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Making Back Mortgage Payments During BK7 Proceedings

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Anonymous
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Making Back Mortgage Payments During BK7 Proceedings

My basic question is - Can I pay my back mortgage payments while filing Chapter 7 Bankruptcy?

 

As far as my timeline goes - I have filed and the trustee meeting is in 3 weeks, and the discharge date a few months after that.

 

Due to the loss of my business, I filed Chapter 7. I am behind on my mortgage, but a stay has been placed so the mortgage company cannot foreclose. They are now filing to have the stay lifted so they can proceed with foreclosure.

 

A family member has offered to help catch me up on my back payments. Will that jeopardize the chapter 7 if I make one large payment (about $18,000) to my mortgage company? Or, would making 4 payments of about $5,000 each over the next 4 months before the discharge? I would then be current on my mortgage going into the discharge.

 

We were going to wait until after the discharge to catch up, but it seems more and more risky to wait that long. My lawyer does not have a definitive answer except to seek loan modification (to help buy some time), which I was already turned down once for.

 

I'm trying not to lose my home through this process. It's worth about $180,000 with about $90,000 in equity.

 

Thank you!

Message 1 of 5
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Anonymous
Not applicable

Re: Making Back Mortgage Payments During BK7 Proceedings

I'm not an attorney, so that my suggestion with a grain of salt. 

 

I don't think there's a problem with a post-filling payment to your mortgage company by a family member. I would consider first, though:

1) What is the exemption that applies to your home's equity? Will making an $18k payment put you over the limit?

2) You have some bargaining power with your lender while you are delinquent but protected by the automatic stay. Will making this payment prevent you from obtaining a modification? Have you called your lender's loss mitigation dept. to inquire about other options?

3) In the event the payment may be considered preferential or a gift, I'd personally wait until after the trustee files  the "no asset" paperwork. At minimum, it eliminates the need for an explanation.

Message 2 of 5
despritfreya
Frequent Contributor

Re: Making Back Mortgage Payments During BK7 Proceedings

Message 3 of 5
Anonymous
Not applicable

Re: Making Back Mortgage Payments During BK7 Proceedings

I'm not sure how this thread got started. I only posted the original back on the 22nd. Not sure how this person's reply started a new thread.

Message 4 of 5
despritfreya
Frequent Contributor

Re: Making Back Mortgage Payments During BK7 Proceedings


@Anonymous wrote:

I'm not sure how this thread got started. I only posted the original back on the 22nd.


Don't worry about it.  Not a big deal.

 

Des.

Message 5 of 5
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