Debtors who file bankruptcy oftentimes complain about the fact that after they file their mortgage companies or car finance lenders stop sending monthly billing statements for fear of violating the automatic stay provisions of the Bankruptcy Code.
Now, under a recent case out of Massachusetts, In Re Penny L and Jason A Sperry, 2016 WL 7167869 (Bankr. D. Mass. 12/8/16), these lenders must send the statements. In this case. the Chapter 13 debtors proposed a cure and maintain plan with specific language stating that the creditor (here a mortgage company) shall send the debtors monthly mortgage payments consistent with its prepetition practice. Of course, HSBC, the lender, replied that it could not comply internally and logistics limited it from complying.
The Court held that the Bankruptcy Code does not prohibit and arguably permits sending post-petition statements under section 1322(b)(11). In Maryland there is a Local Rule that allows secured creditors to send monthly statements to debtors. Accordingly, there is no excuse for these lenders for not sending monthly statements to their Chapter 13 clients.
If you are considering filing for bankruptcy, please contact us. The firm of Laura Margulies & Associates, LLC has successfully handled thousands of cases in Maryland and Washington, D.C., many involving unique or novel issues. Please contact us today for a consultation at (301) 816-1600. Our website address is: www.law-margulies.com