In a chapter 13 repayment plan, debtors who are catching up on missed mortgage payments make payments to a trustee to get caught up on the missed payments, while continuing to make their regular ongoing monthly payments directly to the mortgage company. It used to be that a debtor could complete their bankruptcy case when they made all their scheduled trustee payments, even if they weren't current in the monthly mortgage payments that came due after the case was filed.
Rules changed a little over a year ago that requires a mortgage company to file a statement at the end of a chapter 13 as to whether the debtor is current or not. This is good, because it means that a debtor can exit their bankruptcy with confidence that they have fixed their mortgage problems. But it now means that the trustee and other creditors know if the person hasn't made their mortgage payments. Since the chapter 13 plan payment is based on a promise that the debtor will also make all mortgage payments, a case can now be dismissed if they miss mortgage payments during their case.
If you are in a chapter 13 plan and are having difficulty paying both the trustee and your mortgage, call your attorney ASAP! You may have options, but timing is important. Call attorney Chris Bush, at (619) 295-3322, if you need help. He is an experienced bankruptcy attorney and consumer debt advocate. He’ll help you find the best solution to your debt burden and get back you on a track to financial freedom.