An Argument in Favor of the Mid-Case Audit: B.R. 3002.1 Proposed Changes

If you put your ear to the ground you may hear the rumblings regarding a change to Bankruptcy Rule 3002.1 requiring the institution of a mid-case bankruptcy audit.

This mid-case audit would be like the Notice of Final Cure but would be performed by a trustee’s office in the middle of a pending Chapter 13, rather than at the end, and would still require a response be filed by secured lender.

In my opinion everyone involved would benefit from this proposed change.

As a former Debtors’ Counsel, I can . . .

It looks like you are not signed in or registered! This content is only available to members.

Or Sign In Below:

Molly Pro picture

Senior Bankruptcy Counsel, Sottile & Barile Attorneys at Law (Loveland, OH)

Molly Simons has been a licensed attorney since 2008 after graduating from Cleveland-Marshall College of Law, Cleveland State University. With an undergraduate degree in Hospitality Food Service Management from Kent State University, Molly is a unique attorney as she approaches the practice of law with a hospitality background. Client’s satisfaction is of the utmost importance to her. Molly’s primary focus for the first ten years of her practice was consumer Chapter 13 and Chapter 7 Bankruptcy. She joined Sottile & Barile, Attorneys at Law in 2018 and has happily represented creditors in the bankruptcy process ever since.

Molly is licensed in the States of Ohio, Kentucky, and West Virginia and is admitted federally in all federal jurisdictions for Ohio, Kentucky, Indiana, Michigan, Illinois, West Virginia, Colorado and Wisconsin. She is currently the Co-Chair of the Bankruptcy Committee with the Cincinnati Bar Association and was recently accepted to the Attorney Advisory Committee for the Southern District of Ohio 2022-2025 Term.

Perhaps her most important role is that of Mother to her two beautiful children who never fail to keep her super busy and proud.

Related Articles

April 28, 2019
By William H. Brown, Adviser to The Academy d/b/a ConsiderChapter13.org In the most recent opinion on the issue, as of this writing, the Court in In re Rivera, 2019 WL 1430273 (Bankr. D. Ariz. Mar. 28, 2019), in perhaps still a minority view, concluded that debtors’ default in making all direct postpetition mortgage payments was not a failure to complete...
Members
June 23, 2019
By Herbert L. Beskin, Chapter 13 Trustee for the Western District of Virginia (Charlottesville) Let’s take the following set of facts and see how it plays out in the labyrinthian world of hardship discharge of student loan debt. The case is In re Lozada (Lozada v. Educational Credit Management Corporation), 594 B.R. 212 (Bankr. S.D. N.Y. 2018). Years ago (30...
Members
September 26, 2021
By Lawrence R. Ahern III, Brown & Ahern (Nashville, TN) "Equity is not an old man, with a long grey beard, sitting under a tree. Equity has rules."1 Introduction Section 105 When enacted in 1978, the Bankruptcy Code in section 105 included an "all writs" statute for the Bankruptcy Courts: The court may issue any order, process, or judgment that...
Members
January 3, 2021
By Cathy Moran, Esq., Moran Law Group (Redwood City, CA) Chapter 13 debtors got a huge “gift” among the COVID relief provisions of the Consolidated Appropriations Act of 2021, signed December 27, 2020 by the president. Debtors may get a full -compliance discharge of dischargeable debts if they have a residential mortgage and have not made all the payments required...
Members
Academy Circle Logo Final
March 6, 2022
Diane Cipollone is an attorney and a qualified expert on mortgage servicing and loan origination matters. While Diane no longer provides expert testimony, she continues to consult with consumer attorneys; trains attorneys, court mediators, housing counselors and fair housing advocates on foreclosure prevention guidelines and federal mortgage regulations; and mentors pro bono attorneys and non-profit housing counselors. She has presented...
July 14, 2019
By Beverly M. Burden, Standing Chapter 13 Trustee (Lexington, KY) An unscheduled creditor without notice of the bankruptcy case was denied an extension of time to file a proof of claim pursuant to Bankruptcy Rule 3002(c)(6)(A) in a recent opinion from the Eastern District of Kentucky. In the case of In re Fryman,1 the debtor did not include creditor Kentucky...
Members
ahern_larry_regular
February 5, 2023
Introduction This series reviews developments in bankruptcy procedure during 2022. Amendments to 16 rules and one new rule took effect December 1, 2022. Many reflected changes necessitated by the Small Business Reorganization Act of 2019 (SBRA),1 and have been in place in the same or similar form on an interim basis since that legislation took effect.
Members
January 24, 2021
By Kara K. Gendron, Esquire, Mott & Gendron Law (Harrisburg, PA) The recent Supreme Court decision in City of Chicago v. Fulton1 will change the law in most Circuits. Prior to this case, there was a split among the circuits as to whether the post-petition retention of property taken pre-petition constitutes a violation of the automatic stay under §362(a)(3) of...
Members
February 24, 2019
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of Tennessee (Nashville) It was impermissible and contrary to the provisions of the Bankruptcy Code for the bankruptcy clerk to enter an order which dismissed a Chapter 13 case based only upon the trustee’s certification that the debtor did not make a timely first payment. (Duncan). No...
Members
February 16, 2020
By Cathy Moran, Esq. (Redwood City, CA) One of the mysteries of Chapter 13 is why mortgage lenders don’t send an IRS 1098 for mortgage payments made through a Chapter 13 plan. And without that reminder piece of paper, our clients don’t realize that much of what the trustee pays to mortgage creditors is deductible interest. Miss that deduction and...
Members