Consumer Bankruptcy Journal Summer 2015 - Page 38

THE NECESSITY OF FILING PROOFS OF CLAIM FOR SECURED CREDITORS IN CHAPTER 13 By Nancy B. Clark Senior Attorney, Borowitz and Clark LLP O n December 1, 2011, Federal Rule of Bankruptcy Procedure 3002.1 entitled Notice Relating to Claims Secured by Security Interest in the Debtor went into effect. This rule requires claimants that are “secured by a security interest in the debtor’s principal residence”1 who are “provided for under Section 1322(b)(5) of the Code in debtor’s plan”2 provide notice of mortgage payment changes3 and notice of fees, expenses, and charges4 related to the underlying secured claim. The purpose of providing notice is to alert the debtor, debtor’s attorney and the chapter 13 trustee of additional charges related to mortgage loans and homeowner’s association fees during the chapter 13 plan term. By providing such notices, the debtor, debtor’s attorney and the trustee may object to or provide for those fees, expenses and charges during the chapter 13 plan term. In re Carr, 468 B.R. 806, 808 (Bankr.E.D.Va. 2012). Thus ensuring debtors a fresh start upon discharge. Prior to enactment of Rule 3002.1, it was not unusual for debtors to find themselves in foreclosure after receiving a discharge of their chapter 13 bankruptcy. In re Herrera, 422 B.R. 698, 712 (BAP 9th Cir. 2010). Secured creditors were reticent to provide debtors with notice of any escrow 1 2 3 4 38 FRBP 3002.1(a). Id. FRBP 30021.(b). FRBP 3002.1(c). CONSUMER BANKRUPTCY JOURNAL changes, mortgage payment changes, or notice of additional fees, expenses and charges accrued and added to the underlying loan during the chapter 13 plan term for fear of being found to be in violation of the automatic stay. FRBP 3002.1 requires secured creditors with a security interest in debtors residence to provide debtors with appropriate notices without fear of being sued for stay violations. In re Bodrick, 498 B.R. 793, 800 (Bankr. N.D. Ohio 2013)5. Determination of Fees, Expenses and Charges During the Bankruptcy FRBP 3002.1(c) states: The holder of the claim shall file and serve on the debtor, debtor’s counsel, and the trustee a notice itemizing all fees, expenses, or charges (1) that were incurred in connection with the claim after the &