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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12366
Experience:  JD, MBA
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i am currently in a chapter 13 plan. I feel behind in the mortgage

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i am currently in a chapter 13 plan. I feel behind in the mortgage arears and the mortgage company filed a motion to relief stay on the grounds that im behind in payments and that i have no equity in the secured property. Proof of claim is $199,000 and arreage of $70,000 and estimated value of $220,000. Do i have any grounds to stand on?? How can i defend that??
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 6 years ago.
Hello and thank you for allowing me the opportunity to assist you.

I'm sorry to say that it does not look good for you. Simply put, in order to keep your house, you must pay the mortgage. Even a bankruptcy cannot stop a foreclosure if the mortgage and arrears are not paid through the plan. In fact, a failure to pay into the plan will not only result in the lender filing a motion to lift the stay (which will almost certainly be granted), but it will also likely result in the trustee filing a motion to dismiss your bankruptcy. However, you can convert your Chapter 13 into a Chapter 7. Unfortunately, while that will help discharge your debts, it will not help you keep your house. The only option that I see at this point is to work out a deal with the lender if possible.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

I regret that my answer is unfavorable, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than a truthful response. With that in mind, I hope that you found value in my answer. If so, then please remember to click the green accept button so that I will receive credit and compensation for my time. Positive feedback is always appreciated as well. Thank you and good luck!

Customer: replied 6 years ago.
I'm sorry I'm not behind on my mortgage arrears I fell behind on my regular monthly payment. If I pay all the payments before the hearing can the judge rule in my favor or is it to late to cure the late payments?? Also with no equity Wat defense do I have against that?? Shouldn't the mortgage arrears cure the equity problem over time??
Expert:  TJ, Esq. replied 6 years ago.
Hi again. My answer is the same. You must pay in order to keep the house. However, if you can get caught up prior to the hearing, then I have a feeling that the judge will rule in your favor and deny the motion to lift the stay, particularly if this is the first time you fell behind. You don't have a defense against the no equity issue. The arrears may or may not cure the equity problem over time. Equity simply means that your house is worth more than what you owe. Obviously, in some cases you could repay all of your arrears and be totally up to date, and yet your house is still worth less than what you owe. Hopefully over time, your house will increase in value, and that will solve the equity problem ... but for now, it cannot be solved.

I hope that helps. Please remember to click "accept."
Customer: replied 6 years ago.
Yes it is my first time falling behind and it will never happen again. The arrears will cure the equity problem over time because they will get $987 a month from the trustee for the next 4 years and 2 months. Can that be my defense against the No equity as stated in section 362 of the bankruptcy code?? Can we ask the judge to make the mortgage company a priority payment so that can give them a sigh of relief as to their security interest or will it be a 100% rule in the mortgage company favor as the their motion of relief of stay??
Expert:  TJ, Esq. replied 6 years ago.
Hi again.

No, unfortunately the fact that paying the arrears will eventually result in equity does not solve that problem now. I think you'll probably win if you are able to catch up on your missed payments ... so that should probably be your strategy. The judge cannot make the mortgage company a priority because that is unfair to other creditors (they must be treated equally).

I hope that helps. Please remember to click "accept."
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