QUESTION
Is there any way to get the trustee to remove the escrow monies since I have a surplus in my account?
Asked on Jul 27th, 2015 on Bankruptcy - Michigan
More details to this question:
I am in Chapter 13 but fell behind on my mortgage. I caught the escrow part up in January 2015 and now have a large surplus in escrow. The bank has filed a relieve from stay (I think it’s called). From my calculations, missed principle/interest is about $16000 and missed escrow is $12000. I have the $16,000 that I can pay but have an issue with the bank still claiming the $12,000 since I am not behind on escrow. I sent in a large payment for escrow in January 15 to catch that up. I just asked that the extra funds I sent in be applied to escrow, which the bank did. My escrow payouts are only $4000 a year yet the bank is claiming $12,000 in missed escrow - tax office made a mistake and my property taxes went up 4 times normal, that has been resolved. The $12,000 escrow owed is $790 a month from the missed payments (escrow payments now are $289/month). After fall taxes are paid, I will have about $2500 left in escrow. Keep in mind, if this is removed, I can write a check to the bank for the $16,840.00 I am behind on, which I think would help sway the trustee if he can legally do this. Am I stuck repaying the escrow, which amounts to 3 year worth of escrow payouts?
6 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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You asked the wrong question. The trustee can't order the bank to release funds from the escrow account. Trustee's don't issue orders, trustees execute the judge's orders. Judges issue orders. What you need to do is to object to the bank's motion for relief from stay. Part of your basis for that argument would be that the bank holds the excess amount in the escrow account.
Answered on Aug 04th, 2015 at 3:28 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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First things first: you must discuss the proper way to proceed with your lawyer. If you do not yet have a skilled bankruptcy lawyer, find one, because you need one, very very soon. Your lawyer can effectively object to the claim of the mortgage-holder; he or she can possibly defend against the Motion for Relief from Stay which is on a very tight deadline: you must object within 14 days of the date of the filing of the Motion. There are several ways to respond to this situation, not all of which are mutually exclusive. But you must act fast, and you should definitely retain a lawyer who knows his or her business.
Answered on Aug 04th, 2015 at 2:32 PM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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If you can prove what you are saying, you should be able to oppose the motion for relief from stay on this ground, though you may need to file an objection to the allowance of the bank's proof of claim saying that escrow is short by $12,000 concurrently. If you have a lawyer in your Chapter 13 case, your lawyer usually contracts to handle all of this for you, but will need to be paid through the plan for the work. If you don't have a lawyer, you can contact us at 213-389-4362 for an in-person 1/2-1 hour consultation.
Answered on Aug 04th, 2015 at 2:15 PM
Escrow or impound payments are used to pay for property taxes and insurance for the property. You may be able to ask the lender to apply any excess money to reduce your arrearages, but in Chapter 13, your Bankruptcy Trustee does not step in to manage your property rights, so you are on your own.
Answered on Aug 04th, 2015 at 10:19 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Yes - Perhaps with a good attorney which apparently you may not have.
Answered on Aug 04th, 2015 at 10:19 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Sounds like you will need an attorney to straighten this out as you have been unable to do so yourself. It appears you have good arguments and should prevail.
Answered on Aug 04th, 2015 at 9:51 AM