will need to be reconciled. It's never a fun thing reconciling shortages, late payments, and accrued fees at the end of a Chapter 13. This will take time and work to reconcile.)
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      Sorry for not being clear. Our current mortgage arrears have been paid and this past month's payment to them was about $300 short. We however have our current payoff and will be closing on a refinance with another lender (my wife's employer) this month. So this existing lender (Bayview Loan Servicing which is the armpit of mortgage lending) will be out of the picture as soon as this week. Because we are refinancing, our normal payment due on July 1st will not be due. The first payment due is August 1st. We are essentially skipping a mortgage payment per say however the money being paid into our bankruptcy will still include the normal mortgage payment this month. I cannot see why the Trustee would not apply that $2100 to our arrears. Our new mortgage will be paid outside of our bankruptcy. If all works out, we would be about $1400 in arrears. Hoping the Trustee will work with us given our attempt to bring our account current.

      Thanks for the quick reply.

      Comment


      • #4
        Well, hopefully the Trustee knows everything about this transaction and that a mortgage payment is skipped. Otherwise they may pay the current lender the regular payment. I don't know how you're in arrears, and that is what concerns me.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


        • #5
          Originally posted by N2racin29 View Post
          ......... (Bayview Loan Servicing which is the armpit of mortgage lending)............
          x2. Dropped them like a hot potato when I was able to refinance.

          Filed 11/10/08

          Discharged 2/18/14

          Comment


          • #6
            Just an update. Turns out some simple issues such as a change in the Trustee's Payment address along with a change in the system that is used to manually pay the trustee led to a number of payments not getting posted to our plan. In May, this resulted in not having enough funds for the trustee to pay our mortgage. But because we were in the middle of refinancing and because we had a payoff which occurred a couple of weeks ago, this shorted payment did not matter since Bayview is now paid in full.

            I had to work with my Payroll dept who in-turn works with ADP in order to get checks re-issued to the correct Trustee address. All of that is now in motion. Couple that with the extra money that I paid into our plan (it would have normally gone to our mortgage payment but since we refinanced it can go to our other claims) I am expected to be complete with our payments by the end of this month!

            The trustee has removed the motion to dismiss and all appears to be moving in the right direction!

            Comment


            • #7
              Congratulations!

              Comment


              • #8
                Congratulations..i'm glad it all worked out. Nothing like problems right at the end.
                Filed Chapter 13 - 07/20/12
                Discharged 8/2/16

                Comment


                • #9
                  Yes! Back on track! Congrats!
                  Discharge date: October 2017 (will it ever get here?)

                  Comment

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