Question about Chapter 13 Plan and Mortgage Payment

[momindebt]

One reason we filed bankruptcy was a giant increase in our monthly mortgage payment due to escrow increases (reassessment of our home caused huge spike in taxes). My question is this:

1) In the really long shot that our escrow payment some day goes back down and we get a credit back for the amount we overpaid, will we have to forfeit that check to the trustree?

2) In the really long shot our escrow payment some day goes back down and our monthly mortage payment permanently goes down, will we be required to increase our chapter 13 plan amount? I assumed we'd have to report that to our attorney/trustree. It is a huge long shot but one can wish, right? Thoughts??

[papie]

Realistically, do you expect your payment to go down? If your property has been reassessed and taxes have been increased, unless there's been some kind of mistake, I'm not sure why they would be decreased.

There are too many variables in this to give you an answer. If there was a mistake when your property was reassessed, what the mortgage company decided to do would depend on the policy of the mortgage company. Some companies cut a check, some companies leave it in the escrow account and decrease your monthly mortgage payment. Most banks have a cutoff, where if you've overpaid by X amount they cut a check, but if it's under X amount they just decrease your monthly payment and leave that amount in your escrow account.

If you were behind on your mortgage when you file bk and you are paying arrears every month, it's likely they aren't going to cut a check to you period. You owe them money and they want to keep every penny they get from you. Again, depends on the bank.

It's also possible that filing bk will raise your insurance rates and what you overpaid in the escrow account for taxes would wash out your new higher insurance rate.

Whether or not the trustee would seize the check would depend on how much it is and your trustee. Trustee get to make up some of their own rules.

See all the variables? I'm not even sure this is worth thinking about, to be honest.

We can all dream!

[momindebt]

Yeah, I know there are alot of variables but since the bk forum people are the only ones I can ask, I do. Sometimes one of us has experience with this issue.

Our escrow increase was not an error and we are not in arrears. Sometimes over the years of owning houses, mortgage companies well over estimate what payments to escrow need to be, especially after a change in taxes since they don't have any prior history to know exactly how much school taxes, town taxes, etc. will be after the adjustment and new tax years.

Put simply, do you report any check you get at all back during your chapter 13 for any reason? The only thing I saw were inheritance checks-and we aren't anticipating any of those anytime, well, ever. Since we don't owe the mortgage company anything, I can't imagine they'd be allowed to "keep" our money if we had money owed back, although I'm sure they could legally apply it to our future mortgage payments since we are in bk....I know that if something you put in your budget goes up, your payment doesn't change and you just have to find the money with few exceptions. What about the reverse? If something in your budget goes down expense wise, does your monthly payment go up? Anyone have experience in this area?

[Flamingo]

Yeah, I know there are alot of variables but since the bk forum people are the only ones I can ask, I do. Sometimes one of us has experience with this issue.

Our escrow increase was not an error and we are not in arrears. Sometimes over the years of owning houses, mortgage companies well over estimate what payments to escrow need to be, especially after a change in taxes since they don't have any prior history to know exactly how much school taxes, town taxes, etc. will be after the adjustment and new tax years.

Put simply, do you report any check you get at all back during your chapter 13 for any reason? The only thing I saw were inheritance checks-and we aren't anticipating any of those anytime, well, ever. Since we don't owe the mortgage company anything, I can't imagine they'd be allowed to "keep" our money if we had money owed back, although I'm sure they could legally apply it to our future mortgage payments since we are in bk....I know that if something you put in your budget goes up, your payment doesn't change and you just have to find the money with few exceptions. What about the reverse? If something in your budget goes down expense wise, does your monthly payment go up? Anyone have experience in this area?

Your Chapter 13 plan is based on your financial information the day you file. If your mortgage payment increases after that time due to your mortgage company increasing your escrow to offset a shortage or if it anticipates a rise in your house insurance or taxes, that is your responsibility. If there is an overpayment, what the mortgage company does is decrease your mortgage payments after the next review period (your mortgage company reviews your escrow account yearly and adjusts your payments accordingly). The best thing to do as to any financial fluctuations after your filing date is not play guessing games but contact one's attorney inasmuch as making the wrong guesses can end up having one's plan dismissed.