Tag Archives: payment

National Mortgage Settlement Payments Begin Today

Bank checkBorrowers who lost their homes to foreclosure at the height of the mortgage crisis and submitted a valid payment claim form through the National Mortgage Settlement will receive a check this month for approximately $1,480. This exceeds the minimum payment of $840 that was indicated on the claim form.

Checks go out beginning today, June 10, 2013, and will be completed by June 17, 2013.

Who Will Get Checks?

Eligible borrowers had their mortgage serviced by one of the settlement’s five participating mortgage servicers (Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo), lost their home to foreclosure between January 1, 2008 and December 31, 2011, and submitted a valid claim. (To learn more, see National Mortgage Settlement: Can You Benefit.)

How Much Will You Get?

The payment amount is uniform for all eligible claimants throughout the country, however a few borrowers will not receive a check in the initial mailing or will receive a split payment in the following circumstances:

  • If you are divorced or separated from a co-borrower and no longer live at the same address, you will receive a check for less than $1,480. The payment will be split evenly between the borrowers.
  • If you submitted a claim form, but do not have a valid Social Security number on file, payment will be delayed while tax-related issues are addressed.
  • Two mortgage servicers recently provided information on an additional 31,000 borrowers, and as a result, they were unable to be included in this distribution. These consumers will receive a notice and have the opportunity to submit a payment application later this summer.

Every borrower who filed a claim will receive a letter regarding their outcome. If you have a question about your claim or payment, call the settlement administrator, Rust Consulting, at 866-430-8358. The deadline to file a claim was January 18, 2013.

Keep in mind that the National Mortgage Settlement and Independent Foreclosure Review (IFR) settlement are different, though Rust Consulting is the administrator for both settlements. IFR payments began in mid-April of 2013 and the final payments will be sent in mid-July. For more information on the IFR settlement, go to www.OCC.gov and click on “Independent Foreclosure Review.”

by Guest Blogger Amy Loftsgordon

Paying a Debt Previously Discharged in Bankruptcy

ASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Dear Leon: 

As you may remember, you represented me in a Chapter 7 bankruptcy some time ago. I am now back on my feet and would like to pay a balance that I owed to my dentist prior to my bankruptcy. I included this debt in my bankruptcy, and it was discharged. 

Once I pay the debt off, is there some way to include in my bankruptcy records that I paid the balance or that it was satisfied post-bankruptcy?  Also, I’d like this to be reported on my credit report.

— Stephen

Dear Stephen:

It’s good to hear from you, and yours is a good question. Here’s my two-part answer.

You Cannot Record the Payment in Your Prior Bankruptcy

Your bankruptcy court papers contain a record of the debts you owed on the date you filed bankruptcy. Whatever payments you make after the bankruptcy is not a function of your case. There is no procedure for reporting the payment of this debt to the bankruptcy court.

Your Dentist Bill and Your Credit Report

Not all creditors report payment information to the credit reporting agencies. Generally, only financial institutions and debt collectors report debt payments. Your credit report will also usually include debts reflected in public records, such as court judgments and tax liens.

Many businesses don’t want to waste the time or money (or risk potential liability of incorrect reporting) to report to credit bureaus. As a result, it’s extremely unlikely that your delinquent dentist bill appeared on your credit report.

If, however, your dentist sued you and got a judgment for the debt, that judgment will appear on your credit report for 10 years. But your report must also reflect that the debt was “discharged in bankruptcy” and that the current balance due is $0.

(To learn more about what information appears on your credit report and how long negative items can be reported, see Nolo’s Credit Reports & Credit Scores area.)

Should You Pay Your Dentist?

The bankruptcy law specifically says that you can still pay any debt, if you want to. From your question, it sounds like you have decided to pay the dentist, but have not yet done so?

Good reasons to pay your dentist are because the dentist did a great job for you, and perhaps you would like to return there. A bad reason is because you think it might improve your credit rating — the payment of a discharged debt will not do that.

-Leon

Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

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