loan modification during active ch 13

[erminia]

Does anyone have experience with getting a loan modification during chapter 13?

We received a loan modification offer in the mail days after we filed chapter 13. We didn't take the offer because we had already filed two days before. We would like to take the offer now but Wells Fargo says that the offer is off the table because we're in active BK.
Taking the offer would save us $80 dollars per month on the mortgage payment and $270 on our trustee payment according to our lawyer.

[dlinid]

I have received a mod during my chapter 13. Help for homeowners is still available, and there is a finance department in your state that you can go to. Tell you dept of finance that you were turned down by WF because you are in a BK. Also, you will need to get a letter from your lawyer sent to WF so you can speak to WF about a mod. Then you will need to get the judge to do a ruling that you are allowed to do the mod, this has to be ok with your trustee as well. It can be done! It took me 18 months and three tries, but if you want it bad enough you may be able to do it. Call WF and ask for the BK dept, tell them you still want to do the mod and that without it, it will be a hardship and may tip you out of your BK is they do not agree to the mod. Good luck and stay in touch.

[justbroke]

I don't know how that math works. You'd save $80 on the payment but $270 on the Trustee payment? The only way I can think that you'd get $270 back on the "expense" side (meaning that you get to keep each month) is that a.) you were in arrears on your mortgage when you filed, and you were paying the arrears in plan, and b.) you had a negative "disposable monthly income" (DMI) when you went into the Chapter 13. If that latter is true (b), then that was probably a plan that was going to fail, eventually, anyhow.

I don't know how you can go $270/month in the hole each month in a Chapter 13.

[jennhalcyon]

We couldn't get Wells to take us seriously about a loan mod until we were in BK! Get the letter from your lawyer first and foremost, because you can't do anything else with them until you do. Then you can try to resubmit all of your paperwork. I learned that the magic number is between $0 and $100 left over after expenses, including trustee payment. Submit all of your paperwork, hopefully falling in that range, and hopefully you will have a positive outcome. We were finally approved for an in-house loan mod which reduced our payment by over $350/month.

[erminia]

We received a call back from Wells Fargo saying that they were INCORRECT. Never thought I would receive a phone call like that! Our lawyer filed a motion asking that we be allowed to accept the offered mod. Wells Fargo called to say they were wrong and that once the court approves it they will send new mod paper work that we can sign. To the answer above we were in arrears on our mortgage when we filed, and we were paying the arrears in the plan. Once the mod is signed and in effect our trustee payments should lower by $270 (according to our lawyer).

[jennhalcyon]

Erminia, I'm glad Wells is working with you! Are you converting to Ch 7? I hope so, because if your trustee payment was $270 for arrearages (which will be capitalized into your loan mod) and your mortgage is reduced by $80 per month, your trustee is going to see that as an additional $350 per month that can go to your unsecured creditors! You should discuss this with your lawyer, because you either need to convert if you qualify or somehow amend your schedules to show that the full $350 isn't truly disposable income.

[erminia]

loan modification during active ch 13

That's a good question. I would like to convert to a 7 but we've been told that to keep our car we would have to pay $4000. That would be the amount that we would have paid to our creditors in the 13. Not sure where we would get the money to do that.

[Pandora]

..Once the mod is signed and in effect our trustee payments should lower by $270 (according to our lawyer).

That's a good question. I would like to convert to a 7 but we've been told that to keep our car we would have to pay $4000. That would be the amount that we would have paid to our creditors in the 13. Not sure where we would get the money to do that.

If you're already negative and have no DMI to fund a Ch. 13 plan (http://www.bkforum.com/showthread.ph...935#post508935) - how is your plan decreasing by $270? If your mortgage mod lowers your mortgage - then your unsecured creditors would get more - not less. As it stands according to your posts you are at 0% to unsecureds, your paperwork shows you have an additional $400 a month in income which you do not have, and are merely doing a Ch. 13 to save your car essentially, is this correct?

Am I misreading / interpreting what was written? If you do not have the money to fund a 13, then your lawyer shouldnt be pushing it through due to a temporary job your husband no longer has. You will not get confirmed if you cannot feasibly fund your plan. Never file Ch. 13 to save a car. As HHM posted previously to you - you cannot afford the home since its taking up so much of your income a month.

Check into converting to a 7 and finding a cheaper place to live. You may be able to keep your car vs. paying for it - what is MO's auto exemption and are there any wild cards you can use?