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, 2014My 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.
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
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
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
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
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