back to "Bankruptcy" main page

 Information to Homeowners in Chapter 13

As you know, you will continue to make direct mortgage payments each month to your mortgage company. Your Chapter 13 payments will cure your mortgage arrearage as of the date of filing; part of your obligation under Chapter 13 is to keep current with your mortgage payments from this point forward.

What happens if I miss one or more post-petition mortgage payments?

If you should fall behind on mortgage payments post petition (i.e. after you file your Chapter 13), you will be in jeopardy of losing your home. As soon as you realize that you will miss a payment, call our office. Often, if your missed payment is the result of something unexpected (such as an injury or temporary job loss), we can negotiate with your mortgage company before your delinquency becomes serious.

If you should fall behind your post petition payments for two or three months, both you and our firm will usually (although not always) receive a letter from the mortgage company or its attorneys. Again if you should receive such a letter from your mortgage company, please call us as the earlier we negotiate, the better.

If you should fall behind more than two or three months, your mortgage company will likely file a “Motion for Relief from Stay.” This means that they are asking the Bankruptcy Judge to lift the automatic Bankruptcy Stay so that they may begin foreclosure proceedings.

In many cases we can negotiate with your mortgage company prior to the court date to allow you to catch up your post petition payments over the next several months. Otherwise, we may need to argue your case before the Bankruptcy Judge.
 

What if there is a dispute between my mortgage company and me with regard to payments that I sent in?

It has been our experience that mortgage companies sometimes make mistakes and fail to properly credit money received. In a dispute with a mortgage company over payments received, the Judge will expect you to have proof of all payments at issue. You can protect yourself by doing the following:

• always include your name and account number on any check or money order sent to the mortgage company;
  

• pay by check or other traceable instrument if at all possible; Note that money orders are very difficult to trace if they are lost in the mail;
  

• always make a photocopy of your check or money order;
  

• if your mortgage company has a local office, pay in person and get a receipt;
  

• if you pay by check, save your cancelled checks;
  

• call your mortgage company every few months to make sure that you are current;
  

• if you are not sure where to send your payment, call your mortgage company or your lawyer’s office;
  

What happens if I want to surrender my house?

You always have the right to surrender your home while in Chapter 13 to be free of your mortgage obligations. Deficiency claims by mortgage holders in Georgia are rare so it is unlikely you would owe any money to the mortgage company if you surrendered your home. If you choose to surrender your home, call our office and we can make arrangements. In some cases, your Chapter 13 plan payment can be adjusted to reflect the absence of a mortgage obligation.