This week we discovered a new and ingenious way that mortgage lenders are circumventing the bankruptcy laws and forcing Chapter 13 debtors into foreclosure. Typically when a consumer gets behind on their mortgage and are faced with foreclosure they can file Chapter 13 bankruptcy. This allows them to cure the default under the mortgage, cure property tax defaults, and pay out what is delinquent over three to five years.
Mortgage companies don't like this obviously because they'd prefer to foreclosure and take the consumers equity in the property, or, if they don't have any equity, to liquidate the collateral and get their money into a performing loan. Additionally, there's a lot of extra bookkeeping, legal expenses involved in monitoring a case in bankruptcy, not to mention the danger of violating the automatic stay and getting sanctioned.
This week we noticed two different mortgage companies use the same trick to force our chapter 13 clients into a default situation. What they did was to pay the delinquent property taxes that were included in the debtor's chapter 13 plan. Then they notified the debtor that there was an escrow shortage in the account so their monthly payments had to be increased. For one of our clients their mortgage payment would have doubled for the next year until the delinquent property taxes were paid.
The chapter 13 trustee involved fell right into the trap set by the mortgage company. When they received a letter from the taxing authority that the taxes had been paid, they quit making the monthly payments provided in the plan. We almost fell for the scam too thinking there was nothing we could do about it, until we realized the mortgage companies had violated the confirmation order by forcing the debtor to pay the property taxes prematurely and causing a post petition default of their deed of trust.
If the debtor can't pay the increased mortgage payment then, of course, the mortgage company will file a motion to lift the automatic stay or notice the debtor for default, if an agreed order is in effect. Eventually the debtor may find his house up for foreclosure again, despite the protections of Chapter 13 and his diligent compliance with the terms of his plan.
Hopefully, when we bring this to the courts' attention the judges will put a stop to this practice.
Filing a bankruptcy is often deemed to be demanding. That may be mainly because filing bankruptcy is not incredibly common and also the bankruptcy laws keep changing. Therefore, to file a bankruptcy case one must use a bankruptcy lawyer. But, is discovering a bankruptcy lawyer close to your neighbourhood that effortless?
ReplyDeletebankruptcy lawyers.com is here to guide you through the method by helping you uncover a fine Bankruptcy Lawyer to aid take some of the weight off of the shoulders. Very first, our bankruptcy article area will give you the tips and tools you'll need to ease a few of the confusion with the bankruptcy procedure. Then our attorney directory gives you with listings with the ideal bankruptcy lawyers within your state and county.
I'm Абрам Александр a businessman who was able to revive his dying lumbering business through the help of a God sent lender known as Benjamin Lee the Loan Consultant. Am resident at Yekaterinburg Екатеринбург. Well are you trying to start a business, settle your debt, expand your existing one, need money to purchase supplies. Have you been having problem trying to secure a Good Credit Facility, I want you to know that Mr Benjamin will see you through. Is the right place for you to resolve all your financial problem because am a living testimony and i can't just keep this to myself when others are looking for a way to be financially lifted.. I want you all to contact this God sent lender using the details as stated in other to be a partaker of this great opportunity Email: 247officedept@gmail.com Or WhatsApp/Text +1-989-394-3740.
ReplyDelete