My Google Alert popped up a lovely win for a Chapter 13 homeowner , but all I could see was the train wreck that lies ahead. The bankruptcy court ruled that the confirmed (and completed) plan trumped a late-filed mortgage proof of claim. Payment of the amount provided in the plan cured the prepetition arrearage. I'm on board so far. But I doubt this resolution will be the last dispute on the matter. The bankruptcy court fight Here's how it came about. The debtor listed the mortgage arrears at $5000 in the Chapter 13 plan. The lender's tardy claim, filed a year late, put the arrears at double that amount. No one noticed or addressed the discrepancy when it arose. At plan's end, the trustee objected to the lender's secured claim. And the lender argued that its lien entitled it to the unpaid prepetition arrears. After argument and briefing, Judge Bohm held that "any action to collect or enforce a claim for delinquent prepetition arrearages inconsistent with the … [Continue reading...]
