The Court enters your Discharge Order when certain deadlines have passed.  The entry of the Discharge Order does not mean the Trustee has completed his/her evaluation of your assets.  

30 DAYS AFTER YOUR CREDITORS MEETING, WHILE YOUR CASE IS STILL OPEN:

The Trustee administers your Estate and looks for non-exempt assets to seize and sell and distribute the proceeds to your unsecured creditors.  If the Real Estate Market is on the upswing when you filed your case, or if your exemption barely covered your equity, there is a possibility the Trustee will wait until there is non-exempt equity in your home to administer your bankruptcy estate. 

The Trustee can claim post petition equity gains as part of the bankruptcy estate; your loan balance decreases; your exemption amount is frozen as of the Petition Date; and non-exempt equity is created.   To keep your home you must buy your non-exempt equity. If you are not able, the Trustee will sell your home. From the proceeds you will receive your homestead exemption, which you must reinvest in your new residence within six months of receiving the funds or give the money back to the Trustee.

To prevent this type of surprise or hiccup to your fresh start, you may file a Motion to Order the Trustee Abandon the Assets.  This Motion may be filed 30 days after your 341a hearing, when the time for the Trustee to object to your exemptions has passed.   

A Motion to Abandon forces the Trustee to evaluate whether there is non- exempt equity in your home using the value of your home on the petition date, less secured debt, less your claimed homestead exemption, if there is equity left over, then there is a sum certain of equity for the Bankruptcy Estate.  If there is no equity remaining, then the Trustee is ordered to abandon the asset, forever.   

As with other post petition tasks, you may choose to make this a DIY project or retain our office to file the Motion and obtain the Order.  If you would like to retain our services, please let us know so we may calendar the filing of the Motion for the proper time in your case. There is an additional fee for services, costs and court costs.  

To support the Motion you will need to provide our office with a recent appraisal of your home and the most recent current monthly statement(s) from your lender(s).  

EVERY YEAR:

Just as seeing the Dentist for annual or semi-annual checkups is necessary to keep your teeth healthy, an annual check up on your servicer is necessary to make sure your monthly mortgage payments are applied correctly and to prevent costly surprises.  

How can you up ‘check’ up on your servicer?  There is a new tool, a quick and easy letter, called a “Request for Information” letter.  For a template please click this link. http://files.consumerfinance.gov/f/201401_cfpb_mortgage_request-information-servicer.pdf

Be sure and include your name, property address and mortgage account number on your letter and send to the address for ‘information requests’.  This address is usually on your monthly mortgage statement or you can call your servicer for the address.  

The information request is for

  • What is the payoff balance of your loan
  • What is the principal balance of your loan
  • What fees, expenses or charges have been added to your loan
  • Is nay money held in suspense
  • How has your servicer applied your payments.

The Servicer must acknowledge receipt of your request within 5 business days.

The Services must provide responses within 30 business days.

Make this an annual event.  Mark your calendar. Make this request yearly.  Save their responses so you can find any unexpected changes and prevent a crisis.    

Each year you should send this Information Request to your lender(s).  You are asking for an accounting from the lender on how they applied the money you sent.  If something isn’t right you will know and can fix it. Here is a sample:

Date:

Via U.S. Mail

RE: Information Request for Loan :  [Your loan number]

Property Address: [Your home address]

 

I am writing to request the information described below in regard to the mortgage on my property at [Your home address].

[INSTRUCTIONS: Provide a full description of the information you are requesting. Be as specific as possible.]  

If you need to contact me to discuss this request, I can be reached at [Include the best contact information, which may be your home address, work or mobile phone, or email address.] 

 

Sincerely,

[Your name

Co-borrower’s name]

SHOULD I REAFFIRM MY MORTGAGE?

You can't and shouldn't reaffirm your mortgage debt. Every year, your mortgage lender sends you a statement of all the activity on your account. Send that report you each of the 3 major credit reporting agencies along with a "consumer statement" in which you state you have been current on all your mortgage payments per the attached report. That should do it.