Federal District Court Affirms Decision that Residential Loan Modification Does Not Alter Lien Priority in Pennsylvania

By Scott Waterman, Standing Chapter 13 Trustee Eastern District of Pennsylvania (Reading)

Citing Pennsylvania law, a Federal District Court in In re Hamilton (Hamilton v. Pennsylvania Housing Finance Agency), ___ B.R. ____ (E.D. Pa. 2020) refused to apply the equitable subordination doctrine to reorder the priority of mortgages after the first mortgage lender granted the debtors a loan modification prior to the bankruptcy filing.

Modifying a first mortgage is one of the most common loss mitigation tools available to bring a loan current to prevent foreclosure. The Pennsylvania Housing Finance Agency (“PHFA”), a second . . .

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Chapter 7 Trustee Compensation for Uncovered Equity

Henry E. Hildebrand, III

July 21, 2024

When a Chapter 7 trustee discovers non-exempt, undisclosed equity in the debtor’s property, the Chapter 7 trustee is entitled to be compensated in the case based upon the hours actually performed by the trustee in a lodestar method as an administrative expense when the case is converted to Chapter 13.

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Critical Case Comment – Nothing Requires a Plan to Provide for All Secured Claims

Henry E. Hildebrand, III

December 12, 2021

If a Chapter 13 plan makes no provision for a mortgage obligation, omits any treatment of the mortgage claims, and prohibits the Trustee from making disbursements toward the claims, the claims are not provided for by the plan and the plan can be confirmed over the objection of the creditor and the trustee; nothing requires a plan to provide for...

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Summer Intern Unveils Demographic Breakdown of U.S. Federal Judicial Districts

Sadie Mehr

September 8, 2024

Sadie Mehr, summer intern for the Chapter 13 Standing Trustee for the District of South Carolina, extrapolated the U.S. Census data and organized it into a spreadsheet.

From the Editor

March 31, 2019

By Wm. Houston Brown, United States Bankruptcy Judge (Retired) Lien Modification - Modification of mortgage on mixed-use property. Reviewing the split of authority on whether a Chapter 13 debtor may modify a mortgage on property used for both business and residential purposes and when the use determination is made, the bankruptcy court adopted the filing date as the appropriate time...

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Critical Case Comment–“No Realistic Future Prospects”

Henry E. Hildebrand, III

March 26, 2023

A 34-year-old Chapter 7 debtor could discharge his student loan obligation by establishing that he could not reasonably make payments on the balance, could not maintain a reasonable standard of living, and because the expiration of his payment term had already passed, his standard of living was likely to persist, with no realistic future prospects. (Silverstein) In re Wolfson, No....

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Character Counts

Merideth Akers

November 6, 2022

“Does wearing these horizontal stripes make me look fat?” My wife, Becky, tells me that clothes with horizontal stripes make one look broad or fat. However, wearing clothes with vertical stripes create the illusion of making one look tall or slim. Smart fashion designers design clothing that creates the illusion that people are something they are not. I must confess...

Rollin’ Rollin’ Rollin’ – Whether a Motor Home Qualifies for the Homestead Exemption as a Mobile Home?

Tiaon Michele Lynch

April 28, 2024

“Although exemptions are meant to be interpreted liberally; this issue may become increasingly complex with the rise of remote work such as traveling nurses.”

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When Supervisors Supervise the Supervision of Supervisors

The Academy

September 1, 2024

Micromanaging can foster more harm than good in the workplace.

6 Steps to Ethical Unbundling of Bankruptcy Representation

March 21, 2021

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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Delaware Trustee Michael Joseph to Retire

Paul Chael

March 13, 2022

The debtors will miss him. The creditors will miss him. Even more, his colleagues will miss him. Michael Joseph has served as the Chapter 13 Trustee in Delaware since 1987. He is retiring March 31, 2022. He has served with competence and excellence. The debtors will miss him because he treated them with dignity and compassion. The creditors knew they...

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