chapter 13 dismissal

[worried]

Hi all...

I received a notice and motion to dismiss from the trustee. It says I failed to file an amended plan to include post petition mortgage arrears. I only have until December 2012 to finish a 55 month plan. I want it extended to 60 months which would take me through May 2013 but I need to fund 8500 in that time frame. Trustee says I need to object or request a hearing before October 24. I am current with trustee payments and never missed one in 4 years. What do you think will happen at the hearing. My family can help me and I have taxes coming which could amount to 3 or 4 thousand but not until December and January. Would the trustee allow me to also fund the plan with a second job. And will I be able to pay lump sums or does it need to be monthly? I really would like to finish the plan and save my home. My daughter lives with me so could I offer more rent from her. Oh one more thing I have a USDA rural Development Direct loan. I want to know why they have not offered me a Making Home Affordable Modification which they just participated in? Thanks for all your help.

[flowerchild]

Hi Worried, sorry to hear about this. What happened post petition that your mortgage went into arrears? Your budget was supposed to be set to include the payment of your mortgage as well as all other required expenses. I used the words "supposed to be set" lightly because there were some times during my case that I thought that I wouldn't make it.

Secondly, where is your attorney in all of this? Your attorney should be on this asap guiding you on what your options are.

[worried]

According to his paralegal he is trying to work with mortgage company but I have not heard from him in a week. Also I owe him money yet and don't want to convert to a chapter 7. My mortgage company is very hard to work with and they are not a regular bank. They are a government USDA direct loan and I think they don't participate in any modifications. My take home pay has been lowered in the past year and expenses have increased greatly. I think the only option is to get more income into the household to save the house. I just don't know if they will allow it now.

[worried]

Do you think it would help if i got a second job quickly until the plan is finished? I don't really want one if it won't help me stay in the plan. Do you think the court will accept that? Thanks

[despritfreya]

Worried,

I really don’t understand this. Why would the Trustee file a MTD due to failure to modify the Plan to include post petition arrears. If you missed mortgage payments, post petition, that is between you and the lender. The lender would have filed a Motion to Lift the Stay, you would have responded and, typically, to resolve the issue, you would have entered into a catch up arrangement with the lender. This is not usually a Plan issue unless, 1) you were under a Court Order to modify the Plan to include the post petition default; 2) you stipulated with the lender that you would modify the Plan to include the post petition default; or 3) your Plan payments included the post petition mortgage payments which would then be paid by the Trustee to the lender.

Can you elaborate as to why you are being required to cure the post petition mortgage default through a modified Chapter 13 Plan?

Thanks,

Des.

[worried]

Hi Des...the stipulation was to come up with 4000.00 on June 1st and the rest was to be included in the modified plan but they did not file the rest of the claim till a month ago. I don't know why my lawyer waited this long to amend it. I think he is trying to get the lender to drop some of the arrears. I suppose I'll hear from him this week. I think I wont be able to finish because I would have to fund the 8500.00 in the next 7 months which might me impossible without more money coming in. If I convert to chapter 7 would I have to include my lawyers fees in the BK7 as a creditor or are those handled another way? Thanks for all your help.

[despritfreya]

Worried,

Don't think the conversion route just yet. You have worked long and hard over these past years to fulfill your obligation under the Plan. Let your attny try to work it out with the lender and the Trustee.

In answer to your question. . . If you convert all debt incurred from the day you filed your 13 to the day you convert would be added to the Chapter 7. This would include all post petition legal fees that you have not paid.

Des.