I Filed Chapter 13, But Noticed A Bankruptcy Fee On My Mortgage Statement!

27 Jan I Filed Chapter 13, But Noticed A Bankruptcy Fee On My Mortgage Statement!

Well, actually you should not be getting any mortgage statements during your Chapter 13 case. But this technical violation might help remind you to make your monthly payments. Even better, this technical violation may provide you the “smoking gun” of evidence that your creditor is violating bankruptcy laws.

There should not be any Bankruptcy Fees charged by your lender, unless specifically authorized by the Bankruptcy Court. To start, most Notes, Deeds of Trusts, and Mortgages, do not provide for Bankruptcy Fees unless specifically necessary to protect their security interest. Typically, bankruptcy does not meet this qualification.

Moreover, 11 USC 506 of the Bankruptcy Code only allows such fees only if: 1) Such fees are in the contract, 2) Such fees are reasonable, and 3) The collateral has a value higher than the underlying claim……in other words, there is equity.

Also, the proof of claim will many times fail to disclose any such fees. While Courts across the United States are split as to whether such disclosure in a proof of claim may be a proper way of seeking fees, most courts are unanimous that the fees still must be reasonable nevertheless.

Finally, such fees must be disclosed pursuant to Bankruptcy Rule 2016(a), which basically states that any party seeking compensation from the estate must disclose all the fees they are seeking and whether they are sharing such fees.

Failure to properly seek fees may be a slam dunk automatic stay violation under 11 USC 362. Such a violation will allow one to recover actual damages, sanctions, attorney fees and costs, and punitive damages in some cases.

So check the billing statements you receive from your mortgage company every month while you are in Bankruptcy. There really should be no fees. If you see any, chances are that lender is illegally attempting to collect a fee without Court approval. If that is the case, you have specific rights against that creditor and should talk to your attorney immediately!

Just this past week, GMAC attempted to collect $359.50 from my client for Bankruptcy Fees. It was never blessed by the court, nor even disclosed. My client only found out after seeing the strange fees on his mortgage statement. He showed it to me, and the next day I showed GMAC his lawsuit!

Written by Michael Doan

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