Win Now, Wreck Later: A Tale of Bankruptcy and Mortgage Servicing

By Cathy Moran, Esq. (Redwood City, CA)

My Google Alert popped up a lovely win for a Chapter 13 homeowner, but all I could see was the train wreck that lies ahead.

The bankruptcy court ruled that the confirmed (and completed) plan trumped a late-filed mortgage proof of claim.

Payment of the amount provided in the plan cured the prepetition arrearage.

As a debtor attorney, I’m on board so far.

But I doubt . . .

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By Cathy Moran, Esq. (Redwood City, CA) No matter how many hoops the client dutifully jumped through, without adequate inquiry and communication, the bankruptcy attorney was slammed for unbundling his services. The representation agreement at issue excluded representation in any adversary proceeding filed, as do most such agreements, I imagine. The client initialed every paragraph of the 19-paged representation agreement,...

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