Effective July 1, 2015, we are making changes to the Court’s Mortgage Modification Mediation (MMM) Program. The new program will require debtors to use the “documods” program ($40) to prepare the required loan modification package PRIOR to filing the Motion to participate in the program. After preparing the documods documents, the debtor will file the Motion to participate, and the lender will have 14 days to object. If no objection is filed, the MMM Order will be entered, the mediator will be appointed, and the process will continue as under the existing program.
If a lender timely objects to the Motion, the Court will hold a hearing, at which the lender can explain why it does not wish to participate in the program. The Judges have agreed to urge lenders to try the program, rather than object because they prefer to use their own loss mitigation programs.
The new form of Motion and Order is on our website: www.wieb.uscourts.gov, and I urge you to review the new documents and contact Sean McDermott with any questions or comments you may have. These documents have been reviewed and revised by our “MMM Committee” but we are certainly open to suggestions and comments from the bankruptcy bar.Susan KelleyUSBJ
- If a creditor files a notice of appearance, it means that they intend to have a more active role in your bankruptcy case than normal. More, of course, is a relative term. In basic, no-asset Chapter 7 cases, most creditors assume no role whatsoever in your bankruptcy proceedings.
- A notice of appearance is often just a way for a creditor to receive electronic notices instead of conventional notices by mail. It also usually means that an attorney for the creditor is keeping an eye on the case.
- Sometimes, a notice of appearance is an indication that a creditor has hired an attorney (who needs to get himself or herself added to the list of people who receives notices in your bankruptcy case) so that they can file motions or objections.
- Less often, a notice of appearance is filed when a creditor actually intends to make an appearance at your meeting of creditors or some other judicial hearing.
- When your bankruptcy case is filed, an automatic stay goes into effect that stops most collection actions, including wage garnishments, repossessions, and foreclosures. If someone is filing a motion for relief from the stay, they are asking the court for permission to be exempt from the stay so they can proceed with certain actions.
- 99% of the time, these motions are filed by secured creditors who are seeking to foreclose your home or repossess your car.
- If your intention was to surrender the collateral, then there is nothing that you need to do. The motion for relief is a mere formality so the creditor can proceed to exercise its security rights.
- If your intention was to retain the collateral, talk to your attorney immediately! You only have 14 days to object and figure out how to save the collateral.
- In Chapter 13 cases (and in Chapter 7 cases where a trustee is distributing assets), the trustee is required to file this notice to formally announce his intent to pay or not pay certain claims that creditors have filed.
- Generally speaking, the trustee will pay all claims filed unless the claim was filed after the deadline to file claims or if a judge rules that a claim is disallowed.
- The trustee may file a notice like this several times throughout your bankruptcy case if claims are amended, withdrawn, or supplemented.
- Throughout the life of a Chapter 13 Bankruptcy case, it is common for your mortgage payment to adjust due to variable interest rates or changes in your escrow payments.
- Sometimes, your mortgage lender will charge additional fees – which they are allowed to do pursuant to the terms of the mortgage – for certain activities such as appraisals, property inspections, or legal fees.
- Although they have always had these abilities, a relatively new procedural rule now requires the mortgage companies to file a notice with the bankruptcy court and serve a notice on you. This helps your attorney and the trustee stay updated about changes in your mortgage that has the potential to have an impact on your bankruptcy case.
Stated another way, the Chapter 7 discharge is “good against the world,” including unscheduled creditors. The discharge is said to be good against the world in the sense that it applies to all unscheduled debts except those that are expressly made nondischargeable by § 523.
When trying to provide notice or service of process to creditors, debtors’ ability to do so properly becomes difficult in a world where creditors have a couple dozen similarly-named subsidiaries or shell companies in existence, and they have hundreds (if not thousands) of offices scattered throughout the country. Debtors’ counsel find themselves trapped in an absurdly comical game of hide-and-seek, trying to pin down elusive creditors that seem to deliberately hide behind complex and opaque corporate structures. The point of this presentation is to TRY to un-muddy the waters somewhat.
Debtor shall use the address appearing on any two or more communications (e.g. billing statement, collection letters, etc.) received in the 90 days prior to filing the bankruptcy case. 90 day period does not apply to creditors who would be in violation of non-bankruptcy law by sending communications, in which case, the address appearing on the two most recent communications shall be used. 11 U.S.C. § 342(c)(2).
Although the creditor has a duty to terminate and reverse damages resulting from a stay violation, it could not be sanctioned for willful violation since it was not noticed pursuant to § 342 (appears that notice was sent to addresses appearing on a credit report). In re Tillett, 2010 Bankr. LEXIS 1342 (Bankr. E.D. Va. Apr. 23, 2010).
[…] a filed proof of claim shall stand as a notice of preferred address from the creditor. Fed. R. Bankr. P. 2002(g)(1).
“While no summons is issued and served upon the “defendant” in a contested matter, service of a pleading initiating a contested matter is made in the same manner as service of a summons and complaint in an adversary proceeding.” Dean v. Global Fin. Credit, LLC (In re Dean), 359 B.R. 218, 221 (Bankr. C.D. Ill. 2006).
Summons and Complaint shall be served in a manner authorized by FRCP 4, all subsequent documents and pleadings shall be served in a manner authorized by FRCP 5. In addition to FRCP 4, summons and complaint may be served by first class prepaid postage in the following manner:
Domestic or Foreign Corporation, Partnership, or Unincorporated Association: address to an officer, managing agent, general agent, authorized agent by law, or authorized agent by appointment. If agent is authorized by statute and the statute requires, also address to the defendant. Fed. R. Bankr. P. 7004(b)(3).
Insured Depository Institution (any FDIC-insured bank or savings association): address to an officer of the institution by certified mail, or first class mail to its attorney if the attorney has made an appearance. Confirm FDIC-insured status at http://www3.fdic.gov/idasp/. This requirement can be waived by court order in response to an application, or by the creditor’s voluntary waiver. Fed. R. Bankr. P. 7004(h).
Complex corporate structures – different entities with similar names. The following is a basic corporate structure glossary. There are many names given to different organizational structures, depending on ownership, holdings and purpose. It is important to keep in mind that an organization is either a formally organized entity, or it is not. If it is formally organized, there will be a designated agent for service. Parent. A formally organized entity that holds an ownership interest in another entity (subsidiary). The Parent company may have its own line of business, which may or may not be related to the business of the subsidiary. Subsidiary. A formally organized entity that is owned, at least in part, by another company (parent). In large corporate structures, a subsidiary might also be a parent company for another company down the line. Holding Company. A formally organized entity that exists primarily to own other companies. Similar to a parent company, but usually without its own line of business. Division. Usually (but not always) an informally organized part of another company. The division may have its own books and records, but is usually not formally organized (no filing with the State. If you are dealing with a company that is called a division, there is usually another company name that you will need to find. For example, “ABC, a division of XYZ Corp.”Shell or Dummy Company. A formally organized entity that will usually not have any assets of business of its own. These sorts of companies are used to shield information regarding ownership, holdings, etc. It is important to realize that these entities are actual companies, at least on paper. Corporate existence can be challenged based on inadequate capitalization and other grounds, but that is an expensive fight, and may not be relevant from a debtor’s standpoint.
When serving a mortgage company on a contested matter or adversary proceeding, it’s helpful to know who’s who in the industry to know whose conduct is at question or whose rights are sought to be modified.Mortgage Originator – the lender whose name appears on the mortgage and note (remember, the mortgage establishes the real estate as security for the loan; the note is a promissory note outlining the terms of loan repayment).Mortgage Holder – present owner of the mortgage; has the right to foreclose.Note Holder – present owner of the note; usu. (but not always) the same as the mortgage holder.Mortgage Servicer – party that accepts payment on behalf of the note holder, also responsible for holding / distributing escrow funds.
Not sure who’s who in your particular mortgage? Send a Qualified Written Request under RESPA to the mortgage servicer. 12 U.S.C. § 2605(e).