I’m in Chapter 13 and Behind on Mortgage Payments Again–What Now?

30 Jul I’m in Chapter 13 and Behind on Mortgage Payments Again–What Now?

Many of my clients end up in bankruptcy because of a series of unfortunate events. Sometimes those events continue after the case is filed, and their troubles continue. When you file a Chapter 13 payment plan, you are generally required to keep making your regular mortgage payments, or resume making those payments if you have gotten behind. So what happens if you can’t make your payments after you have filed a Chapter 13?

Usually the mortgage lender will file a motion for relief from stay, asking the court to release your property and allow them to proceed with foreclosure. Some lenders will file that motion as soon as you miss a payment; others will allow the default to continue for a period of months before they take any action.When you receive that motion, your first step (if you want to keep your property) should be to contact your attorney. Your attorney should be able to tell you how such motions are typically handled in your district, and what information you need to put together for the court. Your attorney may also be able to negotiate a settlement for you, that will allow you some time to catch up the payments, and perhaps keep your payment plan going. There may be other alternatives, such as modifying your plan, that are available. The catch is that such motions–generally referred to as “362 motions,” for the section of the Bankruptcy Code that governs them–have a very short time fuse. If you don’t act quickly, you may find that the relief has been granted, and you are facing foreclosure once again.

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Däna (pronounced "Donna") Wilkinson, has been a bankruptcy lawyer in South Carolina for 20 years. She is certified as a bankruptcy specialist by the South Carolina Supreme Court.
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