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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34816
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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My mortgage company has asked for relief from my Chapter 7

Customer Question

My mortgage company has asked for relief from my Chapter 7 bankruptcy filing so that they may begin foreclosure proceedings; however, I’m concerned that if the bankruptcy trustee now thinks I’m not paying my mortgage and, subsequently, “may” have that extra cash on-hand, he may force me in to a 13. My bankruptcy should be finalized by 1st week of May. Should I try to “delay” the relief request until the bankruptcy is finalized?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.

Hi JACustomer,

The right to file a Chapter 7 instead of a Chapter 13 does not depend on the debtor's expenses - it depends solely on the debtor's income. If your current income level qualifies you for a Chapter 7, this will not be changed - whether or not you are paying your mortgage.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

 

Customer: replied 3 years ago.

Please clarify for me. "The presumption does not arise" was what allowed me to file a chapter 7 vs a 13. My understanding was that the "presumption" was a calculation of both income AND fixed expenses THAT ARE OR WILL BE left AFTER all the other debts are wiped clean? As my wife and I make a combined income of approx 103K we just barely squeaked by to qualify for the chapter 7. Nonetheless, we did qualify. If I should stop paying my mortgage I'm suddenly flush with an additional $2,000 to pay creditors. No?

Expert:  cfortunato replied 3 years ago.

I should have said if your total gross household income is below the state median, expenses are not a factor in the Means Test.

If your household income is above the median, so that the second part (expenses) of form 22A (Means Test Calculation) had to be filled out, then the amount you pay for the mortgage or for rent could be a factor, especially if you had to claim an amount greater then the standard for your county.

However, the motion for relief from the automatic stay will have to be dealt with before the Bankruptcy is finalized. You will not be able to delay it until afterward.

Since the discharge is so close, it does not make sense for the mortgage company to file this motion, because it is costly, and the automatic stay will be gone as soon as the Bankruptcy is discharged. Perhaps if you contact the mortgage company to explain this to them, they will withdraw the motion.

Customer: replied 3 years ago.

Last question and I'll hit the accept button! I will do as you suggest and ask them to remove withdraw the motion. In the event they refuse, must the income and expense calculations be re-submitted?

Expert:  socrateaser replied 3 years ago.
Hello.

Apparently the other expert has decided not to continue the conversation. Please permit me to assist.

There is no reason for you to do anything, unless the trustee files a motion to dismiss or convert your bankruptcy to a Chapter 13. Trustees are busy, and not everything that happens is immediately observed. So, allowing "sleeping dogs to lie" may be the smartest move at this point.

Hope this helps.

NOTICE: My goal here is to educate others about the law. I am always available to answering your follow-up questions after you click Accept – however, if you do not click Accept, the website gets paid, and I receive nothing. This is true, even if you are on a subscription plan. So please click Accept, so that I will be able to continue to provide this service for others in the future.

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34816
Experience: Attorney and Real Estate Broker -- Retired (mostly)
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Attorney and Real Estate Broker -- Retired (mostly)