M is for Mortgage Arrears in the Bankruptcy Alphabet. Today, I’m talking mostly about Chapter 13 cases where folks want to save their home from foreclosure.
Let’s say that you’re 6 months behind on your mortgage, and you’re facing a potential sheriff’s sale.
You’ve got two choices. You can apply for a mortgage modification through your mortgage company. But good luck with that: you stand only about a 10 to 15 per cent chance of success. And some mortgage companies simply refuse to modify their mortgage loans (do the words “Wells Fargo” mean anything to you?) (or how about “Household Mortgage”?). Like I said, good luck with that!
Or your other choice is to simply cut to the chase and stop the foreclosure process for good: you file a Chapter 13 bankruptcy petition. The “automatic stay” of the Bankruptcy Court brings the foreclosure to a screeching halt.
When I meet with new clients, I need to know the exact amount of their monthly mortgage payment (bring me a recent statement, if you have one). I also like to get a “reinstatement amount”, which you can obtain by calling the mortgage company. This is the precise amount of money needed to catch up on your mortgage. It might take 2 or 3 days to get an exact reinstatement, but it can help me.
With a Chapter 13 case, I need to know a few other matters, such as car loans and tax debt and credit card debt. If the mortgage numbers are usually the most important to determine. Once I have these figures, I can calculate with pretty good accuracy the amount of your Chapter 13 plan payment.
Can we fight these mortgage arrears? Sure, these reinstatement amounts are often filled with unnecessary costs and sometimes just plain math errors. After a Chapter 13 case is filed, the creditors are asked to submit “proofs of claim” to the Court, which are itemizations of the debts owed. Often, mortgage companies submit proofs of claim with inflated arrears amounts.
You have the opportunity to contest these amounts and ultimately to reduce your overall payment.
In any event, a Chapter 13 filing can be for many people the best option to save their home from foreclosure.
Here’s another mortgage modification article to think about.
More on the Bankruptcy Alphabet to follow:
Mortgage Arrears in Bankruptcy Court from Pittsburgh Bankruptcy Attorney Shawn N. Wright at http://www.pittsburgh-bankruptcy-law.com/blog/bid/121989/M-is-for-Mortgage-Arrears-in-Bankruptcy-Court
Means Test from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/15/bankruptcy-alphabet-m-is-for-means-test.aspx
Means Test New York Bankruptcy Attorney, Jay S. Fleischman at http://www.consumerhelpcentral.com/m-is-for-means-test/
Meeting of Creditors from Colorado Springs Bankruptcy Attorney, Bob Doig at http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-m-for-meeting-of-creditors/
Modify from Northern California Bankruptcy Attorney, Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-m-for-modify/
Monthly Income from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-m-is-for-monthly-income.html
Mortgage Arrears from Hawaii Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/m-is-for-mortgage-arrears/
Mistakes from Cleveland Area Bankruptcy Attorney, Bill Balena at http://ohiobankruptcysource.com/m-for-mistakes/
Marriage from San Francisco Bankruptcy Attorney, Jeff Curl at http://www.jclawgroup.com/blog/bankruptcy-alphabet-m-is-for-marriage/
Median Income: Above or Below, Does it Matter? from Los Angeles Bankruptcy Attorney, Mark J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/02/median-income-bankruptcy/
Members of Household from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/797
Mortgages and Bankruptcy from Taylor Michigan Bankruptcy Attorney, Christopher McAvoy at http://downriverbankruptcy.com/mortgages-bankruptcy#axzz1mvwM75xF
Means Test from Marin County Bankruptcy Attorney, Catherine Eranthe at http://marin-bankruptcy-law.com/668/m-is-for-means-test/
Median Income from Linonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/medianincome/