Ch 13 about the be discharged, selling my house, and a home loan mod question

[Xenith19]

Hi folks,

Complicated question.

Back in February 2017 I declared Ch 13 to stave off foreclosure because of unpaid mortgage payments amounting to about $14,000.

Later that year I fell behind on the payments again and applied for a HAMP loan mod through the mortgage company, which was granted in I think early 2018.

As of right now, the case is due to be dismissed for non-compliance by the end of the month. Looking at NDC, the total arrearage on the mortgage had about $7100 paid to it, leaving about $7000 outstanding.

Would the HAMP modification have addressed that?

[justbroke]

This is strange. Did the court know that you did a HAMP modification? Was the Trustee still paying the arrears? Are you current with your current lender? Those questions would need to be addressed to begin to form an answer. I simply can't tell from the information provided. The key is in the first two questions and the latter question will address the impact.

[Xenith19]

This is strange. Did the court know that you did a HAMP modification?

No.

Was the Trustee still paying the arrears?

Yes, I think so.

Are you current with your current lender?

Yes.

Those questions would need to be addressed to begin to form an answer. I simply can't tell from the information provided. The key is in the first two questions and the latter question will address the impact.

Of course. All of this is in the context of trying to sell my house. I contacted the lender and asked them the same question, and they essentially just said I was current, and that nothing was excluded from the payoff statement.

[justbroke]

Yes, this is to strange. The Trustee was still making payment to whom? That's the kicker. Unfortunately I can't say what could happen. If you have an otherwise clean title (except for the current mortgage), then a sale shouldn't be prohibitive. But, alas, you are still in an active case so you can't sell it without court permission or the case being closed.

I'd really like to see you work with your attorney on this. The arrears still being paid and the court not having known about the HAMP refinance raises questions. I don't know how a bank would do a MOD in an active Chapter 13 without court/Trustee approval so that is why its strange.

The title of your post reads that you are about to be discharged, but the core of your post reads that you're about to have your case dismissed. One is bad and the other is good. The impact of a dismissed case could be devastating. What non-compliance? Are you missing payments to the Trustee?

And my apologies, Welcome to BKForum.

[Xenith19]

Yes, this is to strange. The Trustee was still making payment to whom? That's the kicker. Unfortunately I can't say what could happen. If you have an otherwise clean title (except for the current mortgage), then a sale shouldn't be prohibitive. But, alas, you are still in an active case so you can't sell it without court permission or the case being closed.

As it happens, the case is about to be dismissed for non-compliance at about the same time as the closing is set for the house. We're going to move the closing to about a week after that date so I can get the dismissal documents. There isn't much left outstanding for the payments. About $5,000 to an unsecured creditor, and I think I can handle that if they come after me.

I'd really like to see you work with your attorney on this. The arrears still being paid and the court not having known about the HAMP refinance raises questions. I don't know how a bank would do a MOD in an active Chapter 13 without court/Trustee approval so that is why its strange.

I wouldn't be here if I could contact my attorney. Guy disappeared into thin air. I've tried to get some guidance from the case administrator.

The title of your post reads that you are about to be discharged, but the core of your post reads that you're about to have your case dismissed. One is bad and the other is good. The impact of a dismissed case could be devastating. What non-compliance? Are you missing payments to the Trustee?

Yes, I'm about 8 months behind on trustee payments because we moved and I couldn't make the payments when my wife lost her job. Meanwhile I was unable to contact my attorney as I said above, and I dropped the ball. I probably could've gotten some accommodation if I could've reached him.

And my apologies, Welcome to BKForum.

Thanks, and thanks for the free advice.

[justbroke]

There isn't much left outstanding for the payments. About $5,000 to an unsecured creditor, and I think I can handle that if they come after me.

Unless you were in a 100% plan, that could mean many creditors come after you. They can personally come after you for any remaining balance, any accrued interest, and any other fees allowed by the underlying credit agreement (e.g. attorney fees and court costs).

I wouldn't be here if I could contact my attorney. Guy disappeared into thin air. I've tried to get some guidance from the case administrator.

These are questions of law so most would send you back to your attorney. As such, I'm unsure if dismissal is best if your so close to discharge.

A dismissal doesn't simply leave you where you are today. A dismissal sets the clock back to when you filed as if nothing happened... then you roll the clock forward to add all the accrued interest, fees and other costs. Hopefully you were at or near the statute of limitations for these debts as they were tolled during the bankruptcy.

Yes, I'm about 8 months behind on trustee payments because we moved and I couldn't make the payments when my wife lost her job. Meanwhile I was unable to contact my attorney as I said above, and I dropped the ball. I probably could've gotten some accommodation if I could've reached him.

Let me address two things. First, whenever a job is lost, or income changes, always reach to your attorney even if you have to sit on their doorstep each day. Hound them with calls and emails until the squeaky wheel gets the oil. Chapter 13s have a design feature that allows modification of the payments.

Second, did you know that for cases that were active during CoVID that you can extend the Chapter 13 another 2 years? You could put it into an abatement/deferment and come back later. There is so much math and what-if scenarios to decide to just let your case be dismissed (which is a bad outcome for credit).

You will need to look at the implications of having the case dismissed. I'm surprised that the lender is letter you sell in an active case as you need court approval for the sale. The case has to be both dismissed AND closed for you to be able to sell.

I am sympathetic to the loss of income and I wish you and your family well.