@Anonymous wrote:
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!
Well, your attorney really needs to give you some definitive answers, that's what you're paying them for.
For one, your attorney needs to tell you if your $90k in equity in your home is "exempt". Laws vary by state as to how much assets you can keep in a BK7, and $90k is quite a bit. "Exempt" means your state laws allow you to keep that much equity in your home.
How did you file with regards to your mortgage? Your choices should have been 1)Reaffirm, or 2)Retain, or 3)Surrender
Reaffirm means to exclude the mortgage from the BK and the original terms remain in effect. This is generally not advisable, but with $90k in equity you should be fine. If your mortgage balance was close to the value of the home you would not want to reaffirm.
Retain means you plan to keep the home and continue to make payments on time, but the debt is discharged so all the lender can do is repossess if you call behind on the payments, should they sell the home for less than the mortgage balance + fees you are not responsible for that.
Surrender means let them repossess the home.
If you filed with Reaffirm or Retain you should be OK catching up on the payments. BUT you should contact the Court Trustee and ask if they would have any objections to this. And you should contact Suntrust and make sure they will accept the payments - they don't leaggly have to, once you went 30+ days late they got the right to repossess and don't have to accept future payments. But, most lenders much prefer to have mortgages current instead of repossession.
The one tricky thing is that I assume the family member is loaning you the money? The Trustee can object to you taking on new debt during BK. The safest way for you to structure this is to sell xx% of the property to the family member in exchange for the money, and put this in writing.
I am NOT an attorney, and you really should get legal advice on this.
