If my loan modification was been completed and signed by the bank and I only have a small amount of debt should I let my case be dismissed? 16 Answers as of November 03, 2014

My loan modification was been completed and signed by the bank and I only have a small amount of debt about $10,000 left in my file, should I let my case be dismissed? The Trustee is requesting payment that I know does not need to go to the bank as my loan has become finalized.

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EDWARD P RUSSELL | EDWARD P RUSSELL
You can dismiss the case if this is a Ch 13;? a Ch 7 will take a motion to the court to dismiss.
Answer Applies to: Minnesota
Replied: 11/3/2014
Ronald K. Nims LLC | Ronald K. Nims
On one hand, you have $10,000 of unsecured debt that will be dismissed in the Chapter 13. On the other hand, you have to modify the Chapter 13 plan to make the new mortgage payments and that will affect how much will be paid to the unsecured creditors. You need to run the numbers both ways and decide which is your best option.
Answer Applies to: Ohio
Replied: 11/3/2014
Rhymer Law Firm
Rhymer Law Firm | William Rhymer
You need to discuss your situation with your attorney so that you would know the consequences in your unique factual situation.
Answer Applies to: Georgia
Replied: 11/3/2014
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Talk to your attorney about the possibility of either doing, a) a post confirmation modification to take the mortgage company out of the Chapter 13 Plan, or b) converting your case to a Chapter 7. If you are without an attorney, pay an experienced BK lawyer for advice.
Answer Applies to: Colorado
Replied: 10/30/2014
Barnhart Law Office
Barnhart Law Office | Bruce C Barnhart
Maybe, but it may be in your best interest to remain in the case. If you have a small amount of claims allowed, you should receive a discharge after the claims are paid in full or you pay the Plan Base Amount. If you dismiss your case, the creditors may be able to charge interest and late fees and the creditors that failed to file claims will be able to collect their debts. You need to discuss the matter with your attorney.
Answer Applies to: Nebraska
Replied: 10/30/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    So file a motion to modify the plan and get a discharge. See local counsel about this.
    Answer Applies to: California
    Replied: 10/30/2014
    D.J. Rausa, Attorney at Law | D.J. Rausa
    Maybe the better idea is to modify your plan so the money does not go to the bank. That way you can be debt free at the end of your case, rather than have the 10k still hanging over your head.
    Answer Applies to: California
    Replied: 10/30/2014
    Novakov & Associates, PLLC
    Novakov & Associates, PLLC | LINDA S. NOVAKOV
    If you are in a position to pay the additional debt after the loan modification, then you should discuss with your attorney whether dismissing the bankruptcy is the best course of action.
    Answer Applies to: Kentucky
    Replied: 10/30/2014
    Law Office of Melissa Botting | Melissa Botting
    You should consider what a modified plan would look like. Since you no longer have the mortgage arrearage to pay and the monthly loan amount has been reduced, is the amount you would need to pay into a plan more than you would need to pay on your other debt? The interest and penalties have not run on your other debt while you have been in the bankruptcy. The trustee will not pay your mortgage arrears if you let the trustee know about the modification. The plan payments would be directed to your other creditors. Those are the numbers you should compare.
    Answer Applies to: Texas
    Replied: 10/30/2014
    Law Office of Andrew Oostdyk
    Law Office of Andrew Oostdyk | Andrew Oostdyk
    The bank needs to amend their Proof of Claim to reflect the modification and change in arrears, the Trustee can then pay your other creditors with your plan payments. There are several factors to consider before dismissing your case. One factor, is that your remaining creditors will be able to charge interest on the outstanding balances from the date of filing and moving forward of you dismiss your case. In Bankruptcy, interest does not accrue on unsecured debt (except for student loans). 2nd, will your modified Plan pay your creditors in full? Depending on your situation, your new plan may pay less than 100% to your remaining unsecured creditors. Another factor to consider is if you qualify to convert to a Chapter 7 Bankruptcy. Once you have filed Bankruptcy, it will appear on your Credit Report regardless if it was completed or dismissed, it often makes sense to complete the Bankruptcy and get your Order of Discharge.
    Answer Applies to: Texas
    Replied: 10/30/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You have to file a motion for the judge to approve the loan modification during the bankruptcy. If you are not going to do that then your case may be dismissed by the trustee.
    Answer Applies to: New York
    Replied: 10/30/2014
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