QUESTION
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?
Asked on Oct 30th, 2014 on Bankruptcy - New York
More details to this question:
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.
10 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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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.
Answered on Nov 03rd, 2014 at 3:33 PM
William Rhymer
You need to discuss your situation with your attorney so that you would know the consequences in your unique factual situation.
Answered on Nov 03rd, 2014 at 12:49 AM
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.
Answered on Oct 30th, 2014 at 5:37 PM
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.
Answered on Oct 30th, 2014 at 5:35 PM
Real Estate Attorney serving Florence, KY
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Linda S. Novakov & Associates, PLLC
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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.
Answered on Oct 30th, 2014 at 12:14 PM
Probate Attorney serving Friendswood, TX
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Law Office of Melissa A. Botting
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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.
Answered on Oct 30th, 2014 at 11:59 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Unless, your Court Order says that the Loan Modification survives conversion or dismissal, I would not let the case be dismissed under any circumstances. Talk with your counsel.
Answered on Oct 30th, 2014 at 11:45 AM
It would have helped if you had indicated whether this case was a Chapter 7 or a Chapter 13 because I am not comfortable guessing as to an answer. Why isn't your own attorney advising you about this?
Answered on Oct 30th, 2014 at 11:44 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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This is best answered by the lawyer you hired to do your chapter 13 bankruptcy as there are many other reasons to stay in.
Answered on Oct 30th, 2014 at 11:43 AM
No complete the plan and get the benefit of the dismissal.
Answered on Oct 30th, 2014 at 11:20 AM