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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2447
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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I reside in Texas and am currently going thru Chapter 13 Bankruptcy.

Customer Question

I reside in Texas and am currently going thru Chapter 13 Bankruptcy. My mortgage was not "included" in the bankruptcy. I can no longer afford to pay the mortgage/utilites and the bankruptcy payment. I have read in some documents that no one can force you to remain under Chapter 13 if you do not wish to continue. My payments are currently taken from my payroll check, am I able to have the payments stopped and have my case dismissed. I do understand that my mortgage will go to forclosure.
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.
You have the option to convert your case to chapter 7, and the trustee in that case can liquidate any unexempt assets. To qualify, you need to show the court your change of circumstances of why you can't afford the chapter 13 anymore. You can surrender the mortgage in the case, discharging the balance. The lender will then foreclose to transfer title back to the lender.
The other option is you can bring a motion to dismiss, which can bar you from refiling for 6 months in some circumstances. If granted, the case will be over, and the trustee payroll control will stop at that point. Your creditors then can start collecting again, including foreclosure.
Customer: replied 4 years ago.

So I have to put in for a motion to dismiss the case no matter what? I just can't walk away? I don't feel I should have to give them my reasons if I don't wish to continue.

Expert:  Terry L. replied 4 years ago.
The trustee payments that are coming out of your check will not stop without a motion, since they are a court order.
Customer: replied 4 years ago.
Ok, so say I keep paying on the bankruptcy and don't make my mortgage payments. Am I able to keep paying on the bankruptcy without it being effected if I forclose on my house?
Expert:  Terry L. replied 4 years ago.
If you stop paying the mortgage, they will move to take the home outside of the bankruptcy case, where they can then foreclose. This will not affect the ch13 plan payments. If there was arrears being paid thru the case to the mortgage, this will stop after the lender's motion to modify the automatic stay.
Customer: replied 4 years ago.
What do you mean by If there was arrears being paid thru the case to the mortgage, this will stop after the lender's motion to modify the automatic stay? I don't understand that. I was not late on my mortgage when we filed bankruptcy so my attorney kept that as something we paid on our own and advised us we were not protected on the house.
Expert:  Terry L. replied 4 years ago.
If you were behind on the loan when you filed the case, your mortgage arrears would be paid thru the chapter 13 plan. If you were current, there would be no effect. When you fall behind on your post-filing mortgage payments, the lender must bring a motion in bankruptcy court in order to start a foreclosure.
Customer: replied 4 years ago.
So, since nothing was being paid on my mortgage in my bankruptcy plan they still have to go thru the bankruptcy court to foreclose? Will I be called to court on this? I assumed since my mortgage was not part of my plan that I was in control of that. I really don't want to deal with my current Attorney on this - not the nicest man to deal with and I already know he will tell me I need to come in and talk to him, which he will want more money... If I had money to give I wouldn't be in this predicament.
Expert:  Terry L. replied 4 years ago.
Yes. You get protection from all creditors. It's a matter of formality. If you are behind, and don't cure by the motion date, the court will allow the automatic stay to modify to let the lender start a foreclosure, or otherwise collect on the debt outside the case.

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