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When you "back out" of Chapter 13 Bankruptcy, do you resume loan payments on surrendered property that was part of the plan?

Fort Myers, FL |

My landlord told me he has backed out of Chapter 13 and will resume making mortgage payments on our apartment, which he surrendered in his initial Chapter plan. Is something like this possible?

Attorney Answers 4

Posted

Yes, it is possible that the landlord is attempting to catch up on missed mortgage payments. However, without him showing you proof of this, there is no other way I know for you to find out. If the bankruptcy was dismissed, then the bankruptcy has nothing to do with the mortgage anymore.

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Posted

The term "surrender" may or may not have any meaning at all in a case that is dismissed ("backed out" is not a proper term for anything in Bankruptcy). It is a bankruptcy term that means he will allow the lender to foreclose. If the lender does not foreclose and the case is dismissed, his intent to surrender is meaningless. The lender may or may not foreclose because of a default in payments or other reasons.

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2 comments

Asker

Posted

Thank you for your response. "Backed out" were his words, not mine. The part of your response about "may or may not foreclose" is not clear to me. Do you mean that in some cases the bank still does go ahead with foreclosure, even if the borrower has made an attempt to catch up on the default?

Scott Benjamin Riddle

Scott Benjamin Riddle

Posted

It means I don't know the state of the loan, payments or any agreement the landlord has with them, or whether they will or will not foreclose.

Posted

Since your landlord's Ch.13 was dismissed (probably for failure to make Plan payments), he can keep the property until it is foreclosed upon. Sounds like he wants to keep it, so he is making monthly mortgage payments.

Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.

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4 comments

Asker

Posted

So does a dismissal of a Chapter 13 case mean that a property will definitely go into foreclosure at some point? Like there is no way for the property owner to keep it for good, even if they have resumed making payments?

Diane L Gruber

Diane L Gruber

Posted

The mortgage bank will expect you to catch up on all past-due payments. Soon, or they can & will foreclose.

Asker

Posted

I was under the impression that Chapter 13 temporarily halted foreclosure proceedings?

Diane L Gruber

Diane L Gruber

Posted

Only while the BK is pending, or until the mortgage holder gets a "relief from stay" from the court.

Posted

It is possible but very unlikely. He will be so far behind by now, unless he received some money from somewhere or got a modification.

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Asker

Posted

He says he is 6 months behind. But did not confirm if he got a modification.

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