MORTGAGE MODIFICATION CURES PLAN DEFAULT

By: Craig W. Stewart

The Chapter 13 debtor’s confirmed plan required her to make mortgage payments
directly to her lender, she completed her plan in September 2016, and the Trustee filed a
Notice of Final Cure Payment in December. The mortgagee’s servicer responded that she had
not made 39 mortgage payments due post-petition. The Chapter 13 Trustee moved to dismiss
the case which was placed on hold while the debtor filed and received a loan modification.

A Fifth Circuit Bankruptcy Court overruled the Chapter 13 Trustee’s argument that the debtor was not allowed to modify her plan. It ruled “the debtor’s loan modification cures the default as surely as if the debtor had made the missing payments timely.” This issue seems to be common in our jurisdiction as well. We believe and we would strongly argue the same legal principles the Court applied in this case to our bankruptcy judges here in Maryland.

If you are caught in an endless cycle of debt and are struggling to break free, please call us for a free consultation. The Law Firm of Laura Margulies & Associates, LLC has assisted thousands of clients through the bankruptcy process and is sensitive to their needs. Please call me for a free consultation today. Laura Margulies is a principal and Craig Stewart is the managing partner in the law firm of Laura Margulies & Associates, LLC. We represent consumers in bankruptcy and litigation matters in Maryland and the District of Columbia. To learn more about our firm visit our web site at http://www.law-margulies.com.