Bankruptcy Court In Eastern Kentucky Requires 3002.1 Notices Even After Relief Is Granted

We received a ruling from Judge Wise in Eastern KY Bankruptcy Court (after quite a long wait) on the application of Rule 3002.1 and Notices of Payment Changes, and whether they must still be filed if we obtain post-confirmation relief from stay.

The Court rejected the position espoused by both our firm and the Chapter 13 Trustee that the notices were of no real value once stay relief is granted as the claim is no longer being paid under the plan.  The Court concluded that there may be instances where the continued disclosures would be of value to the debtors and trustee as it relates to calculating a deficiency claim or to efforts by a debtor to retain the home after relief is granted.

As a result, the Court will clearly no longer grant any such requests for relief in Motions for Relief from Stay in Chapter 13 cases in this district.

This decision was reached in a number of parallel cases that were decided around the same time.  We have yet to hear of any of the Creditors choosing to appeal this issue.  If that occurs, we will keep our clients updated.

On a related note, it does appear, however, that the Court will still entertain requests to waive 3002.1 compliance on HELOC loans, but ONLY if the debtor and trustee consent.  Typically, the debtors do agree, and these types of motions for HELOC loans with payments that vary monthly can still be brought in this District at this time.

If you have any questions about this, or any other Bankruptcy issue in Ohio, Kentucky, Indiana or West Virginia, please contact our Lead Bankruptcy Attorney, David Nalley at 513-333-7238 or david.nalley@rslegal.com.

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