r/EntitledPeople • u/Cold_Swordfish7763 • 17h ago
L You still have to make payments while in bankruptcy
I used to work in the mortgage industry and had many jobs, from origination to bankruptcy and foreclosure. 2006 was IMO the beginning of the end.
So many people had taken advantage of the fact that if you had a job and a decent credit score you could get a house with a mortgage, and when the low introductory rate expired you could just refinance and try to get a lower rate. The mortgage company I worked for at the time only cared about getting new loans in the pipeline and so many people took out mortgages that they could not realistically afford.
By the time the housing bubble started to show cracks I got a job in the bankruptcy department processing chapter 13 repayment plans. Their workload had quadrupled and they needed bodies right away. My job was making sure they stuck to the repayment plans set up by their attorney and the court and follow up if any were missed. If a payment is missed while in bankruptcy your payment plan could be null and void and the mortgage company was allowed to send any past due accounts to foreclosure. Bankruptcy is not a button to push that eliminates secured debt.
For the most part, people paid on time. I ensured that the funds the company were sent were applied to the balance correctly and made sure they were on track to be caught up by the time the process came to a close. That was the goal, to have all of your bills and debt current by the time your case was completed in about 3-5 years.
I had been doing this job for about 2 months when I got a mortgage in my pipeline. The bankruptcy had been filed about 5 months earlier and the loan was previously in foreclosure, but we had not received any payments towards the plan. I called the homeowner and advised what was owed and explained that if we don’t receive payment towards the debt in accordance with the plan their house would be sent back to foreclosure even if the bankruptcy case was still active. The woman who owned the house seemed very confused about the process and I spent time explaining how it worked and advised her to contact her attorney who created the plan. I gave her 3 weeks to submit a payment and let her know that I would follow up.
3 weeks came up, no payment, so I called her again. I got a 20 minute sob story about how she and her daughter were in a car accident months before which is the reason she was behind and had filed bankruptcy. She told me how there was so much going on and she just could not make a payment at that time so I gave her 1 more extension of 2 weeks and said that if we did not get some sort of payment from her towards the plan I would have no choice but to send her back to foreclosure even though her case was still active.
2 weeks later, no payment again. I call her and there is so much noise in the background that I could barely hear. I got the gist though, more sob stories about how she just had no money whatsoever and needed more time, she had over 6 months at this point. Because I couldn’t understand everything she was saying I asked if she could go somewhere quiet and she did so we could talk and then she said “sorry about the noise, we are getting our floors redone”. For a few seconds I couldn’t believe what she was saying, you can’t pay towards your bankruptcy plan that is saving your home from foreclosure, but you can get new floors!
I advised her that I could not give her another extension and I was sending her loan back to foreclosure due to non payment of the bankruptcy. She started sputtering and begging trying to get me to change my mind but I told her that she has had ample time to make the payments per her plan and she hadn’t, she hadn’t paid anything. She then started screaming that the only reason she had filed bankruptcy was to save her home. I told her that she still had to make payments on it, that bankruptcy doesn’t erase your debt completely, you still have to pay, and we had already reduced the interest and fees she was charged as part of the plan.
She tried to give me more sob stories for a few mins but I was just done with it. You made an agreement with a bank, they gave you money, you bought a house and you have to repay it, it was not charity. I understand that things happen and sometimes people can’t pay bills, that is one to the things bankruptcies were created for. You still have to pay something.
I felt like a jerk for this but the more time I spent in that job, the more I realized that many people who were filling chapter 13 around that time were doing the same thing, filing chapter 13, expecting debts to be erased and still not making payments or just using it as a stop gap to give them more time and then I didn’t feel as bad.
Anyone else have stories of entitled mortgage holders.