Chapter 13 Debtors Must Pay All Payments under a Plan to Receive a Discharge, Including Post-petition Mortgage Payments Made Directly to Mortgagee

Chapter 13 Debtors Must Pay All Payments under a Plan to Receive a Discharge, Including Post-petition Mortgage Payments Made Directly to Mortgagee

On July 6, 2012,  the Debtors  filed a petition  for relief under chapter 13 of title 11 of the United States Code.

In Debtors’ Petition, they claim their principal residence as 2021 Decatur Ave (the “Property”), in Schedule A, they claim an ownership interest in the Property, and in Debtors’ Schedule B they assert the Property is encumbered by a mortgage held by GMAC Mortgage, LLC (“GMAC”).

On November 5, 2012, U.S. Bank National Association, as Trustee for Residential Asset Securities Corporation, Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-EMX1 (“U.S. Bank”) filed a proof of claim (the “Proof of Claim”), asserting Debtors executed a note secured by a mortgage against the Property (the “Mortgage”) and that at the time of the Petition, Debtors were in arrears on the note and Mortgage in the amount of $64,000.16 (the “Arrears”).  The Proof of Claim provides that U.S. Bank is the creditor and provides an address for GMAC to whom notices and payments should be sent.

On June 19, 2013, Debtors filed a Third Amended Chapter 13 Plan (the “Plan”), which provides for, among other things, Debtors to make 60 monthly payments to the Trustee, Debtors to pay GMAC the Arrears of $64,000.16 through the Plan, and for Debtors to make all postpetition payments outside of their Plan.

On October 23, 2013, the Court entered an Order confirming Debtors’ Plan (the “Confirmation Order”).

On August 15, 2017, the Trustee filed a Notice of final cure payment and completion of payments under the Plan pursuant to Federal Bankruptcy Rule 3002.1 (the “3002.1 Notice”), giving notice that Debtors have paid the Arrears in full in the amount of $64,000.16 and directing holders of secured claims to file and serve a statement within 21 days indicating (1) whether it agrees Debtors have paid the amount required to cure the default claim; and (2) whether Debtors are otherwise current on all payments consistent with § 1322(b)(5).

On August 24, 2017, U.S. Bank filed a response to the Trustee’s 3002.1 Notice (the “3002.1 Response”), asserting that (1) Debtors have paid in full the Arrears; and (2) Debtors are not current on postpetition payments consistent with § 1322(b)(5) and that the total of postpetition payments due is $264,634.15. U.S. Bank served the 3002.1 Response on Debtors, Debtors’ Counsel, and the Trustee.

On September 20, 2017, the Trustee filed her Certification of Completed Plan.

On September 22, 2017, the Court entered an Order discharging Debtors (the “Discharge Order”).

On November 3, 2017, the Court entered an Order vacating the Discharge Order as entered in error.

On November 21, 2017, the Court entered an Order directing Debtors to appear for a hearing on December 12, 2017 (the “Hearing”) to show cause why the Court should enter an order granting Debtors a discharge (the “OSC”).

On December 12, 2017, the Court held the Hearing, at which neither Debtors, their Counsel, nor U.S. Bank Appeared.


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