Changes to Bankruptcy Rule 3002.1 Affect Mortgage Lenders

Thursday, December 15, 2016

Almost every year, changes are implemented to the Federal Rules of Bankruptcy Procedure. On December 1, 2016, this year’s changes to the Bankruptcy Rules went into effect. The changes include revisions to Bankruptcy Rule 3002.1.

Bankruptcy Rule 3002.1 requires secured creditors with an interest in the debtor’s principal residence, such as mortgage lenders, to periodically file notices of payment change in Chapter 13 cases. The changes to Bankruptcy Rule 3002.1 clarify when a secured creditor must file a payment change notice. The amended rule requires that a secured creditor file a payment change notice on all claims secured by the debtor’s primary residence for which a debtor or Chapter 13 Trustee is making post-petition payments during the bankruptcy, regardless of whether the debtor is curing a pre-petition mortgage.

Additionally, the amendments to Bankruptcy Rule 3002.1 clarify that the obligation to file a payment change notice ceases once the creditor obtains relief from the automatic stay.

Preti Flaherty frequently represents creditors in bankruptcy cases in Maine, Massachusetts and New Hampshire. For assistance with claims in bankruptcy cases, contact Preti Flaherty’s Bankruptcy, Creditors’ Rights & Business Restructuring Practice Group.

Bodie B. Colwell practices as an associate with Preti's Bankruptcy, Creditors’ Rights and Business Restructuring group from the Portland office. She focuses on supporting bankruptcy, insolvency, and creditors’ rights clients.

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