When filing for bankruptcy and owning a home, it is important for a debtor to understand they will still have an obligation to the mortgage lender. With Chapter 7 bankruptcies the obligation is fairly obvious, the debtor will continue to make the normal monthly mortgage payment to the lender, but in a Chapter 13 bankruptcy, the debtor’s obligation may be less obvious.
If you are in a Chapter 13 bankruptcy, the expectation is the debtor will remain current on any mortgages they have on the home. According to the bankruptcy code, specifically Federal Bankruptcy Rule 3002.1, debtors must be timely notified of any fee adjustments, and failure to comply can result in penalties. If the debtor does not remain current on the mortgage payment the mortgage lender can motion the court to lift the stay so the lender can proceed with collections measures, which usually means initiating a foreclosure proceedings..
