MenuAlmost all residential mortgages require that the home be insured against causality, with the lender being a beneficiary. Such a requirement is not surprising. A residential mortgage involves lending a sizable amount of money, with the value of the home as collateral providing assurance to the lender of being repaid. Fire and other disaster risks the destruction of the collateral, and a bank would desire insurance for many of the same reasons an owner of a home free-and-clear would.
Arrearage
The amount of loan that is overdue for payment. Most frequently refers to a mortgage arrearage, which is paid explicitly in some chapter 13 plan where a mortgage default is being cured.
Synonyms:
Arrears
Frequently Asked Questions
Our frequently asked questions also address Arrearage:
What can cause a higher chapter 13 payment than initially proposed?
When filing a chapter 13 petition, a plan payment is calculated based on the figures included in the petition, and a plan is proposed by the debtor. In some cases, this payment will be confirmed by the court and may continue for the life of the plan. In other situations, changing the payment may be necessary to obtain plan confirmation. If the debtor changes his or her mind about what plan to pursue, e.g. the debtor decides to pay for a car instead of giving it up, the payment usually changes, and this is no surprise. However, other things can impact the payment, including:
Blog Posts
We have discussed Arrearage in the following posts on our bankruptcy blog:
Behind on the Mortgage: The Math of a Chapter 13 Cure
Dec 5, 2011
A significant power of chapter 13 bankruptcy is the ability to propose a plan that cures a default associated with a long-term debt, i.e. to catch up a delinquent mortgage so that it is once again current. Due to this, chapter 13 is an option frequently considered by families who have fallen behind on their home mortgage payments. Understanding the basics of how a cure payment is calculated is important for appreciating the value and constraints of chapter 13.
Chapter 13 Bankruptcy and the North Carolina Foreclosure Process
Sep 18, 2013
One common use of chapter 13 bankruptcy is prevent foreclosure of a home. Chapter 13 allows the owner/borrower to bring the loan current over a period of years and keep his or her house. When does one invoke the power of chapter 13 to prevent foreclosure?
