New Standing Rule 08-01 for ongoing mortgage payments through the 13 trustee in Kansas applies to all chapter 13 banrkuptcy cases filed on or after October 1, 2008. Debtors in cases filed earlier will not be subjected to the new rule even if they subsequently become delinquent on their home mortgage payments.
The Hon. Janice Miller Karlin, U.S. Bankruptcy Judge for the District of Kansas, Topeka Division, issued the following statement last week after polling all the Kansas bankruptcy judges:
“The first sentence of S.O. 08-1 (soon to be 08-3 to add a sample document to Attachment H) clearly specifies that it applies to cases filed after 10/1. The provision in Paragraph I that provides for the imposition of conduit payments when a debtor becomes delinquent after the petition date is designed to capture the debtors who were out of the conduit system at filing because they were current and have now defaulted.”
” Accordingly, no Debtor with a case filed prior to 10/1 is required to put themselves under S.O. 08-1 (requiring amendment of plan, etc.,),” Judge Karlin said, “although we would certainly encourage Debtors’ counsel to consider whether it is in their client’s best interest to recommend to them to voluntarily provide for future direct payments after a default even in cases filed pre October 1 because the default certainly shows there is some problem.”
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