Post-Petition Mortgage Payments–Good Records are Key

31 Jul Post-Petition Mortgage Payments–Good Records are Key

When you file a Chapter 13 to restructure your debts, you usually keep making your regular mortgage payments.

In some districts, you make those payments to the Chapter 13 trustee, essentially consolidating all you debt payment. In those districts the trustee is referred to a conduit for mortgage payments. In others, you make your mortgage payments directly to the mortgage company, if you want to keep your home.

If you don’t, your mortgage company will file a motion, called a motion for relief from stay, asking the bankruptcy court to end the automatic stay that prevents actions against you or your property while you are in bankruptcy. If the court grants the motion, your lender can proceed with, or resume, their foreclosure action.

What if you get such a motion and you don’t think you are behind in payments? It is critical that you respond promptly, and if you have been keeping good records of your payments to the mortgage company, you will be able to respond quickly and completely. (In a conduit district, the trustee will have the relevant records.) You will need to produce records of payment (canceled checks, bank statements showing bank drafts, etc). If you have mailed payments, it may be helpful to have records of mailing.

Your attorney will help you prepare a response to a motion for relief from stay, and will help present our records of payments to the court if necessary. Banks and other lenders are just as prone to mistakes as the rest of us are, and your attorney will also know what documentation to request from the lender and how to read those documents to protect your interests and your home.

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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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