03 Oct Practice Note: South Carolina Court Approves 524(i) Plan Language
In the case of In re Ballard, Case No. 07-3203-jw (Bankr. D.S.C September 13, 2007), the South Carolina Bankruptcy Court has approved language for use in Chapter 13 plans regarding the provisions of 11 U.S.C. section 524(i). The language approved by the court for use in the form plan prescribed by local rules in effect in the district is as follows:
Confirmation of the plan shall impose a duty on the holders and/or servicers of claims secured by liens on real property to apply the payments received from the trustee on the prepetition arrearages, if any, only to such arrearages; to deem the prepetition arrearages as contractually cured by confirmation; to apply the direct mortgage payments, if any, paid by the trustee or by the debtor(s) to the month in which they were made under the plan or directly by the debtor(s), whether such payments are immediately applied to the loan or placed into some type of suspense account; to notify the trustee, the debtor(s) and the attorney for the debtor(s) of any changes in the interest rate for an adjustable rate mortgage and the effective date of the adjustment; to notify the trustee, the debtor(s) and attorney for the debtor(s) of any change in the taxes and insurance that would either increase or reduce the escrow portion of the monthly mortgage payment; and to otherwise comply with 11 U.S.C. Section 524(i).
The language is modeled on that in use in the Western District of North Carolina. While not as expansive as that originally proposed by the attorney for the debtor in the case, the Ballard decision allows the debtor’s bar to add such language without engendering an automatic objection to the plan by the trustee.
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