Consumers who file Bankruptcy Lose the “Privilege” of paying mortgages by ACH or EFT

17 Aug Consumers who file Bankruptcy Lose the “Privilege” of paying mortgages by ACH or EFT

While attending a Texas advanced consumer bankruptcy seminar last week, I was surprised and amazed (I know, I should not have been) to learn that mortgage servicers consider the ability for a consumer to make  their mortgage payments by ACH or EFT (electronic funds transfer) as a “Privilege”.   This was in response to me stating that a number of my clients were having problems with their mortgage servicer not accepting their mortgage payments electronically and the mortgage servicer’s refusal to talk with the consumer after the case was filed and/or after discharge.  Of course the reason another mortgage servicer’s attorney gave was that the mortgage servicers did not want to violate the automatic stay or the discharge injunction.  When the first attorney announced it was a privilege, one of our judges immediately piped back we are in an electronic age and that is the way most people pay their bills.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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