Direct Mortgage Payments Are Not ‘Provided For’ in a Plan, Eleventh Circuit Holds
For the first time among the courts of appeals, two judges on an Eleventh Circuit panel held that direct payments by a chapter 13 debtor to a mortgagee are not “provided for by the plan” under Section 1328(a), even if the plan says the payments will be made directly.
However, all three judges agreed that a general chapter 13 discharge did not eliminate the debtor’s personal liability for a deficiency on a home mortgage.
The majority’s December 6 opinion by Circuit Judge Julie Carnes means that chapter 13 debtors with direct mortgage payments may have lost a battle, but they could have won a larger war.
Whether direct mortgage payments are made under a plan has greater significance in a related context. A chapter 13 debtor who has made “all payments under the plan” is entitled to a discharge under Section 1328(a). If the Eleventh Circuit’s holding with respect to debts “provided for by the plan” also applies to “all payments under the plan,” then a chapter 13 debtor who has defaulted on direct mortgage payments would still be entitled to a chapter 13 discharge shedding other debts that were provided for in the plan.
On the question of a general chapter 13 discharge, the lower courts are split on whether failure to make direct mortgage payments bars a chapter 13 debtor’s general discharge.
Related Stories
April 30, 2020
Chapter 13 plans can be extended up to 7 years 7 year Chapter 13. An…
April 29, 2020
Loan modifications under CARES Act. The law firm assists with loan modifications and mortgage relief…
April 18, 2020
Small business owners qualify for chapter 7 bankruptcy. The Coronavirus aftermath is destroying small businesses….
April 18, 2020
Glossary of Credit Terms 2-percent rule A rule of thumb to see if refinancing a…
Posted in: Debt & Bankruptcy
April 17, 2020
STEPS IN A BANKRUPCY CASE Mandatory Credit Counseling You must obtain a certificate from an…
Posted in: Debt & Bankruptcy
April 15, 2020
Convert a Chapter 13 to a Chapter 7 A chapter 13 client (currently in a…
April 14, 2020
April 14, 2020
How to file a bankruptcy book. This book discusses the “nuts and bolts” of getting a…
April 30, 2020
Chapter 13 plans can be extended up to 7 years 7 year Chapter 13. An…
April 29, 2020
Loan modifications under CARES Act. The law firm assists with loan modifications and mortgage relief…
April 18, 2020
Small business owners qualify for chapter 7 bankruptcy. The Coronavirus aftermath is destroying small businesses….
April 18, 2020
Glossary of Credit Terms 2-percent rule A rule of thumb to see if refinancing a…
Posted in: Debt & Bankruptcy
April 17, 2020
STEPS IN A BANKRUPCY CASE Mandatory Credit Counseling You must obtain a certificate from an…
Posted in: Debt & Bankruptcy
April 15, 2020
Convert a Chapter 13 to a Chapter 7 A chapter 13 client (currently in a…
April 14, 2020
April 14, 2020
How to file a bankruptcy book. This book discusses the “nuts and bolts” of getting a…