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New here and in the midst of a ch13 discharge

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    New here and in the midst of a ch13 discharge

    Hi, I'm new here and just wanted to share my ch13 story. I feel like this journey has been a rough flight through stormy skies, the plane has finally landed but it's still moving and there's something in the runway...

    My husband and I just completed a 100% plan for $80k in a ch13 that was filed 12/2018. This included our mortgage and credit cards. Trustee sent a letter to stop payments, a refund was sent, and all we are waiting for is the window of creditor objections to pass. Only a few days to go before Jan 17th deadline and I see on PACER the trustee filed a last minute objection referencing a document our mortgage company filed a year ago regarding a $1200 default. Scroll down if you want to skip story and just see the timeline.


    Our house was included in the bankruptcy due to unpaid mortgage and was being foreclosed on. After filing we went into a second default (I thought mortgage was included in bankruptcy payments but I was supposed to pay it separately), the mortgage company filed a Notice of Withdrawal of Motion to Convert or Dismiss, and the lawyer managed to modify our plan to include the new arrears. While in default, property tax and house insurance also went unpaid so the mortgage company took out lender placed insurance and paid the property tax. This increased the monthly payments another $110. I was pretty ignorant of the new payment amount and found out later I was underpaying to a total of $1700. I paid what the reps told me to pay but they were unaware this was the old amount. This became our third default. I quickly paid it and 6 months later on 11/2021 we received our Notice of Final Cure Payment stating our pre-petition and post-petition mortgage arrears was caught up. However, the company filed a response indicating we were still behind $1200 on post-petition mortgage payments. They included a report going back to 2020 showing the monthly underpayments including a few months of unpaid payments (which I had paid) but for some reason wasn't reflecting all the recent payments. However, they eventually withdrew their Notice of Withdrawal of Motion to Convert or Dismiss and things have been quiet ever since.

    We still have an escrow shortage of $3500. After finally getting house insurance in 2021 I submitted the proof and was told I was due a refund of $2k that I still have not received. I'm also still paying the extra $110 a month which is going towards paying this down. The mortgage company also filed some claims throughout the bankruptcy to have this shortage paid but it remained unpaid. My lawyer told me to keep $3500 in savings to quickly pay the shortage in case this situation is brought up during discharge which I have saved. He told me not to pay it before then because once discharge comes a line is drawn in the sand.

    I already submitted my last mortgage statement and a spreadsheet showing my monthly payments the past few years with confirmation numbers to prove our mortgage is current. Now it's just a waiting game for this to be sorted out. I just find it surprising that it wasn't the mortgage company that brought up an objection but the trustee. Over something that was nothing over a year ago.

    This has been an absolute ugly mess of my own making. I have spent countless moments dreading the mailbox.. dreading that a letter may come saying case was dismissed... or house was being foreclosed on.. or the trustee threatening something... It's a miracle we still have our house. A lot of painful hard lessons regarding money management and simply not being ignorant of finances was learned. I keep detailed records and a budget now so that my kids and I never have to go through this again. I just want this over with now.


    CH13 Timeline:
    Case Filed 12/11/18
    Credit Counseling Certificates Submitted 12/11/18
    341 Meeting 01/09/19
    Certificate of Debtor Education Submitted 04/19/19
    Plan Confirmed 04/22/19
    Motion to Dismiss by Mortgage Company 01/22/20
    Plan Modification Granted 09/02/20
    Notice of Final Cure Mortgage Payment 11/17/21
    Notice of Last Plan Payment Due in 6 Months 04/22/22
    Withdrawal of Motion to Dismiss 05/10/22
    Payoff Letter Received to Cease Payments 11/29/22
    Notice of Completion of Plan Payments 12/16/22
    Refund Received 12/19/22
    Certification in Support of Ch13 Discharge Filed 12/23/22
    Notice of Deadline to File Objections to Debtor's Certification on 01/17/23 12/23/22
    Objection to Debtor's Certification 01/11/23

    If I am reading this correctly, it sounds like you have all your ducks in a row and it just needs to be clarified/sorted out. Maybe the trustee didn't want any loose ends and wanted to make sure everything is as it should be.

    Hang in there and follow your attorney's advice. I hope they get it all settled quickly so the Chapter 13 is in the history books and you can move forward.
    I am not an expert. I just share my experiences in the Wonderful Wacky World of Chapter 13! Filed 3-30-18 Confirmed 7-11-18 Discharged 6-8-22


      shrimps3 - looks like you keep track in a very good, detailed way. IMHO, there is now, 'nothing left to do', except wait, and check in with the attorney if necessary. But: you're done.


        I agree with the others. Hang in there. Accounting with respect to a mortgage that was in arrears is frightening. Due to the way that the banking systems use "suspense" accounts, the use of escrows, and automated fees, a Chapter 13 bankruptcy wreaks havoc on the true balance of the mortgage. A good number of Chapter 13 debtors, that have a mortgage being paid inside the bankruptcy, experience similar issues with the final cure and post-discharge amounts due. It's a pain, but you seem to have good records.
        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

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.


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