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Currently in chapter 13, we are 9 months behind in mortgage. Now bank has filed for motion to lift stay.

Saint Louis, MO |

they gave us 3 options..give up the home, prove we are NOT behind or come up with half. We don't have the money, we ARE behind so there is nothing to prove and WE WANT OUR HOME. The bank won't speak to us about modification because we are in chapter 13! Our only hope is that the Judge not grant the motion to lift stay but thats dreaming. Help! All we want is to be able to modify our home loan. Getting put out would only cause MORE issues/financial strain because our current home loan is NOT in the chapter 13 so we would have to pay it back AND pay rent somewhere else. Is the bank required to offer modification BEFORE filing foreclosure?

Attorney Answers 4

Posted

Your Bankruptcy is EDMO, right?
Why not a 6 month stipulation for repayment of arrearage?

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Asker

Posted

I would love to but the requirement for THIS option is to pay half FIRST....which is thousands of dollars.

Gary D. Bollinger

Gary D. Bollinger

Posted

I don't have access to the local rules here, but if you do, please confirm your assumption.

Posted

Assuming you have not already been considered, request a modification under HAMP. The guidelines require lenders who participate to ignore the bankruptcy. Go to this website to determine if your lender participates. www.makinghomeaffordable.gov . If it does, you may be able to incorporate the process into our existing case.

If it does not, you may be able to dismiss your chapter 13 and file a new one to include the additional arrears in the new case, although there may be a bar to refiling. You will need to request extension of the automatic stay immediately upon filing, so make sure your attorney is up to speed on this.

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Posted

I would suggest that you respond to the Motion to Lift Stay and show up for the Court hearing. When you are in Chapter 13, creditors will often give you an option of entering into an APO (Adequate Protection Order) to give you 6 months to catch up on your past due mortgage payments. Nothing in Chapter 13 prevents you from obtaining a loan modification but loan modifications aren't a gift from Santa Claus either. You have to show that you qualify for the programs that the lender participates in & any loan modification may result in you having to make a larger payment to your Chapter 13 Trustee.

I filmed a 4 part series explaining loan modification that you may wish to view & am posting the links below. Hope this perspective helps!

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Posted

Unfortunately, the judge does not have discretion to deny the motion for relief if it is properly brought and if you have not been making your mortgage payments since the Chapter 13 case was filed.

Loan modification is a voluntary process that banks engage in when they believe that they will lose less money through a modification than through foreclosure. They are not legally required to change the terms of yoru mortgage. You signed up for the mortgage and they are legally entitled to stick to the agreement you made.

Many banks will negotiate loan modifications during a Chapter 13 bankruptcy, but it is not required.

If the bank is asking for relief from stay, this is an indication that you have not been making your mortgage payments since the bankruptcy was filed. Pre-petition arrears can be paid through the Chapter 13 plan, but you have to keep up with the ongoing mortgage payments in order to keep the house. If you cannot do that, it is an indication that you cannot afford the house you live in. Ultimately, you may have to look for other living arrangements.

One option to get things back on track would be to have your current Chapter 13 case dismissed and then refile. Since a motion for relief has been filed, you cannot voluntarily dismiss the case without facing a bar to refiling, but if it is involuntarily dismissed then you could refile and roll the 9 months of arrears into a new plan. Ultimatley, however, if you cannot keep your mortgage payments current going forward, then you cannot afford your house.

You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.

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