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Notice of Payment Changes and Notice of Fees, Expenses and Charges (“3002.1 Notices”)

Local Rule Number: 
Rule 3002.1-1
3000 Series

(A)     Applicability of Bankruptcy Rule 3002.1 to Additional Types of Claims Related to Real Property.  The provisions of Bankruptcy Rule 3002.1 shall also apply to claims:

(1)     that are secured by a security interest on real property of the debtor other than the debtor’s principal residence (including without limitation claims of condominium associations and homeowner’s associations); and

(2)    for which the plan provides that either the trustee or the debtor will make contractual installment payments and which payments are subject to change.

(B)     Prohibited Notices and Sanctions. If the plan’s treatment of a claim secured by a security interest in real property is not covered by subsection (A) of this rule and the stay has been lifted in relation to the creditor’s claim, the creditor is prohibited from filing a notice of payment change. Upon motion by the debtor, the court will consider awarding sanctions against a creditor that files a notice of payment change that is not required under Bankruptcy Rule 3002.1, as expanded by  or subsection (A) of this rule, and that is expressly deemed unnecessary under this rule.

(C)     Relief from Automatic Stay. Upon entry of an order granting a creditor relief from the automatic stay, such creditor shall resume sending notices of payment change and escrow notices directly to the debtor pursuant to such creditor’s underlying contract with the debtor.

(D)     Mortgage Modification Mediation Program.  If the debtor and creditor are currently participating in the Mortgage Modification Mediation (“MMM”) Program, the following provisions will apply to 3002.1 Notices: 

(1)     3002.1 Notices filed and served by such creditor are for notice purposes only and are abated pending the outcome of the mediation. If the MMM does not result in a modification of the mortgage, the 3002.1 Notices shall become effective upon the filing of the Final Report of Mortgage Modification Mediator. 

(2)     The debtor is not required to file an objection to a 3002.1 Notice filed and served by a creditor during the pendency of a mediation with such creditor.

(3)     In the event the mediation ends in a Final Report of No Agreement, the debtor shall have 14 days from the date on which such Final Report is filed to modify the debtor’s chapter 13 plan to respond to the 3002.1 Notice(s) pursuant to subsection (F) of this rule.

(E)     Modifications to Official Bankruptcy Form “Notice of Mortgage Payment Change” Required.  When a 3002.1 Notice is filed addressing a claim covered under subdivision (A)(1) of this Rule, the Official Bankruptcy Form “Notice of Mortgage Payment Change” shall be modified accordingly to reflect the actual type of claim for which the notice is being filed.

(F)     Debtor Response to 3002.1 Notice. Counsel for the debtor shall review all 3002.1 Notices and conform or object to these notices (a) within one year after a notice of fees, expenses and charges is issued by the creditor, and (b) on the day preceding the date on which the new amount described in a notice of payment change is due.  Notwithstanding the foregoing, during the pendency of an MMM, the deadline set forth in subsection (D)(3) of this rule shall apply.  Prior to the applicable deadline, counsel for the debtor must file Local Form “Debtor’s Response to Rule 3002.1 Notice” and select one of the following response options:

(1)     object to the creditor’s 3002.1 Notice, and request a hearing on such objection;

(2)     indicate that the debtor does not object to the 3002.1 Notice and the debtor will propose an amended or modified plan to provide for the payment change, fee, charge or expense referenced in the 3002.1 Notice;

(3)     indicate that the debtor does not object to 3002.1 Notice; however, due to the de minimis amount referenced in the Notice, (i) the debtor will not propose a modified plan to provide for the payment change, fee, charge or expense; (ii) the debtor will address such amounts outside of the debtor’s bankruptcy case; and (iii) the debtor acknowledges that the chapter 13 trustee will not remit payment of any de minimis amount, and any such de minimis amount is not subject to discharge unless paid in full; or

(4)     indicate that the creditor and the debtor are filing a Joint Motion to Abate 3002.1 Notices and Reconcile Annually, under subsection (G) of this rule.

(G)     Joint Motion to Abate 3002.1 Notices and Reconcile Annually.  The debtor and the creditor may file a Joint Motion to Abate 3002.1 Notices and Reconcile Annually, when the contractual payment to such creditor remitted by the chapter 13 trustee adjusts periodically during the term of the plan.  The order granting the motion shall (a) include language that the debtor and the creditor agree to annually reconcile the claim to account for any payment change, fee, charge or expense that impacted the claim in the previous year; (b) specify how the parties intend to notify the court of the annual reconciliation, (c) require that the creditor file with the court a notice of the annual reconciliation of the claim, (d) to the extent that the debtor contests the amount due the creditor as a result of the annual reconciliation of the claim, require the debtor to file an objection to such notice and request a hearing, within 21 days of the date such notice is filed, (e) if the debtor does not object to the annual reconciliation of the claim, direct the debtor to pay such amount directly to the creditor and acknowledge that the chapter 13 trustee will not remit payment of such amount, and any such amount is not subject to discharge unless paid in full; and (f) amend any confirmation order previously entered in the case by providing that the debtor will remit the amount of any payment change either agreed to by the debtor or approved by the court directly to the creditor outside the plan.  

☞2020 Amendment:  The 2020 Amendment to Local Rule 3070-1(B) deletes subsection (B) of Local Rule 3070-1(B) and moves the substance of this subsection to new Local Rule 3002.1-1, as well as changes the title of the rule from “Post Confirmation Payment Changes or Charges” to “Notice of Payment Changes and Postpetition Fee Notices (“3002.1 Notices”).  The amendment also makes clear that the requirements of Bankruptcy Rule 3002.1 and Local Rule 3070-1(B) cease upon the creditor obtaining relief from the automatic stay. Prior to entry of an order granting stay relief, 3002.1 Notices must be filed and are required to be filed.  However; after entry of an order granting stay relief, the secured creditor must not file a 3002.1 Notices in any case in which the plan payments to that creditor are not made by the trustee or are not going to change under the loan documents. The amendment also incorporates the Mortgage Modification Mediation (“MMM”) program and makes clear that 3002.1 Notices are for notice purposes only during the mediation process, and the debtor is not required to file an objection due to the pending mediation. Finally, the amendment adds a requirement for the debtor’s Response to a 3002.1 Notice to be prepared on the local form.  However, the debtor and creditor may elect to avoid the expense of modifying the debtor’s chapter 13 plan and instead to reconcile the modified payments due to the creditor annually by filing a “Joint Motion to Abate 3002.1 Notices and Reconcile Annually."