Personal Bankruptcy Secured loan payments chapter 13 pre confirmation.

[mdg80]

Jurisdiction

Oklahoma

I filed chapter 13 a few weeks ago and I have 2 auto loans and a mortgage that are going to be paid thru my plan. My question is do I pay them as usual between now and confirmation? My attorney is out of the office for the next 2 weeks so I haven't got a response back. I asked during our last meeting and he said to stop paying on all of my debts. But I've read that I have to pay my mortgage on time in the time between filing and confirmation or risk getting it dismissed.

 

[despritfreya]

1. You should listen to your attny.

2. If your jurisdiction requires "conduit" mortgage payments for all future monthly payments then payments are made through the Plan. How much is your Plan payment? Is it high enough to include the normal monthly mortgage payment?

Some jurisdictions require the Trustee to collect and then pay to the lender the going forward mortgage payments (conduit payments). Others only require it if the debtor was behind in those payments when the case was filed. Even other jurisdictions require the debtor to make the monthly payment directly to the lender. I do not know what Oklahoma requires but your attorney does.

3. Vehicle payments (unless under a lease agreement) are generally made through the Plan and would not require direct payments to the lender.

Pull out your Plan and read it. It should tell you who is getting paid under it.

Des.

 

[mdg80]

1. You should listen to your attny.

2. If your jurisdiction requires "conduit" mortgage payments for all future monthly payments then payments are made through the Plan. How much is your Plan payment? Is it high enough to include the normal monthly mortgage payment?

Some jurisdictions require the Trustee to collect and then pay to the lender the going forward mortgage payments (conduit payments). Others only require it if the debtor was behind in those payments when the case was filed. Even other jurisdictions require the debtor to make the monthly payment directly to the lender. I do not know what Oklahoma requires but your attorney does.

3. Vehicle payments (unless under a lease agreement) are generally made through the Plan and would not require direct payments to the lender.

Pull out your Plan and read it. It should tell you who is getting paid under it.

Des.

Yes my plan includes my mortgage and auto loans. Oklahoma does not require the mortgage to be paid thru the plan because I am current on all my payments. My attorney advised it would be best to do it because of of who is serving my mortgage. He said it was one of the worst ones.

I didn't asked him specifically about if I needed to keep paying the mortgage until the plan is confirmed in my last meeting with him. The mortgage is due next week and he hasn't responded back to me.

My understanding is that until the plan is confirmed the trustee isn't paying anything to anyone. So it could be 3-4 months before my mortgage is paid. Like I said some bankruptcy sites say you have to keep paying it until your Plan is approved. And some say to pay the mortgage and deduct the amount from the plan payment. Below is what I read.

"If any secured loan payments or lease payments come due before your plan is confirmed
(typically home and automobile payments), you must make adequate protection payments
(minimum payments meant to protect the creditor's interest in the property) directly to the
secured lender or lessor - deducting the amount paid from the amount you would otherwise
pay to the trustee."

I will just wait until my attorney responds when he is back to the office and go from there.

 

[despritfreya]

Here is the problem with this. . .

"If any secured loan payments or lease payments come due before your plan is confirmed
(typically home and automobile payments), you must make adequate protection payments
(minimum payments meant to protect the creditor's interest in the property) directly to the
secured lender or lessor - deducting the amount paid from the amount you would otherwise
pay to the trustee."

1. What website did you find this?

2. This is not a correct statement in many jurisdictions and, in fact, might be a minority view if it is a correct statement. For example, adequate protection payments are typically paid by the Chapter 13 Trustee for vehicle loans (not leases) out of the monthly Plan payment. Lease payments are paid by the debtor pursuant to 11 USC 365 with a pre petition default cured in the Plan. The going forward lease payment typically has nothing to do with a Plan payment.

3. In many jurisdictions, including mine (Arizona) conduit mortgage payments are typically disbursed by the Trustee before Plan Confirmation on a normal monthly basis since the Trustee is just a servicer for those payments. Vehicle payments on the other hand, with the exception of allowed adequate protection payments (1%/mo of the value - until Plan payments kick in - and only if the lender requests such payments - in my jurisdiction) are paid once the Plan is confirmed.

Des.