Chapter 13 Foreclosure Louisville Kentucky Bankruptcy

A Chapter 13 Bankruptcy can certainly stop most Louisville Kentucky foreclosures but you have to make the payments on time in a Chapter 13 and keep records to stop a foreclosure.  If you file a Chapter 13 Bankruptcy to stop a home mortgage foreclosure keep a record of the payment history and proof that you are current with your post-petition mortgage loan payments.  Bankruptcy courts in  Louisville Kentucky and Indiana require debtors to pay their ongoing mortgage payments directly to the mortgage lenders starting the day they file their Chapter 13.   Debtors can only catch up and pay any arrearage to stop a foreclosure through their Chapter 13 plans. 

If you keep records of the mortgage payments you will have have proof if the mortgage company files what is called a motion for relief from stay.   Mortgage companies that are not paid on time will file motions for relief from the stay if they are not being paid on time requesting permission to start the foreclosure again in state court.   Mortgage companies can also file  motions for relief from stay if they are not keep proof of tax and insurance payments if your property taxes and insurance is not being escrowed and paid by the mortgage company.

Banks will often file a motion for relief from stay and Debtors will often have to prove their payment history.  If you cannot produce copies of canceled checks, or receipts for payments the home will simply go back into foreclosure.

At any hearing for the motion for relief from stay the lender may present a payment history that shows receipts, payment reversals and disbursements from escrow.  If the debtor cannot produce proof of payments, there the judge will simply accept the bank’s testimony and the home will go back into state court for a foreclosure.   Too many Debtors have been forced to pay double post petition loan payments simply because they didn’t keep records. 

I tell my clients to create a Chapter 13 file for records that includes copies of payments, escrow payments, insurance payments, appraisals, informal valuations, pay stubs and tax returns.  You may not need these documents but if you do it will save the day.  You have to take an active role in your Chapter 13 case because your attorney won’t be keeping your receipts and tax records.   Be sure to educate yourself about the process. 

Nick C. Thompson Louisville Kentucky Chapter 13 Bankruptcy Attorney