Making mortgage payments while in bK

[justplaintired]

It has been so long since this all started for us. I used to live on BKforum and it was so helpful in so many ways. I am back again cause we did it, we filed!

We Paid our attorney Feb of '08, finally got it filed on June 4th. Our 341 is July 20th. So far things are going well. Chapter 7 no assets, no presumption of abuse. Problem is we intend to keep our house, we have always been current on both mortgage. We knew auto pay would stop. We made a payment to our first mortgage using bill pay thru our bank. It was paid on the same day auto pay would have been taken out. Auto pay went ahead even though we filed 11 days earlier, they claimed someone dropped the ball and didn't get notification to auto pay dept, the problem was i had set up bill pay and both payments came out the same day. We didn't have that much money in the bank, if we would have, we wouldn't be in BK. I won't go into details on how I got that fixed but I did. The bank did give me back one payment and stopped the auto withdraw. The second mortgage stopped my online access, I had it on bill pay also. Made the payment hopefully as go wells with this. I am not sure if will be late or not.

My question is, if it is late due to technical problems for some reason, to no fault of ours, what happens? I got a letter from my first mortgage on where to send payments, that makes it easier. My second mortgage hasn't sent me anything. Citimortgage is the second, Washington Mutual is the first.

Another question is, we had our auto pay set up for the end of the grace period. Are we still able to use that date? Do you still have a grace period during BK?

We want to keep our home. Making the payments isn't too hard, it basically the only bill we have once this is over, other then insurance, utilities.....

Any advice would be great, I imagine it's on here somewhere, but I just can't find it.

jpt

[newbeginning]

jpt,

we're in a similar situation. we have been keeping up with our mortgage, but always pay and take advantage of grace period. no objections and isn't considered late. i would make every attempt to contact your second mortgage company and ask them of your current status and explain the technical issue. it can only help if you are not certain.

congrats on filing!

[Minnymouth]

During the BK process creditors will not even talk to you...... their not supposed too. Everything is handled thru your attorney and the Trustee.
If you plan on keeping your home or auto make sure payments are made before "due date" and in their hands. Forget about the "grace periord", it doesn't really exist during bankruptcy. If your payment is late (past due date) they can start foreclosure if they so desire.
If you do call a creditor about a mortgage payment, ask for their bankruptcy division. They will not discuss your account but will give you an address where you can send you payments too.
On any account if you go past the "due date" - that payment is "late" whether they report it to the creditor bureau or not.....
Paying accounts during the "grace period" is not good for building good credit status....

[justplaintired]

Thanks for the answers. It's very confusing to me. Today I received a statement from the first mortgage saying this is for informational purposes only, but it was like our usual statement. So far citimortgage has sent us nothing, so I don't even know where to send a payment. I did make a payment using bill pay with our bank, and it went thru, so hopefully that is ok. It's going to be tough switching the time of the month we make our payments on the house as all our bills are worked around them. We have always used the grace period. Now I really don't know what to do. I don't want to lose the house and our papers on pacer say we wish to reaffirm. We weren't going to, but if they asked we sure will. The house is alot of why we filed, we knew that it was down to the house or credit cards. The house puts a roof over our heads, the credit cards just kept me awake at night.

[newbeginning]

jpt,

i would speak with the lender about the grace period. i spoke directly with our lender and since we have not been discharged, how us using the grace period affects our credit is of little concern. in fact, even after filing and waiting discharge, our financial situation is still precarious and we would rather risk lower credit than losing the ability to pay any or all of our bills outright. after we are discharged then we will make our payments on time.

once again, i have spoken with our lender and so, know that we are in no trouble of losing our home.

find out from the people who make the decisions.

[Minnymouth]

As I said before, if you pay a bill AFTER the "due date", its LATE, whether there is a "grace period" or not. Most companies will allow a grace period on debts without reporting late payments to the credut bureau. Some will report them anyways.
Making late payments on mortage payments during BK leaves you open for them to start foreclosure if they so desire. If you sign reaffirm papers on your mortgage, auto payment, or any debt you will be RESPONSIBLE FOR THAT DEBT FROM NOW ON. It will not be part of the discharge in BK.
Regarding your reports at the credit bureau...... you BK takes a big hit as far as your credit score score is concerned. Most lenders look closely at your big payments such as mortgage, auto etc. If they show a lot of "late pays" the lenders takes it that your over extended, and cannot make your payments on time, thus are they reluctant to issue any credit to you.
A lot of lenders will "overlook" filing BK (for whatever your reason - medical bills, loss of job, etc) after discharge. Within 2 years you can puchase a new home, auto etc if your credit score shows a good "on time" payment history.
How you pay your bills tells the lender a lot about you and your payment habits. You want your credit score to be as good and clean as it can be starting right after you file BK.....
And during the "credit crunch" that is going on in our Nation, our credit scores are going to matter "even more now".
Banks, credit card companies have suffered "major losses" the in the past by issuing credit to consumers that don't pay or over extend themselves and can't pay. It is playing a major role in whats going on financially in our Nation's financial institutions right now.
So from here on out, probably for quite a while, its going to be VERY HARD to get credit of any kind, unless your "credit report" SHOWS a good payment history.
If you HELP maintian a good history DURING BK on debts that your reaffirm on, then after your discharged your on the road to recovery quickly from your BK.
Anyone who "thinks" their credit report has no bearing on what credit they can get is only fooling themselves.
People with bad credit may still get credit, but they will be paying the highest interest rate they can be charged. Would you like to buy a home and pay a 29.9% interest rate instead of 6.5%???
If your attorney hasn't told you to make "timely" payments during BK, then he should have.
Your Trustee will "dismiss" your Chapter 13 (if that's what you end up in) for making late payments to him...............
Good credit reports have also become part of the "job market".... they are looked at closely by govt offices, high positions in companies, etc. Lots of companies do not want employees with bad credit histories and collection agencies calling, garnishments in payrolls etc. Banks, and other financial instutions consider people with bad payment history as "high risk" employees! Many will not hire anyone with a bad credit report.
You may be an excellent, qualified applicant for a good job, BUT if you have a bad credit report, many companies will not hire you, they will hire another who shows good character, and good responsibile habits with their own financial affairs.
If you can't handle your own financial affairs..............WHY would I want you handling my bookkeeping, my cash flow, or my affairs???

Just a little FOOD FOR THOUGHT!!!

Many of us have "been there, done this"...............

If your going to file BK - let it "work for you, not against you", and you can come out smelling like a rose!!!

[Minnymouth]

RE: Reaffirming

Some lenders will not ask you to sign reaffirm papers, some will.....
If you have a home or auto you plan on keeping, keep your payments current...
IF THEY DON'T ASK YOU TO SIGN REAFFIRM PAPERS, keep paying your monthly payments and THEN IN THE FUTURE you can still "walk away" from the debt if you need too without owing the balance because it was discharged in BK.
IF YOU SIGN reaffirm papers with a lender, then you will ALWAYS be responsible for that debt in the future. Its your guarantee to the lender that you intend to pay that debt in full no matter what.
Most reaffirms are signed before discharge and approved by the Court in some states.