Dear Bankruptcy Adviser,
I filed Chapter 13 about eight months ago because I was three months behind on my mortgage payments. The plan has me paying the trustee a certain amount each month for the next five years — some to my lawyer and some to the mortgage company. I also send each month my regular mortgage payments to the mortgage company via Western Union. Now they want a relief from automatic stay because of nonpayments for the last three months; I have all my Western Union receipts for the last two years. Should I worry?
— Russell

Dear Russell,
You definitely need to be worried. The lender is claiming that you are not making your payment, that the payment you are making is not enough, or that the trustee has not been making the payment. The lender is asking the court for the right to take your home out of bankruptcy protection in order to continue or start the foreclosure process.

This is called seeking relief from the bankruptcy stay. The stay occurs when you file your bankruptcy case. This prohibits the creditor from continuing with any legal action against you (the debtor) or against your property. A creditor can ask the judge to lift the stay and permit some action against the debtor (you) or the property of the estate (your home). If the motion is granted, the moving party (the lender) is free to take whatever action the court permits.

In layman’s terms, the lender is asking the court for the right to take your home. And you need to show proof that you have been making all payments. Lenders do make mistakes, but the burden is now on you to fix that mistake, if one did happen.

At this point, you or your attorney have two options:

File a response. You can file a response to the mortgage lender’s motion. In that response, you will have to show proof that you are current on all payments since your case has been filed.

I very specifically, in writing, tell all my clients they must save a copy of every single payment made to the court and to all lenders from the date the case is filed until the date of the final payment. The lenders should keep good track of payments, but sometimes payments get lost or sent to the wrong department. You need to be the final guarantor that all payments have been made.

Work out an agreement with the lender. This is called an Adequate Protection Order, or an APO. This means you agree that you are delinquent on the payments, but will be able to bring those delinquent mortgage payments current in a specific period of time.

Most of the time, the lender will grant this request and withdraw the motion. Sometimes the lender will refuse to grant this request. In those cases, you will have to file a response to the motion and ask the judge to allow for an APO.

You must adhere to very specific deadlines. Failure to comply will mean that the mortgage lender is correct. And there are very few second chances at this point. You must act immediately.

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