[CLBS] Any issues with reinstating a mortgage right before filing Ch 7 or Ch 13?

[Matthew Christensen]

Wouldn't it be a preference payment?  They're obviously behind, so it's not an "ordinary course" payment, and there's no new value being provided by the lender - the value was already paid.  I think there's a risk the Trustee pursues it as a preference (or the Ch. 13 Trustee wants that amount included in what has to be paid to creditors through the plan).  

Maybe I'm looking at it wrong.

MTC


Matthew T. Christensen 
 (208) 384-8588 
mtc at angstman.com 
  
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-----Original Message-----
From: CLBS <clbs-bounces at admws.idaho.gov> On Behalf Of Holly Roark
Sent: Monday, February 17, 2020 6:40 PM
To: CLBS at admws.idaho.gov
Subject: [CLBS] Any issues with reinstating a mortgage right before filing Ch 7 or Ch 13?

Debtor is in arrears $28K in mortgage and has saved up enough employment income to fully catch up. There may be excess equity in the property above the homestead by about $10K, according to Zillow, which is probably on the high end. Will reinstating the mortgage and paying the lender $28K prior to filing Ch 7 or Ch 13 cause an issue for the debtor in either chapter?  This is a CA case. 

 

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HOLLY ROARK

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