Car and Mortgage Loan Statements in Bankruptcy

When an individual files for bankruptcy relief, the bankruptcy court sends out a notice to all creditors, including your car lenders and mortgage companies, whether you are current or delinquent.  Post-filing of the case, you will likely not receive any mortgage statements as the companies transfer your account to their bankruptcy department.  They do not send you statements because it could be considered an act to collect on a debt and a violation of the automatic stay.  The same applies as to car lenders.  Note also that auto-pay arrangements may be discontinued.  It is up to the debtor in all cases to keep track of who they paid, when they paid, and the amount of the payment. Basic Recommendations in the Different Types of Bankruptcy Cases In Chapter 7, continue to make your monthly mortgage and car payments unless you are going to surrender your home or your car. In Chapter 7 there is no trustee to take your payments.  You are responsible to keep your payments current if you are keeping the respective vehicle or real property. The purpose of most Chapter 7s is to wipe out miscellaneous consumer debt such as credit cards and medical bills.  You cannot eliminate mortgage payments or car payments if you are going to keep the house or car.  As stated above, you do have the option to surrender and walk away from any secured debt obligation like a car loan or a home mortgage.  The down side is that you will no longer have the car or the real property. In Chapter 13, continue to make your post-petition mortgage payments, unless you are going to surrender your home. For those that are in arrears as of the date of the bankruptcy filing, the Chapter 13 Trustee can cure the arrears as part of your chapter 13 plan payment.   You will have to ensure and provide evidence that you are keeping the mortgage current thoughout the case.  If your car loan is being paid as part of your Chapter 13 plan, you do not have to make the monthly payment as it is part of your monthly plan payment. If you are making direct payments then make your payments as you did before – same due date, same mailing address- regardless of whether or not you receive a statement.  Also you must keep your property insured.  Once your discharge is entered, you may begin to receive statements again depending upon the financial institution. David A. Arietta, Esq. can give you more guidance.  Call him at (925) 472-8000. For more questions about bankruptcy, visit our FAQ page.