Surprise Fees on Chapter 13

Watch out for this legal fee trap in Chapter 13
When Nan filed chapter 13 bankruptcy, her mortgage company hit her with a $1225 legal fee. Sadly, almost every home owner in Chapter 13 gets hit with a surprise fee. When you file Chapter 13, your mortgage company will charge you for their lawyer looking over your Chapter 13 plan and filing their court papers,  And usually they will send the bill to you. (On an official form, it looks like this.)
The mortgage company lawyer will look over your Chapter 13 papers. And you’ll be sent the bill.
Fannie Mae, the Federal enterpise that indirectly owns most bank issued mortgages, agrees $1225 is a reasonable fee to look at your Chapter 13 papers. In January and February 2026, I saw mortgage lawyers charge as low as $350 and as high as $1550.
Outside of bankruptcy if you get hit for a fee–like a late fee for example–most mortgage companies will let it just sit there until the end of the loan.
But in Chapter 13, in this court, if you get to the end of the plan and made all of mortgage payments on time–except for that $1225–your case is thrown out!! You are disqualified at the finish line.
Can we fight this?
I’ve tried fighting those fees with the judges here, without success. That’s pretty much true of every court in the country. But I saw that one of the top bankruptcy lawyers in Illinois, Karl Wulff, has lined up a case and says he’ll appeal it to the Fifth Circuit if necessary. If he gets a favorable circult court decision, other courts around the country would start to take a second look at it.
So How Can You Pay it?
So you are in Chapter 13, right? Your Chapter 13 plan assigns your entire “disposable income” to the Chapter 13 trustee. So, how are you supposed to come up with an extra $1225 to send to your mortgage company? I have no good answer to that. But do not let it sit until the end of your case. You gotta figure out how to pay it. 
 
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