To Conduit, Or Not To Conduit? That Is The Question. Or Less Shakespearean: “Conduit Mortgage Case Law”

Conduit vs. Direct Mortgage Payments – The Case Law To Consider1

The requirement that debtors pay their mortgage payments to their Chapter 13 Trustee as a “conduit” has advantages and disadvantages. One advantage is the fact that the Chapter 13 Trustee’s records are readily accepted by both the court and creditors in the event of a payment dispute. This advantage provides a clear payment record for all parties, protects debtors who are making payments. The cost of paying the mortgage through the Trustee as a conduit can be a disadvantage . . .

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The Honorable John P. Gustafson

United States Bankruptcy Judge, Northern District of Ohio

John P. Gustafson was appointed United States Bankruptcy Judge for the Northern District of Ohio in April 2014. In his former life, he was a bankruptcy law clerk, an associate and partner in a law firm representing both debtors and creditors, a solo bankruptcy practitioner representing debtors, banks and trustees, the staff attorney to a Chapter 13 trustee, and from October 2007 to April 2014 he was the Standing Chapter 13 Trustee for the Northern District of Ohio, Western Division. Judge Gustafson regularly writes and speaks on a variety of bankruptcy issues.

Stop the Chaos and Fix Client Communication with Smart Tech

Jen Lee

January 19, 2025

“Technology isn’t a replacement for the human element of your practice—it’s a solution to the logistical headaches that prevent you from being the attorney your clients need.” See also: Spitballing Chapter 13’s Image Makeover Ditch the Bankruptcy Jargon—Marketing Chapter 13 as the Ultimate Solution (Note that there are a few comments on this article.) Think Chapter 13 needs an image makeover? Let us hear from you.

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Fulton’s Aftermath – What Do Chapter 13 Practitioners Need To Know?

January 31, 2021

By Nathan E. Curtis and Peter Francis Geraci, Geraci Law L.L.C. Debtors who are not current on mortgage or vehicle payments may file for Chapter 13 relief and propose to cure arrears, and force creditors to accept future payments. Mortgage creditors must give multiple notices before taking real estate away from a debtor, but vehicle creditors are allowed to repossess...

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

March 15, 2020

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...

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Critical Case Comment – How Much Is It Worth – Then/Now?

Henry E. Hildebrand, III

January 22, 2023

On a trustee’s motion to modify a confirmed Chapter 13 plan, Court required debtor to commit funds to unsecured creditors based upon the previously undisclosed equity generated from post-petition sale of property. (Warren) In re Croniser, 2022 WL 3639413 (Bankr. E.D. N.C. August 23, 2022) Case Summary Duane Croniser filed a voluntary petition under Chapter 13 in January of 2020....

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Six Things Taxpayers Should Know About the Sharing Economy and Their Taxes

May 5, 2019

From renting spare rooms and vacation homes to car rides or using a bike…name a service and it’s probably available through the sharing economy. Taxpayers who participate in the sharing economy can find helpful resources in the IRS Sharing Economy Tax Center on IRS.gov. It helps taxpayers understand how this activity affects their taxes. It also gives these taxpayers information...

HELOC Lender’s Rule 3002.1 Charges Pass the Test

Henry E. Hildebrand, III

December 15, 2024

Home equity lender may assess a monthly fee against a debtor’s plan for its compliance with Rule 3002.1 notice of fees charged by HELOC lender’s attorney’s preparation of monthly notices of payment changes and fees authorized by Rule 3002.1. This article is a detailed description of a case Attorney Bonial discusses in Part 2 of Debtor Attorneys Were Gobsmacked!!

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Personal Injury Attorney’s Duty of Reasonable Inquiry of a Client’s Bankruptcy

Michael B. Joseph

August 28, 2022

An attorney meets with a potential client about a recent auto accident personal injury claim. The client suffered severe injuries and may be entitled to a large award. The client fails to mention that he is a debtor in an active bankruptcy. The client also has failed to advise his bankruptcy attorney about the personal injury claim. The debtor/client does...

Director’s Awards Recognize 19 Employees for Leadership, Service

The Academy

December 10, 2023

Congratulations to all but specifically the two bankruptcy courts with recognized recipients!

Bifurcated Fees Under Examination

The Honorable William Houston Brown

May 22, 2022

Bankruptcy and appellate courts in increasing numbers are considering whether it is appropriate for debtors filing for Chapter 7 relief and attorneys representing them to enter into bifurcated fee agreements. It has been recognized that one of the reasons that debtors may decide to file Chapter 13 rather than Chapter 7 is that attorneys require payment of the Chapter 7...

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Taxes & Timing: Calculating Outcomes for Bankruptcy Debtors

Cathy Moran

December 19, 2021

Bankruptcy lawyers regularly evaluate the dischargeability of taxes when deciding when to file a client’s bankruptcy case. At base, the 3 year rule, the 2 year rule, and the 240 day rule routinely drive timing of a bankruptcy. But as we approach the end of the tax year, a client’s current year tax situation becomes another moving part in the...

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