Mortgage Payments & Ch. 13

[cla5]

I am trying to come up with the funds to pay my attorney and put a down payment on a car before filing.

I currently owe for June and July on my mortgage so there will be arrearage included in the 13.

Is it frowned upon to not pay the mortgage for a month or two to get some of the necessities taken care of before filing? If I'm correct, an attorney can't advise you NOT to pay, but just wondering if it's actually ok (as long as all payments are made post-filing on time.

Any advice is appreciated.

[LadyInTheRed]

Where did you hear an attorney can't advise you not to pay? It is true that an attorney can't advise you to incur more debt, but I've never heard that they can't tell you to stop paying existing debt if you are going to file BK.

I bought a new car less than 60 days before filing Chap 13. No questions were asked.

It is very common for people not to pay their mortgage several months before filing Chap 13 because they needed to pay for necessities. Just make sure you will be able to handle a plan payment that includes the arrears while also resuming your regular mortgage payment after filing.

[SMinGA]

It should not be an issue, and might not even be optional. Since you owe for June & July, its possible your lender would not accept payment from you directly unless you were to pay the total amount owed to bring it current including late fees.

Where you might run into an issue is when you have very little DMI. For example, if you're going to propose a plan payment of $200/mo x 60 months then it would be impossible for that to cover an arrears of $15,000. Your plan must pay arrears in full, and certain others things. (Such as atty fees paid in plan, back taxes, car loan if its being paid in the plan.)

[cla5]

I guess I just assumed the attorney wouldn't tell me to not pay the mortgage...don't know where I heard that. I actually started a repayment plan for the mortgage last month so I know they'll accept the payment, but now find it's too high (especially after paying $800 in vehicle repairs and home AC repairs in the last 30 days--that was the final straw. Everything seeming to be getting better and then crash...ugh). I know I have disposable income...just don't know how much yet. I'm just expecting to have to come up with 20% down on some crazy interest bad credit car loan, in addition to $1900 to the attorney...I don't want to pay the mortgage if I can use that to pay the attorney in full now and then next month take the same amount and put the DP on a car. Hope to file at the end of August or beginning of September. I just don't want them to start any proceedings on me because I broke a repayment agreement. Should I and tell the mortgage company I'm working on the paperwork and will be filing soon? Will that usually slow anything down? I don't want to be faced with that since right now I'm not at all worried about foreclosure.

Thanks everyone.

[SMinGA]

First thought: as long as you aren't in a situation where you'll have trouble paying enough into the plan to satisfy arrears if it increases a little - then filing in Sept. may be best since you won't have to worry about the mortgage til Oct. Perhaps 'save' the Sept payment since you'll need to make the first plan payment and next mortgage payment within 30 days of filing?

Other than that, if you will be within ~3 months late when you file in September, it should not be an issue to file then. Research your state's foreclosure process to make sure, but in most cases the lender would not have even begun the process until 6+ months out.

Hope to file at the end of August or beginning of September. I just don't want them to start any proceedings on me because I broke a repayment agreement. Should I and tell the mortgage company I'm working on the paperwork and will be filing soon? Will that usually slow anything down? I don't want to be faced with that since right now I'm not at all worried about foreclosure.

Thanks everyone.

[cla5]

So...mortgage company is calling. Do I tell them I am working on filing a Chapter 13? They say I owe for May, June, & July (there's almost a full payment in partial which hasn't been applied). I agreed to the repayment plan last month but after more above and beyond expenses, I can't pay the agreed upon amount. Plus, as I've stated before, I'd like pay the attorney and a DP on a new used car. Sorry if I'm being a pest...just worrying. My attorney is out of the office today...

[SMinGA]

I think its your call what, if anything, you say to them... If worst case scenario is that you will file in September, it really would not be possible for them to schedule & complete a foreclosure in the next 6 weeks...