Sample Letter to Client about Agreed Order Default
Date
Debtor and Address
Re: Default of Agreed Order
Dear Mr and Ms Last Name:
I have received the enclosed letter stating that you have failed to maintain the arrangements of the Agreed Order with Creditor. If you have followed the Agreed Order, please provide proof of payment, and/or proof of insurance. Proof of payment must show who cashed the check or money order. Send this information to our office at the above address immediately. Otherwise, you will need to follow the instructions on the enclosed letter. Failure to make payments, or provide needed documentation will result in the automatic stay being lifted on your property. Once the automatic stay is lifted, your creditor can start foreclosure proceedings on your property. If you have any questions, please contact me immediately.
If this is the second notice of default that you have received, please be aware that most agreed orders state that your creditor is not required to send more than two notices, the third time that your payment is not received by them on time the stay will terminate and they will be allowed to deal with you directly. Please also be aware that while your creditor may have allowed you a grace period prior to filing bankruptcy most will no longer allow a grace period of any kind. Your payment will be considered late, and you in default if the payment is one day past its’ due date. If you are having a difficult time making the payments you might consider one of the options listed below.
(a).You have the option to sell the home. You would need to get a signed contract, and send it to the office so that we can get you permission from the Trustee.
(b)You have the option of surrendering the home. I understand that this would be a difficult decision; however, it may be the only way to get back on top of things.
(c) In the event that you do decide to surrender the home you should contact me immediately. It may be possible to convert your case to a Chapter 7. In a Chapter 7 Bankruptcy you do not make a monthly payment to the Trustee’s office and in approximately 90-120 days your case will be discharged along with all of your unsecured debt. One major difference is that you have to be completely current on all payments to your secured creditors (house, land, car, etc..) in a Chapter 7 Bankruptcy since there is no provision to pay them back and the secured debt cannot be discharged. If this is an option that you would like to discuss with us please contact us in writing as soon as possible.
(d) One other possibility would be to let your case get dismissed and re-file so that we can include all payments to secured creditors that you are currently behind on in the new plan. Again, if this is an option that you would like to discuss, please contact us in writing as soon as possible.
Sincerely,
Paralegal
Enclosure: Notice of Default
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