Mortgage co. trying to collect fees after Ch. 13 discharge

[JustMe1978]

My mortage is with a smaller mortage company. Throughout my 5 year chapter 13 plan, there were many times fees were added and I'd get post-petitions from the mortgage company's attorney modifying the terms of the plan. My attorney thought they were milking me and said it wasn't illegal but unethical. Not much we could do.

In March, the mortgage company submitted their final cure order, requiring I pay any outstanding fees prior to the court approving my BK discharge. Just to put together the one page form, I was charged 1500 in legal fees. Another example of the crap noted above (my atty said it should have been about $300). But I paid it. And my mortgage payments were up to date.

So imagine my surprise when the month after my discharge, I received a bill from my mort. company for an additional $2300 dollars that, despite numerous phone calls and letters, no one could clearly explain to me where it had come from. It took two months to get an explanation. They said it was for outstanding fees related to the bankruptcy. They sent 4 years worth of acct activity from their financial dept and sure enough, there were mutliple fees added throughout the years that added up to this amount.


I contacted my attorney. He said, per the law, all monies I owed were to be requested in the final cure order. That the mortage co. CAN request fees after the discharge, but they would need to re-open the bankruptcy to do so. They have 6 months to do that but no one has made a move. My atty said he is willing to contact the atty for the mortage company, BUT here is what I'm afraid will happen. Their atty will re-open the case, and then I'll get charged a crap ton of extra atty fees on top of the $2300.

I am SO mad. I was just wondering if anyone else had experienced anything like this and, if so, what you did or what the outcome was.

Thanks.

[Barbisi]

Although I am infinitely unqualified to offer real suggestions about this very unfair situation, I do have a question : did you have arrears where you filed or were you in an active foreclosure? It doesn't seem legal (never mind ethical) that this company could just tack on fee after fee with out some reason. If you were never behind on your mortgage , how could you owe these ungodly fees?
When we filed, we were 100% current, had no arrears , no foreclosure proceedings, no late fees. Should we expect the mortgage company to demand $$$$ for nothing? When this is done , we just want to sell and relocate to a different state.
I wish you well and hope you can avoid having to pay such outrageous fees!
Good Luck JustMe1978!

[justbroke]

This actually happens more times than it doesn't in Chapter 13s with mortgages involved. Specifically happens because many creditor systems, which deal with mortgages, are not geared for how they are paid in a Chapter 13. Those systems end up putting Trustee payments into "suspense" accounts, adding additional fees, and not being 100% in line with the confirmed plan. As you already noticed, your attorney went through the final cure issue with the bank and that was settled. However, the bank's system is still doing the wrong thing.

First, you should have your attorney contact the bank and make a demand just as you stated. The bank would not be allowed to charge fees for doing the wrong thing, despite them "contractually" being allowed. This is an area that your attorney should be able to fight -- if the bank tried to add even more fees. The bank needs to figure out how to fix their system.

Now that I sit and think about it, maybe your attorney should approach it as a violation of the permanent discharge injunction because they're trying to collect fees on something discharged. Whatever the strategy your attorney chooses, I think it at least starts with your attorney demanding and warning the bank that any further attempts to collect would be met with a motion to show cause and for sanctions.

Just my $0.02, and Welcome to BKForum!