I’ve Fallen Behind On My Mortgage Payments In Chapter 13 Bankruptcy, Now What?

September 15th, 2010 by Reed Allmand

I’ve Fallen Behind On My Mortgage Payments In Chapter 13 Bankruptcy, Now What?Falling behind on your mortgage payments in Chapter 13 bankruptcy can create a series of events that lead to foreclosure. 

  1. After the Chapter 13 bankruptcy debtor has failed to pay their mortgage for about 2 to 3 months, the mortgage company’s attorney will send a letter giving them the opportunity to catch up on their payments.
  2. If the bankruptcy debtor fails to immediately catch up on their payments, the mortgage company will file what’s called a “motion for relief.”  The motion for relief basically is a request from the creditor that the bankruptcy trustee lift the automatic stay protection and allow them to foreclose on the property.
  3. Once the motion for relief is filed, the debtor’s bankruptcy attorney will most likely suggest that the debtor settle the issue with the mortgage lender by agreeing to catch up on their payments over the course of 6 to 8 months plus pay the filing costs and attorney fees associated with the motion for relief.  This will usually cost the debtor about $600 to $800 dollars and that’s in addition to the delinquent mortgage payments they must make.
  4. If the bankruptcy debtor decides against settling the issue with the mortgage company and the issue comes before the bankruptcy trustee, there is a possibility that the trustee will grant the creditors request.  If the creditor’s motion for relief is granted they will have the right to foreclose on the property and collect attorney’s fees despite the debtor’s bankruptcy status.

Debtors who fall behind on their mortgage payments in Chapter 13 bankruptcy need to contact their bankruptcy attorney immediately.  If their financial circumstances have changes, they may be able to have their Chapter 13 bankruptcy payments reduced or even have the case converted to a Chapter 7 bankruptcy and still save their home from foreclosure.

avatar

About Reed Allmand

Website

Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

View all posts by Reed Allmand

Subscribe

Subscribe to our e-mail newsletter to receive updates.

FAQ

Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

Learn More
What happens if the stay terminates on my home?

If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

Learn More

Find Location

map
  • Dallas Bankruptcy

    5646 Milton Street, Ste. 120 Dallas, Texas 75206
  • Fort Worth Bankruptcy

    860 Airport Freeway, Suite 401, Hurst, Texas 76054
  • More Locations

Meet Our Clients