In a Chapter 13 Bankruptcy you can pay mortgage arrears, or back due payments, through your plan. To complete your plan, you will need to stay current on your ongoing mortgage payment, which can be paid through the plan or outside the plan. On occasion, things come up, and debtors are unable to make the ongoing mortgage payments. If you miss payments while you are in a bankruptcy, your mortgage company can file a motion for relief from stay or a motion for adequate protection. This motion will assert, in one form or another, that you have not made post-petition payments as required by the bankruptcy code and that the creditor would like the automatic stay to be lifted. If you are not current, there is a good chance that they stay will be lifted. Once the automatic stay is lifted your mortgage company may begin foreclosure proceedings and you may lose your home.
However, there may still be options available. In some cases, lenders will consent to a stipulation agreement. At its core this simply means that the two parties have come to an agreement on some matter. Within a bankruptcy context, it means that the parties agree that the payments are past due. Further, you can take you back due post-petition payments (any missed payments since you have filed for bankruptcy) and pay them in payments over a six month period. If you do a stipulation agreement you will be required to pay your stipulation payment, or “stip payment”, in addition to your ongoing mortgage payment. It is important to note, that at this stage, your lender may have added attorney’s fees or court costs to the amount you owe, all of which will have to be paid within six months. If you miss any payments, either stipulation payments or your ongoing mortgage payments during this time, the creditor will likely pursue the motion for relief and may foreclose upon your house.
If you cannot afford this option you will want to speak to your attorney as soon as possible about your options with regard to your property. Once a motion for relief is granted there is very little that can be done. A motion for relief does not necessarily mean that your lender will foreclose upon your property, but it does mean that they legally can should they choose to pursue this option.
If you still have questions, or would like to schedule an appointment, contact a St. Louis Bankruptcy Attorney today!