Mortgage Late Payment Fees

[diegodog]

Hello All,

How do late payment fees on your mortgage work in a chapter 13? Are they dismissed? Need paid back by the time you file 13? wrapped up in your chapter 13 payments?

Thanks!

[BNKRPTinNC]

In our case all arrears on mortgage were figured into the CH 13 plan.

[justbroke]

How do late payment fees on your mortgage work in a chapter 13? Are they dismissed? Need paid back by the time you file 13? wrapped up in your chapter 13 payments?

If you are keeping the property, they are not dismissed. These need to be paid back by submitting a Plan to cure the default (arrears) over time. You can spread them out over the life of your Plan (36 months to 60 months).

[jade73]

Ours is in with our payments.

[holding on]

My arrearage was put into the plan as a priority claim.

to anyone who has their arrearage in their plan: is the trustee charging interest on the arrearage?

[justbroke]

to anyone who has their arrearage in their plan: is the trustee charging interest on the arrearage?

They aren't allowed to charge interest on arrears unless... and I haven't actually seen any cases... you have equity in the property.

[holding on]

thanks Justbroke. Maybe that info will help the OP also.

Yes, I do have equity in my house property. I've asked my lawyer about this 3 times no less and he keeps coming back with answers that make no sense. What concerns me is that looking at 13datacenter, the arrearage principal will never get paid before the 60 months is up because so much is going to interest.

I'm gonna have to park myself in my lawyer's office and get this straightened out.

[justbroke]

It is confusing on the "interest" on arrears. There was some talk about NOT having to pay interest on arrears if the lender is undersecured. However, there seems to be some rules concerning that the "interest on interest" has to be spelled out in the Mortgage/Mote and underlying State non-bankruptcy law must allow it.

So... it's probably why your lawyer is confused. But this is what I'd do if I were a lawyer. Just submit a plan without the interest on the arrears. If the lender complains, then worry about it. If they don't complain and the plan is confirmed... voila!

[holding on]

So... it's probably why your lawyer is confused. But this is what I'd do if I were a lawyer. Just submit a plan without the interest on the arrears. If the lender complains, then worry about it. If they don't complain and the plan is confirmed... voila!

That's just it...the submitted (and confirmed!) plan never in anyway called for putting interest on the arrearage. This is something the trustee is doing themselves. the plan has been confirmed and operating for 13 months now.