What happens when a debtor falls behind on postpetition mortgage payments in Chapter 13? One option is to try to roll postpetition arrears into an amended plan. Both the Fifth and Eleventh Circuits have held that postpetition defaults may be cured through a Chapter 13 plan modification, see In re Hoggle, 12 F.3d 1008 (11th Cir. 1994); In re Mendoza, 111 F.3d 1264 (5th Cir. 1997). Given the language of Section 1322(b)(5) allowing the cure of any default and the existing case law, such cure attempts should probably be granted as long as the amended plan is feasible. However, these cure attempts often happen in the context of relief from the automatic stay motion, which can be granted for “cause.” Therefore, the discretion of a bankruptcy judge can be exercised in ways that vary widely when it comes to allowing or denying such cure attempts of postpetition arrears.
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