In re Carr, 06–11472–RGM.

• Decision Date: 19 March 2012
• Docket Number: No. 06–11472–RGM.,06–11472–RGM.
• Citation: 468 B.R. 806
• Court: U.S. Bankruptcy Court — Eastern District of Virginia
• Parties: In re Sandra D. CARR, Debtor.

468 B.R. 806

In re Sandra D. CARR, Debtor.

No. 06–11472–RGM.

United States Bankruptcy Court, E.D. Virginia,Alexandria Division.

March 19, 2012.

Tommy Andrews, Jr., Tommy Andrews, Jr. PC, Alexandria, VA, for Debtor.

Thomas P. Gorman, Alexandria, VA, Chapter 13 Trustee.

Abby K. Moynihan, McCabe, Weisberg & Conway, Laurel, MD, for American Home Mortgaging Services, Inc.

MEMORANDUM OPINION

ROBERT G. MAYER, Bankruptcy Judge.

The question presented in this case is whether a creditor may charge a debtor a fee for filing the required response to the chapter 13 trustee's Notice of Final Cure Payment required by Fed.R.Bankr.P. 3002.1(g).

The debtor filed her chapter 13 case on December 6, 2006, and successfully completed her plan. At the commencement of the case, she was in arrears in the payment of her home mortgage. The arrearage was cured during the course of her case. In accordance with Rule 3002.1(f), which became effective December 1, 2011, the chapter 13 trustee filed his Notice of Final Cure Payment. The creditor's response to the chapter 13 trustee's notice showed that the debtor had cured the default on the creditor's mortgage and was current with respect to all post-petition mortgage payments. In fact, the creditor filed two responses. One was on the prescribed form, Form B 10 (Supplement 2), “Notice of Postpetition Mortgage Fees, Expenses and Charges,” and filed in the claims register as a supplement to the proof of claim. The second was filed as a pleading in the court's docket and titled “Response to Notice of Final Cure Payment”. Both were prepared and filed by counsel for the creditor. Counsel stated that in preparing the documents, she reviewed the debtor's loan history and the pre-petition arrearage to determine whether all cure payments had been made as required and prepared the two documents. The creditor asserted an additional fee of $150.00 for the preparation of the two documents. The trustee objected to the additional fee.

Administration of home mortgages of debtors in bankruptcy and post-petition fees have caused considerable problems over the years. For example, some creditors did not advise debtors of the change in loan payments when escrow requirements or adjustable rate mortgage payments changed. The resulting insufficient payments caused some creditors to file a motion for relief from the automatic stay asserting a post-petition default and others, if no action was taken during the case, to assert an arrearage after a debtor faithfully completed his plan over the requisite three- or five-year period. Needless to say, in the latter instance, a post-petition arrearage as of completion of a chapter 13 plan did not effectuate one of the goals of chapter 13, to provide a means to cure mortgage arrearages. Neither the debtor nor the creditor was well served in such circumstances. See In re Wright, 461 B.R. 757 (Bankr.N.D.Iowa 2011) (Sanctions sought in connection with change in loan payment). Some debtors sought to avoid these problems by seeking to impose requirements in the chapter 13 plan on lenders to provide information during the pendency of the case or be barred from asserting any additional fees or post-petition default. In many instances, these additional requirements were not allowed. See In re Duke, 447 B.R. 365 (Bankr.M.D.Ga.2011); In re Jackson, 446 B.R. 608 (Bankr.N.D.Ga.2011). Creditors faced the request for sanctions at the conclusion of cases arising from these loan administration problems. See In re Mattox, 2011 WL 3626762 (Bankr.E.D.Ky.2011) (ten-count complaint against a servicer relating to post-petition charges).

In recognition of the difficulties, the Supreme Court promulgated Rule 3002.1 of the Federal Rules of Bankruptcy Procedure. The rule requires notice of payment changes and other charges and provides a procedure to draw a bright line at the conclusion of a case as to any amounts that may remain due to a creditor relating to the cure payments or payments due on a mortgage during the pendency of the chapter 13 case. The latter process starts with the chapter 13 trustee filing a Notice of Final Cure Payments. Rule 3002.1(f). The creditor must respond to that notice by acknowledging that it is correct, or if it is not correct, stating with particularity the amounts that remain unpaid. Rule 3002.1(g). If the debtor or the trustee contests the creditor's claim for unpaid amounts, the debtor or the trustee must file a motion to determine whether the debtor has cured the default and paid all required payments and fees. Rule 3002.1(h).

That procedure was followed in this case. The parties agree that the debtor cured her pre-petition arrearage and made all post-petition payments through January 26, 2012. However, the creditor claims a post-petition fee of $150 for preparing its response to the trustee's notice.

Through an apparent abundance of caution, the creditor responded to the trustee's notice twice, once by filing both a supplement to its proof of claim on the Official Form and a second time by filing a pleading. Both recite the same information. The purpose of ...