To assist in efficiently handling 362 settlement orders in conduit cases, the Court has made available a new form settlement order in Judge Duncan cases only. A sample is available here. The Request for Settlement Order on Motion for Relief from Stay event has been modified to require users to indicate if the bankruptcy case is changing from a non-conduit to a conduit case. After selection of the conduit option and proper input of the required information, the trustee is notified of the request for a settlement order, and upon her consent, the new form settlement order will be generated and sent to Judge Duncan for review and signature
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The Operating Orders (16-02 and 16-03), which govern Conduit Mortgage Payment Procedures, have been amended. The revisions are: (1) to revise footnote 13; (2) to amend Exhibit C, the form to be used for a debtor to consent to payment of funds to affected mortgage creditors and the debtor’s attorney upon conversion or dismissal and to rename it Exhibit C.1; and (3) to add Exhibit C.2, a form order to be used in cases being converted when the debtor has signed a Consent in accordance with Exhibit C.1. The revised Operating Orders are available here.
Additionally, the Court has made new CM/ECF events available to be used in chapter 13 conduit cases. The events are as follows:
- Exemption from Conduit Mortgage Payment Requirement. The event is located in the Motions/Applications menu and may be used by any party seeking an exemption from the conduit mortgage payment requirement. This event may be used in Judge Duncan’s and Judge Waites’ cases.
- Mortgage Creditor Report. The event is located in the Other and Creditor Claims Actions menu and may be used by a mortgage creditor for filing its report in response to a Trustee’s Request for Mortgage Creditor Report. This event may be used in all Judges’ cases.
- Consent Allowing Payment of Funds to Creditor(s) and Debtor(s) Attorney-Conduit. The event is located in the Other menu and may be used by a debtor to consent to payment of funds to a conduit mortgage creditor and to the debtor’s attorney in the event of a conversion or pre-confirmation dismissal of the case. This event may be used in all Judges’ cases, and the Judges encourage the filing of the Consent at the beginning of the case whenever possible. In any event, the Consent must be filed before an order allowing the payment can be obtained. Note that it is the debtor’s attorney’s responsibility to ensure that an order is proposed to the Court at the time conversion is requested. A form order for use in cases being converted is available here.
The Plan and Amended Plan events have also been revised to add an option to designate the plan as a conduit plan. Additional events have also been made available for use by the chapter 13 trustees.
On Behalf of the Court
Pursuant to Administrative Orders available here, the Court has appointed new members to the Advisory Committee on Local Rules and Practice and the Interest Rates in Chapter 13 Cases Committee. Kathleen Muthig will serve as the chair of the Local Rules Committee and Jimmy Wyman will serve as the chair of the Chapter 13 Interest Rate Committee.
The new members of the Advisory Committee on Local Rules and Practice are as follows:
- Kathleen M. Muthig
- John Timothy Stack
- Katherine L. Rea
- Michael Kevin McCarrell
- Russell A. DeMott
- Michael H. Weaver
- Christine E. Brimm
The new members of the Interest Rates in Chapter 13 Cases Committee are as follows:
- James M. Wyman
- F. Lee O’Steen
- Jackson Turner-Vaught
- Suzanne G. Grigg
- Jason D. Wyman
Thank you to all who agreed to serve on these committees.
The Court would like to thank the following attorneys for their two years of service on the Advisory Committee on Local Rules and Practice:
Additionally, the Court would like to thank the following attorneys for their two years of service on the Interest Rates in Chapter 13 Cases Committee:
The Court will issue Administrative Orders appointing new members to each committee in the next few days.
Changes to the Federal Rules of Bankruptcy Procedure, the South Carolina Local Bankruptcy Rules, and the Miscellaneous Fee Schedule are effective today. Amendments have been made to Fed. R. Bankr. P. 1010, 1011, 1012, 2002, 3002.1, 7008, 7012, 7016, 9006, 9027, and 9033. Local Rule changes are detailed in the Court's November 21, 2016 Announcement and the fee changes are detailed in the November 17, 2016 Announcement.
The Judges met and considered comments received to the proposed changes to the local rules. Upon agreement of the Judges, the following rule changes will be effective December 1, 2016:
(1) Local Rules 7008-1, 7012-1, and 7016-1 are repealed and paragraphs (b) and (c) of Local Rule 9027-1 are removed based on the December 1, 2016 amendments to the Federal Rules of Bankruptcy Procedure addressing Stern v. Marshall.
(2) Local Rule 3070-1(b)(1) and (2) are revised. A minor stylistic change is made to paragraph (b)(1). Paragraphs (b)(2)(A)-(C) are amended to address conduit plan cases and to simplify the attorney fee provision. Since the rule was released for comment, paragraph (b)(2)(A) was further amended to address the issue of partial payments by a debtor and the lack of a proof of claim by a mortgage creditor.
(3) Local Rule 5075-1 is amended to add paragraph (c)(10), delegating service of the notice of hearing on a motion for exemption from a conduit mortgage payment requirement.
(4) New Local Rules 7012-1 and 7056-1 are adopted and require a specific notice to pro se parties upon the filing of a motion to dismiss an adversary proceeding (a Rule 12(b) motion) or the filing of a motion for summary judgment.
(5) Exhibit C to Local Rule 9013-4 is amended to permit the chapter 13 trustee to self-schedule a hearing on a Request for Mortgage Creditor Report, with a 20 day objection period.
(6) Local Rule 9036-1 is substantially revised to require a debtor to make an election regarding DeBN (Debtor Electronic Bankruptcy Notice) at the beginning of a case.
Please see the attached order regarding the Court's schedule for the upcoming holiday season and for computing time during that period. Please note that while the court will be open on December 30, 2016 to accommodate debtors who may have foreclosure proceedings the following week, the only office that will open that day will be our Columbia office.
The Local Rules Committee has proposed changes to the Court's local rules. The Judges seek your comments on the proposals that follow:
(1) Repeal Local Rules 7008-1, 7012-1, 7016-1, and remove paragraphs (b) and (c) of Local Rule 9027-1 based on the December 1, 2016 amendments to the Federal Rules of Bankruptcy Procedure. These local rules were adopted in response to Stern v. Marshall and the new national rules (which are nearly identical to the current local rules) render them unnecessary;
(2) Revise Local Rules 3070-1(b)(2) [addition of a provision for chapter 13 cases dismissed before confirmation providing for a disbursement of funds to conduit mortgage creditors, a simplification of the attorney fee provision, a reordering of the subsections, and stylistic changes]; 5075-1(c) [add as (10) the delegation of service of the notice of hearing on motions for exemption from conduit mortgage payment requirements]; and 9036-1 [adding a requirement that debtors file an election requesting or declining participation in the DeBN program]; and
(3) Adopt new Local Rules 7012-1 and 7056-1 [requiring a specific notice by movants to unrepresented parties in connection with, respectively, motions to dismiss adversary proceedings and motions for summary judgment.]
Please provide any comments on or before November 18, 2016 to email@example.com. Absent further announcement, these rule changes and any revision prompted by the comments will be effective December 1, 2016. Revisions to Local Rule 3015-2 are under consideration and may be circulated for public comment in the new year. The Judges wish to thank the Local Rules Committee for their service to the Court.
The following are effective starting January 20, 2017, unless otherwise advised.
Comments may be provided by January 17, 2017 to Andrew_Powell@scb.uscourts.gov.
Standard 362 Settlement Orders for cases filed after October 1, 2016 (Conduit Eligible Cases):
Judge Waites has implemented standard 362 settlement orders for Chapter 13 cases filed after October 1, 2016 (Conduit Eligible Case) where the debtor(s) have failed to pay mortgage creditors directly as proposed in their Chapter 13 plan. These standard orders may also be voluntarily used in cases filed prior to October 1, 2016. The standard orders are as follows:
(1) Conduit: Applicable in cases where the parties agree that payments to cure the post-petition arrearage and the future monthly mortgage payments will be paid to the Trustee through plan payments. This standard order contemplates the Trustee’s preference that the post-petition arrearage be cured over the remaining term of the Chapter 13 plan. This standard 362 settlement order is available here.
(2) Conduit & Direct Pay: Applicable in cases where the parties agree that: (1) ongoing mortgage payments will be paid to the Trustee through plan payments and (2) monthly payments to cure the post-petition arrearage will be paid directly to the Movant by the Debtor. If the value/equity above the movant’s lien in the property exceeds $5,000.00, parties shall use this order. In cases where the value/equity above the movant’s lien is less than $5,000.00, the parties shall use this order. Parties should schedule the cure payments under the following uniform standards:
|Number of Missed Post-Petition Payments||Length of Cure Period|
|0 - 6 Months||12 month cure|
|7 - 12 Months||24 month cure|
|More than 12 Months||To be determined at a hearing before the Court|
Standard 362 Settlement Order for Loss Mitigation/Mortgage Modification:
In addition, Judge Waites has implemented a standard 362 settlement order for all Chapter 13 cases in which the parties resolve a 362 motion through loss mitigation/mortgage modification. This standard 362 settlement order is available here.
Mediation for Valuation Disputes:
A pilot program providing mediation in contested valuation proceedings involving real estate or large value personal property has been very successful in reducing the costs to the parties and the number of contested hearings before the Court. Therefore, Judge Waites is implementing this mediation in all of his Chapter 13 cases. A copy of the Valuation Dispute Mediation Program guidelines and a copy of the standard mediation order are available here. Please note that counsel is required to immediately notify Chambers at firstname.lastname@example.org as well as the Chapter 13 Trustee upon the filing of an objection involving the valuation of a secured claim on real estate or large value personal property.
Reporting Disputes involving Domestic Support Obligations:
Upon the filing of an objection to confirmation or a response to an objection to a proof of claim demonstrating disputes related to domestic support obligations (“DSO”), the debtor’s and opposing counsel shall immediately notify Chambers of the DSO dispute by an email to email@example.com with a copy to the Chapter 13 Trustee for consideration of mediation or other case management processes.
The Guidelines and Forms used for LM/MM in Judge Waites’ cases have been revised to be effective for all notices and motions for LM/MM and Consent Orders Requiring LM/MM filed on or after January 15, 2017. The Guidelines and Forms are attached for review and comment by the Bar. Please direct all comments to Andrew Powell by January 9, 2017 at Andrew_Powell@scb.uscourts.gov.
The primary changes in procedure are the appointment of a mediator in each case and the adjustment of supplemental attorney’s fees. A low cost, efficient mediation procedure is being adopted for all cases for the following reasons:
- Mediation has been very successful in past LM/MM cases;
- Early case mediation will ensure more timely submission by debtors of the required financial information and similarly a more timely acknowledgement and response by the mortgage creditor;
- Early case mediation will result in the designation of local counsel for the mortgage creditor earlier in the case, which has proven to expedite the LM/MM review.
The supplemental debtor’s attorney’s fee has been increased to $1,700 plus $300 for participation in a second mediation session, if necessary. The guidelines also allow debtor and counsel to agree to a different fee amount if paid directly by debtors outside of the Chapter 13 Plan.
To accommodate form changes, they are provided in Word format and may be automated in the future.
Upon final enactment of the guidelines and forms, Judge Waites anticipates being available for bar meetings in the applicable divisions to review the procedures.