My question involves bankruptcy in the state of: Tennessee.
I am a (now) single mother of four in an extended 60-month chapter 13 plan with payments automatically deducted from my payroll with plan payments at 70%. The extended part is because of an order that never made it to my payroll department which took my original final payment from October 5, 2012 to approximately April 2013. My question is, how long does it take from pay off to actual discharge? The trustee’s office says about 10-14 business days, but my attorney says a month or more. Can I expedite this time?
Background: When I filed in 2007, I had two mortgages with WAMU - both included in the plan, but only the first was confirmed by WAMU. From what I understood from the attorney's office, the attorney would file on behalf of WAMU for the second mortgage. For a year and a half I followed up to see if this had been done because the Trustee's status report showed no payments. For the same year and a half I was told that it would be done, "don't worry". Well, two years and three months into the case I was worried, so I went to the attorney's office for yet another face-to-face to figure out what was going on and how to get it done. All new staff and working on getting it done. Finally it was filed. However, all of the payments kept being returned to the Trustee's office. Jump about nine months and now Chase owns the WAMU assets. Here is where it gets more interesting.
Chase said they only have first mortgage records, none on the second, however they started receiving money on the second. After yet another year, Chase attorneys and mine agree to release the lien on the second at discharge with them retaining the monies paid in. No problem, releasing the lien is great since the house was underwater by the time this occurred anyway. Because the first was an ARM, apparently ARM change notices were not received or ignored by the trustee's and my attorney's office, so after much back and forth on the calculation (because NONE of the documentation submitted by Chase matched each other, much less what was being sent to me, the attorney, and the trustee), an amount was agreed upon and I was told payment increase needed to be ordered.
By this time, everything else had been paid out at the 70% (except the car and house of course, paid at 100%), so I did not understand why there was a need for an increase in the payment. I voiced my objection in writing and verbally, even suggesting an alternate start time, but was told that a payment order would be issued anyway to begin in January of 2012. I just went with it. However, my company never received an order, and in August, two months shy of discharge, I get an email from my attorney’s office stating that the order had not been sent to the company and thus the 13 would be extended by about 8 months to account for the catch-up order. Of course, I was livid – once again, due to no fault of my own, I was subject to the mercy of a lax administrative body.
With all of that, in March 2012 I found out some horrific items about my husband and immediately found a divorce attorney. I cooperated with the local authorities and he finally turned himself in on May 14, 2012. Due to the nature of his crimes, my four children and I became increasingly uncomfortable with remaining in the house we had finally been able to purchase a couple of years prior to the bankruptcy, so I put a FSBO notice on a few sites and had a buyer in a few weeks.
I flip-flopped for a few weeks between whether to rent it or to sell it since the buyer had lost a contract and was saying that he was not sure if he would be able to go through with the terms. Finally, he came through and said he was ready to proceed along the original terms which would put us at closing 11/30/2012.
During this time, at my attorney’s guidance, I contacted a title attorney to ensure that I would be able to close with the second mortgage lien not being released until discharge. I was told it would be and we proceeded to get a court order to allow the sale. The sale amount kept me under the homestead exemption, so everything looked fine. On the day that the motion to approve the sale was heard, the title attorney came back and said that we would not be able to close even though it was my intent (and per my chapter 13 attorney) to payout with the sale proceeds unless it was with a title exception for a few weeks if financed; the bankruptcy was discharged; or the bankruptcy was paid out. Since the payout amount was so little and his family is already emotionally invested in the house, the buyer generously decided to pay out my bankruptcy – a wonderful thing. There were some additional court costs on top of that which I had to pay, but it got paid.
Obviously the buyer did this so that he would not have to wait an additional three to five months to purchase as he and his family are hoping to be in before Christmas – they are cleaning and painting now via a temporary lease agreement for improvements only. I am out of the house and do not want anything else to do with it, but need the closing proceeds to pay some of my living expenses. And yes, I know it may seem silly to move before all the ducks were in a row, but my family’s mental health is much more important to me than prudence in this instance – we had to get out of there and start healing.

