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Chambers' Bulletins
10/2018

On Behalf of the Court

Wed, 10/24/2018 - 3:55 pm

Please see the attached order regarding the Court's schedule for the upcoming holiday season and for computing time during that period.


Thu, 10/18/2018 - 4:00 pm

Each year the judges make an effort to coordinate changes to the Local Rules with national rules changes, usually effective December 1.  During some cycles the changes are extensive and in others, less so.  We are always ablely assisted by the Local Rules Committee in this effort.

This year the Local Rules Committee met, reviewed the national rules changes, and found no Local Rules changes necessitated for December 1.  The Committee did suggest one new rule and minor revisions or edits to the District wide chapter 13 plan form.  The judges will meet and consider these matters and other suggestions for revision of the chapter 13 plan form (with an opportunity for public comment) in early January. Thus, there are no December 1 local rule changes this year.

The judges take this opportunity to thank the members of the Local Rules Committee for their exemplary service:  Kathleen M. Muthig (chair), John Timothy Stack, Katherine L. Rea, Michael Kevin McCarrell, Russell A. DeMott, Michael H. Weaver, and Christine E. Brimm.

As a reminder, the following changes to the Federal Rules of Bankruptcy Procedure will take effect December 1, 2018:

1.  Rule 3002.1(b) is amended to authorize courts to modify its requirements for claims arising from home equity lines of credit.  Additionally, (b)(2) is amended to provide that a party in interest has a right to object to a payment change by filing a motion to determine whether the change is required to maintain payments under section 1322(b)(5) and states that if no motion is filed by the day prior to the  date the new amount takes effect, the change automatically goes into effect.

2. Rule 5005 is amended to require parties represented by an attorney to file electronically and to allow pro se parties to file electronically under certain circumstances. 

3. Rule 7004 is amended to update its reference to FRCP 4(d)(5).

4.  Rule 7062 is amended to retain a 14-day period for the automatic stay of a judgment (FRCP 62 now provides for a 30-day stay).

5. Rules 8002 and 8011 are substantially revised, in large part to conform with amendments to the Federal Rules of Appellate Procedure.

6.  Rule 8006(c) is amended to provide authority for the court to file a statement on the merits of a certification for direct review by the court of appeals, if the certification is made jointly by all of the parties to the appeal.

7.  Rules 8007, 8010, 8021, and 9025 are amended to conform with amendments to FRCP 62.

8.  Rules  8013, 8015, 8016, 8017, and 8022 are amended to conform with amendments to the Federal Rules of Appellate Procedure.

9. Rule 8018.1 was added to provide that if a district court determines that the bankruptcy court did not have authority to enter a final judgment, the district court can treat the order as proposed findings of fact and conclusions of law.

 


Judge Waites

Wed, 10/10/2018 - 1:49 pm

Due to inclement weather and anticipated travel difficulties, all bankruptcy case matters originally scheduled in Columbia, South Carolina before Judge John E. Waites on October 12, 2018 will be rescheduled.

Matters scheduled for October 12, 2018 at 9:00 AM (Chapter 13 Matters) are rescheduled to Thursday, October 25, 2018 at 9:00 AM in Columbia, SC.

Matters scheduled for October 12, 2018 at 10:30 AM (362 Matters) are rescheduled to Tuesday, October 23, 2018 at 9:00 AM in Columbia, SC.

An omnibus order to this effect will be entered. Any questions regarding the calendar should be addressed to Agnes Babb (803-765-5024, Agnes_Babb@scb.uscourts.gov).


Thu, 10/04/2018 - 11:14 am
  1. Interplay of Loss Mitigation/Mortgage Modification and Conduit

When proposed in the debtor’s initial chapter 13 plan, Loss Mitigation/Mortgage Modification (“LM/MM”) is an exception to the requirement to use conduit procedure in Judge Waites’ cases under Operating Order 18-03. Chambers Guidelines provides form non-standard language for proposing LM/MM through the chapter 13 plan.

Trustees Wyman and Stephenson have reviewed this non-standard plan language and concluded that the language is adequate to permit direct payments to the creditor after the completion of LM/MM (regardless of whether the LM/MM is granted or denied) without the need for an amended plan. This language does not preclude a debtor from subsequently amending the chapter 13 plan after the completion of LM/MM; however, if the amended plan proposes arrearage payments made through the trustees, the trustees expect a contemporaneously filed budget to demonstrate that the debtor is able to make the higher payments to the trustee and direct payments to the creditor (see below).

  1. § 362 Settlement Orders involving Conduit

Recently, chambers has received several proposed § 362 settlement orders seeking to convert a previously direct pay or LM/MM case to a conduit case.  Any such proposed settlement orders must include the chapter 13 trustee’s consent or will be considered at an actual hearing before the Court.

  • Pre-Confirmation: Trustees Wyman and Stephenson have indicated that they will consider consenting to pre-confirmation settlement order that propose conduit payments instead of previously proposed direct pay or LM/MM cases.
     
  • Post-Confirmation (Entirely Conduit): The trustees have indicated that they will not consent to any post-confirmation settlement orders that propose to convert a previously direct pay or LM/MM plan entirely to the conduit procedure (i.e. plan payments to the trustee include both arrearage and future ongoing mortgage payaments).
     
  • Post-Confirmation (Arrearage Only): The trustees will consider consenting to post-confirmation settlement orders that provide for arrearage only (both pre and post-petition) to be paid in payments to the trustee while the debtor maintains ongoing payments directly to the creditor if: (1) the total arrearage is clearly established either through the settlement order or by the previous filing of an amended proof of claim and (2) an updated budget is submitted demonstrating the debtor is able to make the higher payments to the trustee and creditor.

Judge Waites will not consider any proposed § 362 Settlement Order that provides for conversion to a conduit case which includes drop dead language to allow the creditor relief from the stay or case dismissal upon the debtor’s failure to make payments under the plan to the Trustee. Ordinarily, the enforcement of trustee’s payments is made by the Trustee only, but the secured creditor may file a new motion for relief, motion to dismiss or seek other remedies upon a plan default.

  1. Removal of LM/MM Status Hearing

To assist the Court in reviewing LM/MM Correspondence and Certifications filed to remove LM/MM status hearings, Chambers is providing examples of satisfactory correspondence/certifications to assist the bar in complying with the required procedures under the LM/MM guidelines. An example of a satisfactory correspondence to remove the Debtor’s LM/MM status hearing is available here. An example of a satisfactory certification to remove the Mortgage Creditor’s LM/MM status hearing is available here.  The use of unclear language will prohibit the removal of the hearing and require the attendance by parties and counsel.


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