1st mortgage payment durring a ch13.

[spidge]

The reason that Trustees don't like you to use the grace period on mortgage payments, when you're under a Chapter 13 Plan Re-organization, is because that is specifically what gets most debtors in trouble!

I agree and it should be avoided, but the wifey gets paid the last business day of the month and it would be nice to not have to pay for next day letters ($13.25) and a cashiers check ($5). We have been confirmed and the confirmation was that same afternoon. We did appear at the 341 that was done by the trustee's representative and once we were sworn in I don't think the clock even moved to the next minute before we were done. The judge had already looked at our lien strip to verify it. We turned in the trustee payment before being sworn in and made the next payment the next day. We are ahead 3 weeks ahead on it, woooo whooo.

[spidge]

I found out at the hearing that ACH (automatic bank transfer) is an option for paying the trustee payment and I am going to choose that method.

This is a scheduled withdrawal that comes out the same day every month, but is there a way to pay them dirrectly when ever you want?

[RunningMan]

This is a scheduled withdrawal that comes out the same day every month, but is there a way to pay them dirrectly when ever you want?

There are only three options, cashiers check mailed to the PO Box, payroll deduction, or ACH. Our payment will be due on the 7th of every month, but he said the ACH payment would not hit the bank account until the 20th because of the way they have to schedule it.

[momindebt]

In our county paying your mortgage before the 1st of the month was stressed considerably by the trustee to us at our 341 meeting. She indicated that this was the case because some mortgage companies are now charging fees if it isn't received by the 1st of the month, regardless of the "grace period", and that they don't tell you about this. She reported that she had more than one consumer who ended up owing thousands more at the end of their mortgage due solely to this. She also said that many companies specifically seek out bankruptcy candidates and buy their loans-all with higher fees and different terms at times. We were told that we would be moved to a specific department of our mortgage company as well, so it clearly looked like different rules would apply to us (ie: more stringent)-and this is with us never having a late payment.

[shark66]

Our mortgage company still honors the "grace period", no problems there.

That said, they're a fairly small (regional) bank and have been pretty good to us over the last seven years...we've gotten a lot more understanding than any of the "big boys" have shown to our neighbors...

My experience only.

Good luck.

[walkthaplank]

In our county paying your mortgage before the 1st of the month was stressed considerably by the trustee to us at our 341 meeting. She indicated that this was the case because some mortgage companies are now charging fees if it isn't received by the 1st of the month, regardless of the "grace period", and that they don't tell you about this. She reported that she had more than one consumer who ended up owing thousands more at the end of their mortgage due solely to this. She also said that many companies specifically seek out bankruptcy candidates and buy their loans-all with higher fees and different terms at times. We were told that we would be moved to a specific department of our mortgage company as well, so it clearly looked like different rules would apply to us (ie: more stringent)-and this is with us never having a late payment.

Any grace period is written into the loan agreement. A bank can't just stop honoring part of the contract, nor can they change it unilaterally. Filing bankruptcy does not change what is in the contract unless the judge changes or invalidates portions of it.

[justbroke]

True on the grace part, but the Trustee can force you to pay on the due date, not the grace period, as a condition of the protection of the Chapter 13 bankruptcy. This is precisely the language they use to enforce such actions.

The Trustee depends on language in 11 USC 1302(b)(5) which states that the Trustee has a duty to "ensure that the debtor commences making timely payments under section 1326 of this title". This is also the language that Trustees have leveraged to force payroll deductions (wage orders) to support the Chapter 13 plan. (There is an intersection with the Debtor's duties in 11 USC 541 as well... to comply with the Trustee's orders.)

In any event, being in a Chapter 13 does affect what you would "normally" think is okay. The grace period is a serious problem since it usually causes serious trouble in the majority of cases. I'm willing to guess that over 50% of those who get behind in mortgage payments, ended up that way by using the grace period as the actual payment date.

FYI, the judge can't modify any terms in a mortgage/note that is secured by a primary residence (anti-modification in 1322). But this isn't a modification or terms issue. This is a... we'll protect you from your creditors, if you comply with the terms of the Trustee and bankruptcy code.

At least, that's my opinion of it and based on case history, the majority view.

[momindebt]

Yep, exactly what I meant justbroke...the terms of the mortgage do not change but we're told by attorney and others who have filed bankruptcy that we were expected to pay before the 1st or we'd incur additional fees and could get in trouble with our trustee.

[justbroke]

Yes indeed. I just went further to show where the Trustee gets that power.

[BigJohn]

In our county paying your mortgage before the 1st of the month was stressed considerably by the trustee to us at our 341 meeting. She indicated that this was the case because some mortgage companies are now charging fees if it isn't received by the 1st of the month, regardless of the "grace period", and that they don't tell you about this. She reported that she had more than one consumer who ended up owing thousands more at the end of their mortgage due solely to this. She also said that many companies specifically seek out bankruptcy candidates and buy their loans-all with higher fees and different terms at times. We were told that we would be moved to a specific department of our mortgage company as well, so it clearly looked like different rules would apply to us (ie: more stringent)-and this is with us never having a late payment.

I suspect our mortgage holder is playing that very same trick. I got two letters from them stating they are going to send me info stating where the extra money I sent them went but so far I haven't heard a peep.

I spoke with my lawyer about the matter (unexplainable shortage in our escrow account). He said I can take them to small claims court.

[spidge]

Well it looks like it best to just muddle through until April when I can pay the trustee and mortgage three weeks ahead. This would at minimum help us avoid the next day fees on the mortgage. A simple registered or signed for letter should do the job for a fraction of the cost.

Now if I could just get my wife to quit wrecking the cars. Where to find the money for a deductable.Sob,sob.

1 step forward and three back, AGAIN!!!