Any person who files for Chapter 13 bankruptcy should keep a folder with proof of all of their post petition mortgage payments. Mortgage companies will occasionally make mistakes and will accuse a bankruptcy debtor of missing mortgage payments when the payments were in fact paid on time.
I recently had a Rome GA bankruptcy client who experienced this first hand. Fortunately, she was so well organized that she had no problem proving that she had made all of her post-petition mortgage payments. In her case, when she made her July mortgage payment, the mortgage company applied her payment to a different person’s account. I was shocked that the attorneys for the mortgage company immediately filed a Motion for Relief from the Automatic Stay over just one payment. A motion for relief is basically a request from the court to remove the bankruptcy protection over the house so that the mortgage company can begin foreclosure proceedings.
The reason that this motion for relief irritated me so badly was that they requested $850 in attorney’s fees for filing this motion in bankruptcy court. Their attorney’s fees were more than her mortgage payment! Are the attorneys for the mortgage company just trying to generate legal fees? Surely not. Perhaps they would argue that if the debtor has missed one payment, they will probably miss a few more before the hearing is held with the court. In some cases, this may be true.
Fortunately, the Rome GA bankruptcy client had proof of every single mortgage payment. She also had proof of when the check cleared the bank. As a result, the attorneys for the mortgage company withdrew their motion at no cost to my client.
I’ve had other cases in the past where a client will say, “I swear I made that payment but I can’t find any proof.” This type of statement won’t get very far with most bankruptcy judges. If you paid by check, you should be able to get proof from your bank.
If you are diligent about keeping proof of every payment in a folder that can be easily accessed, you won’t have any problems. If you fail to keep proof, you may end up making that same mortgage payment again as well as paying needless attorney’s fees to the mortgage company.