Saving Ch13 and delinquent mortgage.

[Pandora]

Thanks for the clarification Des...

Spidge... I hope you can add it and remain in your 13 to a successful completion! Know its got to be very frustrating given you've come this far. Keep us posted and good luck!

[spidge]

Well, I may be toast then as I will no longer receive workers comp checks. Fingers crossed the doctor will release me tomorrow and the company takes ma back. I will still be three months behind on the mortgage so will call attorney after the doctors appointment and go from there.

At this point I don't think I can change to a chapter 7 without loosing the house because I am behind on the house payments, correct? Even with 401k resources I would have to let the house go.

[despritfreya]

Maybe its different with each case....but I didnt think you could add arrears to your Ch. 13 plan once you were already in it. Sort of like if you got new debt

Except that the post petition mortgage delinquency is not "new debt". It all stems from a pre petition obligation. Now, do we routinely add post petition mortgage payments? "No." And. . . when we do, it is usually with approval by the lender's attorney. However, if I were forced to litigate an objection to an amended/modified plan I am sure the reasoning of Garcia would prevail - the Code simply states one can cure "any default".

Des.

[Pandora]

I was under the impression (and was told this by both my attorney and the Trustee) that if we fell behind on our mortgage, even though its outside the plan - our Ch. 13 was in danger of being dismissed because it "technically" still part of our 13 - and the mortgage co. could call the debt.

Maybe its different with each case....but I didnt think you could add arrears to your Ch. 13 plan once you were already in it. Sort of like if you got new debt (i.e., medical) and ended up having to make monthly payments to the drs. It cant be added to your current 13 plan, but if there is room in the plan, you can request an adjustment if needed.

???

[despritfreya]

Could the late payments be added to my plan and the trustee payment increased?

This is a viable option unless court rulings in your district hold otherwise. The Bk Code allows you to cure any default. It does not specify if that default has to be pre or post petition. See In re Garcia 276 B.R. 627, 636 (Bankr. AZ 2002)

“For two reasons, the language of the Code does not support any argument that certain defaults are incurable. First, both (b)(3) and (b)(5) specifically provide for the "curing of any default" (emphasis added). That language certainly implies that all defaults may be cured, not just certain kinds. Indeed, the Ninth Circuit relied on precisely that language to reject an argument that a particular kind of default was incurable under the identical language applicable to Chapter 11 plans, in § 1123(a)(5)(G): 'Section 1123 speaks of `any default'.... The natural reading of these sections is that plans may cure all defaults....' The Fifth and Eleventh Circuits have relied on that language to conclude that postconfirmation defaults may be cured. . .”

Would the trustee require the mortgage be paid through the trustee for the remainder of the ch13 plan?

Only if required by your local rules.

What is the common practice for mortgage companies for ch13 plans to become current on post filing arrears?

As you alluded to, lenders typically agree to a six month cure in a stipulation that resolves a motion for relief from stay.

There are options. Just discuss it with your attny. This is not a big deal and do not touch that 401k unless there is no other alternative.

Des.

[spidge]

I am down to 16 payments in my ch13, but now over 60 days late on my mortgage which is paid outside the BK plan. In five months all the mortgage arrears will be paid in the plan from original filing. I plan to call my attorney but would like to go in with options.
Could the late payments be added to my plan and the trustee payment increased? Would the trustee require the mortgage be paid through the trustee for the remainder of the ch13 plan? Not ideal, but might spread the recovery amount over a longer period.
What is the common practice for mortgage companies for ch13 plans to become current on post filing arrears? I have read they might offer a plan to become current over a 6 month period. This might be more than I can deal with.

Stressed mostly because we are so close to completing the bk and the total amount just isn't that much. Just more than I have now, but I do have a substantial 401k if needed/allowed. The hurtle has been me on workers comp and the little woman not having been paid for two months in the summer. I should be back to work as early as Tuesday and the wife will get paid at the end of August so our income will increase back to normal. We had a large bill that sucked up my summer funds again too, otherwise we would have been OK. Also there was an error on my W/C and I was not able to make the last mortgage payment until now so am holding it until I am advised by the attorney.

Thanks for any advice and shared experience.