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

[Sheila Schwager]

The creditor is secured. How is that a preference? 

Sent from my iPhone

> On Feb 18, 2020, at 6:06 PM, Matthew Christensen <mtc at angstman.com> wrote:
> 
> 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. 
> 
> 
> 
> Best regards,
> 
> HOLLY ROARK
> 
> Attorney at Law 
> 
> Certified Bankruptcy Specialist -
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> By the State Bar of California Board of Legal Specialization
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