29 Oct Jones Versus Wells Fargo Addresses The Rights Of Debtors In Bankruptcy Part Six
There is no doubt that In re Jones clarifies, at least in the Eastern District of Louisiana, the procedure for the application of plan payments and payments made “outside of the plan”.
However, it has also become immediately apparent that Jones has raised several unanswered questions.
As an example, a Chapter 13 client contacted me about two weeks ago to advise that she was in the process of refinancing her home but the new lender could not get a payout from the current lender. When I contacted the new lender to determine the issue I was advised that the current lender maintained it was entitled to post confirmation attorney’s fees and costs. A review of the record revealed only the original claim of the current lender and no supplemental claims for additional attorney’s fees and costs.
Upon speaking with the current lender I was advised that they were in the process of filing a claim for the additional fees and costs.
So the questions are: 1) Is a claim that is made only after a debtor seeks refinancing a timely claim? We will most certainly object that it is not timely, but, 2) How long should a creditor have in order to bring a claim for alleged post confirmation costs and fees? 3) Should a creditor be able to sit back and wait until the debtor seeks refinancing to file its claim thereby causing a delay in the refinancing process and also adding new costs and fees that make the refinancing impossible? 4) When does the debtor become prejudiced by the delay in filing a claim for additional fees and costs?
These are questions that will no doubt result in additional litigation for at least months, possibly years to come.
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