In my experience as a Lemont bankruptcy attorney handling Chapter 13 bankruptcy cases, I have found that overwhelmingly the mortgage company is most often correct on what’s been paid and what has not been paid. The debtor often has the thought that he or she is current on the post-petition mortgage payments despite the fact that they can’t prove a particular month’s payment was made. It’s amazing when you are in debt, when you are in Chapter 13, when you are dealing through the stress, when you are dealing with the legal process, you can literally miss a month of mortgage payments and not realize you’ve done it. It’s probably not going to be the most recent month you’ve missed, it might not even be the second months that you’ve missed. But somewhere back in the last 6 to 9 months, it is possible that you as a person who is claiming bankruptcy to miss a mortgage payment and believe that you actually made it. It is not until the mortgage company brings the motion, it is not until we see the forensic accounting, and it is not until we realize that the debtor cannot come up with proof of payment that we realize that the debtor has fallen behind.
Now, if the debtor has not fallen behind to much, we can work out a default repayment order with that creditor. This default repayment order allows the debtor to make repayment of the part that they fell behind after the bankruptcy case was filed. It is in essence a payment plan within a payment plan already when you file Chapter 13 bankruptcy. There are specific time frames that the debtor must make the payments by, otherwise the creditor can send notice and if the default is not cured within 14 days after the date of the notice, then the stay is automatically modified and the mortgage company is no longer part of the bankruptcy case.
The benefit to both parties is readily visible. The benefit to the mortgage company is that if the debtor does not get current, a 14 day notice goes out, if they don’t get current after that, the stay is automatically modified. The mortgage company does not need to go back in court to submit that order to the judge’s chambers and have it entered. It basically shortens the bankruptcy process and saves the creditor money. As you can see, Chapter 13 law can get very detailed and complicated. Always seek the advice of an attorney when involved in a Chapter 13 bankruptcy case.