Source: https://lundinonchapter13.com/Content/Section/162.2
Timestamp: 2019-12-13 20:45:46
Document Index: 206655560

Matched Legal Cases: ['§ 162', '§ 524', '§ 162', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 1328', '§ 524', '§ 524', '§ 524', '§ 524', '§ 1328', '§ 1328', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 1322', '§ 524', '§ 1322', '§ 524', '§ 524', '§ 1322', '§ 1322', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 3', '§ 1330', '§ 224', '§ 117', '§ 524', '§ 1322', '§ 524', '§ 524', '§ 1328', '§ 524', '§ 524', '§ 287', '§ 135', '§ 138', '§ 162', '§ 1322', '§ 81', '§ 83', '§ 83', '§ 83', '§ 83', '§ 83', '§ 83', '§ 84', '§ 85', '§ 85', '§ 85', '§ 1322', '§ 85', '§ 138', '§ 308', '§ 138', '§ 357', '§ 162', '§ 118', '§ 1322', '§ 79', '§ 1322', '§ 138', '§ 162', '§ 118', '§ 1322', '§ 79', '§ 1322', '§ 1322', '§ 118', '§ 1322', '§ 79', '§ 1322', '§ 1322', '§ 1322', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 7433', '§ 524', '§ 301', '§ 7433', '§ 7433', '§ 524', '§ 524', '§ 1692', '§ 1692', '§ 524', '§ 362', '§ 7430', '§ 7433', '§ 7433', '§ 7433', '§ 362', '§ 507', '§ 523', '§ 1322', '§ 1322', '§ 524', '§ 524', '§ 524', '§ 105', '§ 524', '§ 7433', '§ 7433', '§ 105', '§ 105', '§ 105', '§ 105', '§ 524', '§ 105', '§ 105', '§ 105', '§ 301', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 524', '§ 1322', '§ 362', '§ 1322', '§ 524', '§ 1322', '§ 524', '§ 524', '§ 1322', '§ 524', '§ 524', '§ 524', '§ 1322', '§ 524', '§ 524', '§ 1328', '§ 524', '§ 524', '§ 524', '§ 524', '§ 1322', '§ 1322', '§ 524', '§ 524', '§ 1322', '§ 1322', '§ 524', '§ 1322', '§ 524', '§ 1322', '§ 1322', '§ 524']

§ 162.2 Discharge Injunction and § 524(i) after BAPCPA
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 162.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
The effects of discharge under § 524 were amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)1 in many ways,2 one of which threatens to affect Chapter 13 practice but without much evidence of actual impact.
New § 524(i) was the change to the Bankruptcy Code in 2005 that was least characteristic of BAPCPA:
(i) The willful failure of a creditor to credit payments received under a plan confirmed under this title, unless the order confirming the plan is revoked, the plan is in default, or the creditor has not received payments required to be made under the plan in the manner required by the plan (including crediting the amounts required under the plan), shall constitute a violation of an injunction under subsection (a)(2) if the act of the creditor to collect and failure to credit payments in the manner required by the plan caused material injury to the debtor.3
Consistent with much of BAPCPA,4 this new section is internally inconsistent and not simple of interpretation. The new section seems to say that the “willful failure” of a creditor to credit payments received under a confirmed plan “in the manner required by the plan (including crediting the amounts required under the plan)” constitutes a violation of the discharge injunction under § 524(a)(2) unless the confirmation order is revoked, the plan is in default, or the creditor has not received payments required to be made under the plan. A willful failure of a creditor to credit payments received under a confirmed plan, as just described, constitutes a violation of the discharge injunction only if “the act of the creditor to collect and failure to credit payments in the manner required by the plan caused material injury to the debtor.”
The first part of this new section makes the willful failure of a creditor to credit payments in the manner required by a confirmed plan a violation of the discharge injunction. The second part of the new section requires an additional “act of the creditor to collect” and “material injury” to the debtor. The section could be read to require three conditions before a violation of the discharge injunction arises: willful failure of a creditor to credit payments in the manner required by a confirmed plan; an act of the creditor to collect; and material injury to the debtor.
A confirmed Chapter 13 plan would satisfy the condition that there be a “plan confirmed under this title.” The three conditions after the word “unless”—that the order confirming the plan is revoked, the plan is in default, or the creditor has not received payments required to be made under the plan—are a bit odd in that if any of these circumstances has occurred, it is not likely that a discharge would be entered in the Chapter 13 case. For example, if the order confirming the plan is revoked, the debtor will not become entitled to a discharge and § 524—dealing with the effects of discharge—would not be at issue. Because revocation of confirmation is time restricted to the 180 days after the entry of the confirmation order,5 it is rare that confirmation could be revoked after entry of discharge.
It is conceivable, but unlikely, that new § 524(i) would apply even if no discharge has been entered. To get there, a court would have to conclude that a willful failure of a creditor to credit payments received under a confirmed plan “shall constitute a violation of an injunction under subsection (a)(2)” if all the conditions in § 524(i) are present and without regard to whether a discharge has actually been entered in the case under § 1328(a) or (b). This would be a strained interpretation of new § 524(i). One reported decision suggests that § 524(i) could apply to a mortgage holder that misapplied payments in a Chapter 13 case in which the mortgage will not be discharged at the completion of payments.6 Other courts have concluded that § 524(i) does not apply unless and until the debtor receives a discharge.7
More likely, § 524(i) will apply only after discharge, and then some or all of the words immediately after “unless” become a curiosity. It is possible that a creditor “has not received payments required to be made under the plan” notwithstanding that the debtor has completed payments and is entitled to or has already received a discharge under § 1328(a) or (b). In that circumstance, the new section is not clear whether the “willful failure” to relate to payments that were “received” by the creditor in a manner other than as required by the plan or whether any distribution at variance with the plan excuses any other willful failure to properly credit payments.
If the plan is in default, it is conceivable that a debtor would request and receive a hardship discharge under § 1328(b) and the default would then become a defense in a § 524(i) action with respect to a creditor’s failure to credit payments received under the confirmed plan in the manner required by the plan. Notice that a default under the plan seems to relieve the creditor of exposure for a willful failure to credit payments without regard to whether the default interrupts required payments to the creditor. The conditions that the plan is not in default and that the creditor has received payments required to be made under the plan are disjunctive.
The requirement that the failure to credit payments be “willful” could be a significant barrier to recovery under new § 524(i). Typically, the word “willful” means intentional and in this context a willful failure would be an intentional failure to credit payments in the manner required by the plan. Some notice or knowledge of the “manner required by the plan” would be a likely predicate to a finding of willful failure under new § 524(i). A creditor’s choice to credit payments received under a confirmed plan in a manner different from the manner required by the confirmed plan would constitute a willful failure for purposes of § 524(i).
It is not obvious what the parenthetical “(including crediting the amounts required under the plan)” adds to the immediately prior phrase, “in the manner required by the plan.” As a matter of sentence construction, the parenthetical may relate back to the opening clause, in which case it further defines “willful failure” rather than the protective provision about payments not received. There are at least commas missing here and the omissions make for guesswork that could be material.
The new section does not reveal what “act” of the creditor to collect triggers potential liability under new § 524(i) except to say that the act together with the failure to credit payments must cause “material injury” to the debtor. Would the expenses, including attorneys’ fees, of an action against the creditor for contempt for violation of the discharge injunction constitute “material injury” for § 524(i) purposes? If the failure to credit payments in the manner required by the plan is quickly corrected by the creditor, can the debtor still show material injury caused by an act by the creditor to collect? Why isn’t a violation of the discharge injunction itself a material injury?
There are obvious defenses for the creditor in new § 524(i). Proving that the failure to credit payments in the manner required by the plan was not “willful” would be a defense. A creditor charged with willful failure to properly credit payments will look for a default under the plan and will audit the payments received to show that the creditor did not receive payments that were required to be made under the plan. New § 524(i) provides no remedy in the absence of an “act of the creditor to collect.” Perhaps “material injury” can be limited or eliminated by expeditious and comprehensive corrections in response to the motion for contempt—at least requiring the debtor to mitigate damages. There is no suggested measure of damages in new § 524(i) other than the phrase “material injury.” If contempt is the appropriate remedial action by the debtor, then the creditor’s exposure under new § 524(i) is bounded only by the limits on contempt proceedings.
The convoluted wording of new § 524(i) is fundamentally suspicious. It would have been simple to draft a provision of the Bankruptcy Code that required creditors to correctly credit payments received under confirmed plans and that provided debtors a reasonable remedy if a creditor failed to do so. New § 524(i) starts in that direction but then trips itself with conjunctive, disjunctive and dislocated internal conditions and requirements. The result is that new § 524(i) is an illusory remedy for a significant problem in Chapter 13 practice.
There has long been a problem that creditors have trouble accurately accounting for payments received from trustees and debtors in Chapter 13 cases.8 Foremost, when the Chapter 13 plan manages a defaulted home mortgage, it is common that the confirmed plan cures default and makes regular contract payments in amounts that are not exactly what the mortgage holder or mortgage servicer expects.9 The passage of time or other events contemplated by loan agreements that happen during Chapter 13 cases change the required monthly payments—especially when taxes, insurance and other escrow accounts are involved. Payments from the trustee and payments directly from debtors become mixed up on the books of the mortgage servicer and mistakes are made.10 Often.
Chapter 13 debtors have difficulty remedying this situation, especially after completion of payments under a plan. Too often Chapter 13 debtors get a foreclosure notice in the mail about the same time as the discharge at the completion of payments under their Chapter 13 plan. The books and records of the mortgage holder or mortgage servicer are difficult to decipher and contempt of the discharge injunction has not proven an effective remedy for Chapter 13 debtors.11
Nationwide dissatisfaction with the performance of mortgage lenders and mortgage servicers in Chapter 13 cases12 and failed efforts to negotiate “best practices” for the management of home mortgages through Chapter 13 plans13 have inspired debtors’ attorneys and Chapter 13 trustees to experiment with provisions in plans that require mortgage creditors to apply payments correctly, to give notices of changes in payment terms and to address whether the mortgage is current at or near the completion of payments under the plan.14 When the Chapter 13 plan contains mortgage management provisions, the first-line objection to confirmation from the mortgage creditor is that the provisions for application of payments, notices or determination of currency are inconsistent with the contract rights of the lender and thus violate the prohibition against modification in § 1322(b)(2).15 New § 524(i) has been drawn into this debate in interesting ways.
Some courts have found tension between the antimodification provision of § 1322(b)(2) and the potential liability for violation of the discharge injunction in § 524(i). As stated by the bankruptcy court in In re Anderson,16 a debtor’s § 524(i) right to have payments properly credited by a mortgage holder must be balanced against the protection from modification in § 1322(b)(2): “Section 524(i) provides a remedy. It does not dictate what is permissible under a Chapter 13 plan. Rather, that task is governed by §§ 1322 and 1325.”17 The Anderson court cautioned that only provisions that accurately restate § 524(i) are eligible for inclusion in a confirmable plan.
Mortgage creditors have argued that enactment of the statutory remedy in § 524(i) precludes a Chapter 13 plan from including analogous requirements or conditions in advance of eligibility for discharge. The bankruptcy court in In re Jackson18 explained that § 524(i) does not preclude plan provisions, for example, that declare mortgage arrearages cured at the completion of payments under the plan:
[Section] 524(i) already provides a remedy for a debtor materially injured as a result of a secured creditor’s failure to credit payments in the manner required by the confirmed plan. But it is only available after the debtor obtains a discharge. . . . Moreover, it does not address the problem of hidden fees and charges. . . . This Court finds that the Mortgage Provisions are permissible and that they serve a useful purpose. They do not impermissibly modify the rights of the mortgage holders or the terms of the underlying mortgages. They simply provide a procedural framework for the Debtors to find out whether they are emerging from bankruptcy with a current mortgage, or whether any undisclosed and potentially impermissible fees and charges have been assessed.19
At the other extreme, one bankruptcy court rejected a plan provision that a mortgage creditor must “comply fully with the provisions of 11 U.S.C. § 524(i)” based on the conclusion that it can’t be assumed prospectively that a creditor will not comply with the law.20 Providing in a plan that a creditor must comply with § 524(i) “results in ambiguity with respect to whether the affirmative defenses contained in that section are still available to the creditor.”21
Several courts have addressed whether § 524(i) supports specific plan provisions that manage the relationship between the Chapter 13 debtor and a mortgage creditor, and the conclusions are not all of one mind. For example, the bankruptcy court in In re Patton22 found that § 524(i) was not independent authority for “best practices” provisions in a plan that would manage payment of a home mortgage:
I am not persuaded that [§ 524(i)] authorizes the proposed plan language at issue; it merely provides debtors with a post-discharge remedy in the event a creditor willfully fails to credit payments received under a confirmed plan. The statute, with the remedy it provides, refers specifically to a violation of the injunction under 11 U.S.C. § 524(a)(2), which would not go into effect until after successful completion of the plan, but it has nothing to do with plan provisions.23
In contrast, other courts have cited § 524(i) as support for plan provisions that control how mortgage payments and arrearage payments will be applied. For example, in In re Emery,24 the plan required arrearage payments to be applied to arrearages, “deemed” prepetition arrearages current at confirmation, required ongoing mortgage payments to be applied to the month in which they were made and required mortgage holders or servicers to notify the trustee and the debtor of changes in interest rate or escrow payments. Citing § 524(i), the bankruptcy court was not concerned that the new remedy was not available until completion of payments:
The court agrees with the Debtor that the phrase “credit payments received . . . in the manner required by the plan” contemplates that a debtor will craft plan language which directs the application of payments. When the remedy . . . for failure to comply arises is not the issue.25
Something like new § 524(i) is badly needed in Chapter 13 practice. As written, new § 524(i) makes the willful failure to correctly credit payments a violation of the injunction in subsection (a)(2) of § 524. Section 524(a)(2) provides that a discharge “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not such discharge of such debt is waived.”26 Section 524 does not provide a remedy for violation of the injunction described in subsection (a)(2). Presumably, to enforce new § 524(i), the debtor would bring an action for contempt for violation of the discharge injunction. That action might be brought in the bankruptcy court and might require reopening the bankruptcy case if the case has been closed.
2 Most of the changes to 11 U.S.C. § 524 involve the content and enforceability of reaffirmation agreements that are rarely seen in Chapter 13 practice. See 11 U.S.C. § 524(k).
3 11 U.S.C. § 524(i).
4 See § 3.10 Nine: Malice or Incompetence?.
5 See 11 U.S.C. § 1330(a), discussed in § 224.1 [ Revocation of Confirmation ] § 117.3 Revocation of Confirmation.
6 See In re Hudak, No. 08-10478-SBB, 2008 WL 4850196, at *10–*11 (Bankr. D. Colo. Oct. 24, 2008) (unpublished) (Brooks) (Plan that imposes § 524(i) requirements when mortgage will not be discharged at completion of payments does not impermissibly modify mortgagee’s rights under § 1322(b)(2) and is consistent with legislative history of § 524(i). “[T]he Debtor’s . . . Plan is designed to compel compliance with a confirmed plan and force transparency and proper accounting by Creditor. The Court concludes that 11 U.S.C. § 524(i) does apply to this Creditor. . . . [A]ny creditor having a claim secured by an interest in real property who is misapplying payments may potentially be liable under 524(i). . . . [S]ection 524(i) and companion section 524(j), in the context of section 524, appear as stand-alone provisions within section 524. That is, violation or exclusion from violation is not dependent upon whether the debt will be or is discharged. In other words, whether the debt is discharged or not under 11 U.S.C. § 1328(c)(1) is irrelevant to liability under section 524(i).”).
7 See, e.g., Myles v. Wells Fargo Bank, N.A. (In re Myles), 395 B.R. 599 (Bankr. M.D. La. Oct. 15, 2008) (Dodd) (Section 524(i) does not apply before discharge because of internal reference to § 524(a)(2); therefore, complaint against Wells Fargo does not state claim for relief under § 524(i) when debtors have not yet received discharge. Plaintiffs may have contract claims for violations of confirmed plans.).
8 Reported decisions documenting this problem are legion. See §§ 287.2 [ Documentation and Assigned Claims ] § 135.3 Documentation and Assigned Claims, 308.2 [ Mortgage Claim Issues ] § 138.8 Mortgage Claim Issues and 357.1 [ In General, Including Discharge Hearing and Discharge Injunction ] § 162.1 In General, Including Discharge Hearing and Discharge Injunction.
9 See 11 U.S.C. § 1322(b)(5), discussed in § 81.1 Overview: General Rules for Saving Debtor’s Home, § 83.1 In General: Rake and Contracts before October 22, 1994, § 83.2 Section 1322(e): Contracts after October 22, 1994, § 83.3 Rate of Interest to Cure Default: Contracts before October 22, 1994, § 83.4 Rate of Interest to Cure Default: Contracts after October 22, 1994, § 83.5 Undersecured Mortgage and Interest to Cure Default, § 83.6 Late Charges, Attorneys' Fees, Costs and Other Charges, § 84.1 In General, § 85.1 Demand, Matured and Balloon Loans; “Short-Term” Mortgages before October 22, 1994, § 85.2 Demand, Matured and Balloon Loans; “Short-Term” Mortgages after October 22, 1994, § 85.3 Prepetition Foreclosure Judgment: Curing Default, Payment in Full or Modification under § 1322(c)(2)?, § 85.6 Direct Payment of Mortgage or Payment by Trustee and § 138.8 Mortgage Claim Issues.
10 See § 308.2 [ Mortgage Claim Issues ] § 138.8 Mortgage Claim Issues.
11 See § 357.1 [ In General, Including Discharge Hearing and Discharge Injunction ] § 162.1 In General, Including Discharge Hearing and Discharge Injunction.
12 See §§ 118.1 [ Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman ] § 79.1 Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman, 308.2 [ Mortgage Claim Issues ] § 138.8 Mortgage Claim Issues and 357.1 [ In General, Including Discharge Hearing and Discharge Injunction ] § 162.1 In General, Including Discharge Hearing and Discharge Injunction.
14 See § 118.1 [ Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman ] § 79.1 Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman.
15 See 11 U.S.C. § 1322(b)(2), discussed in § 118.1 [ Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman ] § 79.1 Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman.
16 382 B.R. 496 (Bankr. D. Or. Feb. 12, 2008) (Radcliffe).
17 382 B.R. at 503.
18 No. 09-15137 EEB, 2009 WL 5943245 (Bankr. D. Colo. Aug. 31, 2009) (unpublished) (Brown).
19 2009 WL 5943245, at *5.
20 In re Booth, 399 B.R. 316, 328 (Bankr. E.D. Ark. Jan. 14, 2009) (Taylor).
21 399 B.R. at 328.
22 Nos. 08-23038, 08-024709, 07-28262, 2008 WL 5130096 (Bankr. E.D. Wis. Nov. 19, 2008) (unpublished) (McGarity).
23 2008 WL 5130096, at *2. Accord In re Collins, No. 07-30454, 2007 WL 2116416 (Bankr. E.D. Tenn. July 19, 2007) (unpublished) (Stair) (Section 524(i) creates a violation of the discharge injunction when a creditor willfully fails to credit payments received under a confirmed Chapter 13 plan, but new subsection does not support language in plan that is inconsistent with rights of holder of claim that is protected from modification by § 1322(b)(2); plan that specifies how and when mortgage holder may credit payments is measured against § 1322(b)(2), not § 524(i).).
24 387 B.R. 721 (Bankr. E.D. Ky. May 16, 2008) (Howard).
25 387 B.R. at 724.
26 11 U.S.C. § 524(a)(2).
Olick v. City of Easton (In re Olick), 632 F. App'x 63 (3d Cir. Jan. 29, 2016) (Fisher, Jordan, Vanaskie) (City did not impermissibly seek to collect prepetition taxes that were discharged in prior Chapter 13 case but instead was permissibly collecting postpetition taxes that were not paid and survived prior discharge. In prior Chapter 13 case, debtor had both pre- and postpetition tax liabilities. County Tax Claim Bureau wrote off prepetition debt but sought to collect postpetition delinquent taxes after completion of payments and discharge in prior case. County's postdischarge effort to collect unpaid postpetition taxes did not violate discharge injunction.). Accord Olick v. Northampton Cnty. (In re Olick), No. 15-2471, 2016 WL 362410 (3d Cir. Jan. 29, 2016) (per curiam) (Fisher, Jordan, Vanaskie).).
In re Kiriazis, No. 15-8036, 2016 WL 386586, at *4 (B.A.P. 6th Cir. Feb. 2, 2016) (unpublished) (Humphrey, Opperman, Wise) (Counsel's statement in open court that Specialized Loan Servicing erroneously sought to collect a discharged debt was binding and precluded late-filed challenge to final order finding a willful violation of the discharge injunction. After discharge, Chapter 13 debtors received a postdischarge statement from Specialized Loan Servicing that included a past-due amount for fees that accumulated during the bankruptcy case. Debtors alleged a violation of the discharge injunction and sought damages. In open court, counsel for Specialized Loan Servicing explained that an internal error automatically included fees that should not have been included in the statement to the debtors. The bankruptcy court found that Specialized Loan Servicing willfully violated the discharge injunction in § 524. "SLS's only argument appears to be that [its attorney] did not mean what she said. . . . [The attorney's] statements on the record were an admission that SLS willfully violated the discharge injunction. . . . [T]here are no grounds to reopen the case and set aside the Violation Order.").
Crayton v. JPMorgan Chase Bank, N.A, No. 1:16-CV-577-TWT, 2017 WL 5133224, at *4 (N.D. Ga. Nov. 6, 2017) (Thrash) (Section 524(i) became effective on October 17, 2005, and does not apply to a Chapter 13 case filed on September 2, 2004. Even if § 524(i) applied, debtor failed to contest Chase’s claim that it properly applied arrearage payments during the Chapter 13 case. Challenges to foreclosure under other statutes and theories fail because debtor produced no evidence in response to Chase’s summary judgment motion. “Section 524(i) was enacted on April 20, 2005, and became effective on October 17, 2005. . . . It only applies to bankruptcy cases filed after October 17, 2005. . . . The Plaintiff filed for bankruptcy on September 2, 2004, meaning that § 524(i) does not apply to his bankruptcy case.”).
In re Papic, No. 17-4060 DSF, 2017 WL 6947912 (C.D. Cal. Oct. 10, 2017) (Fischer) (Bankruptcy court erred in denying debtor’s motion for show-cause order to determine whether Fannie Mae and Seterus violated discharge injunction by threatening foreclosure after completion of payments under Chapter 13 plan that cured default. Fannie Mae and Seterus claimed they were owed more than the arrearages paid through the confirmed plan but that claim would not resolve whether they have violated discharge injunction.).
Nicholson v. IRS, No. 4:14cv667-MW/CAS, 2015 WL 6152922, at *3-*5 (N.D. Fla. Sept. 15, 2015) (Walker) (Failure to exhaust administrative remedies under 26 U.S.C. § 7433(d)(1) required dismissal of complaint that IRS violated discharge injunction. "The way to assert an administrative claim relating to a violation of a § 524 discharge injunction is set out in 26 C.F.R. § 301.7433[-]2. Section 301.7433[-]2(e) says how to make such a claim. Section 301.7433[-]2(d) prevents a claimant from maintaining such an action in bankruptcy court until the earlier of when the IRS renders its decision on the administrative claim or six months from when the claim is brought to the IRS. The debtor's complaint does not suggest that either have come to pass. The exhaustion requirement in § 7433(d) is a non-jurisdictional affirmative defense. . . . [T]he bankruptcy court retains statutory authority to find the IRS in contempt and impose sanctions so long as the relief is not 'damages' under § 7433(b).").
Moore v. Caliber Home Loans, Inc., No. 1:14-cv-852, 2015 WL 5162482 (S.D. Ohio Sept. 3, 2015) (Barrett) (Failure to correctly credit plan payments was violation of discharge injunction; remedy lies in action for civil contempt before bankruptcy court as there is no private right of action under § 524(i).).
McLean v. Greenpoint Credit LLC, 515 B.R. 841, 846-49 (M.D. Ala. Aug. 25, 2014) (Watkins) (Filing proof of claim for discharged debt can be violation of discharge injunction. Citing Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. June 10, 2014) (Goldberg, Hull, Walter), "[i]f filing a proof of claim is a means of collecting a debt under the FDCPA, then it also is an act or attempt to collect a debt under the bankruptcy code's discharge injunction. . . . Because the proof of claim is for a debt that was discharged in the . . . previous bankruptcy, Green Tree has violated the discharge injunction and may be held liable if such violation was willful. . . . [T]he monetary relief awarded in this case is authorized by section 105. . . . Under [Dawson v. Washington Mutual Bank, F.A. (In re Dawson), 390 F.3d 1139 (9th Cir.2004),] the court affirms the award of actual damages. Claims of emotional distress are actual damages, and pecuniary loss is not a prerequisite to the award. . . . Damages for emotional distress are proper where the debtor clearly establishes that he or she suffered significant harm and demonstrates a causal connection between that significant harm and the willful violation of the discharge injunction. . . . Emotional harm must be significant; fleeting or trivial anxiety or distress is not sufficient. . . . There are several ways a debtor can clearly establish significant emotional harm, including but not limited to offering corroborating medical evidence, offering corroborating non-expert testimony, showing the violator engaged in egregious conduct, or testifying (without corroboration) about circumstances in which a reasonable person would obviously suffer significant emotional harm. . . . The testimony of the [debtors], which the Bankruptcy Court found credible and Green Tree does not dispute, is 'corroborating non-expert testimony' sufficient to clearly establish significant emotional harm. The [debtors] are not required to meet a 'reasonable person' standard . . . . [T]heir testimony established the causal connection between significant emotional harm and Green Tree's action. . . . [Section] 105 does not prohibit the Bankruptcy Court from imposing an order awarding sanctions to influence parties' future behavior, regardless of whether that sanction is labeled coercive or punitive. . . . [T]he $50,000 sanction ordered in this case is warranted."), aff'g No. 13-1008-WRS, 2013 WL 5963358, at *3-*4 (Bankr. M.D. Ala. Nov. 8, 2013) (Sawyer) (Green Tree violated discharge injunction when it filed proof of claim for deficiency discharged in prior Chapter 7 case; actual damages awarded of $25,000 for emotional distress, attorney fees, plus coercive sanctions of $50,000. "Green Tree's violation of the discharge injunction caused emotional distress to the Debtors, and an award of actual damages is appropriate. . . . [A]ttorney fees are also an appropriate award of actual damages in this case. . . . Additionally, the Court may impose monetary sanctions as a coercive measure to ensure the creditor's future compliance with the discharge injunction. . . . Such a sanction may be particularly necessary in a case where a creditor has displayed inadequate procedures in dealing with stopping debt collection after a discharge is entered. . . . Green Tree is capable of electronically scanning the daily bankruptcy filings for a social security number matching that of a debtor owing them money, allowing them to file claims in those cases. On the other hand, when Green Tree needs to stop collection efforts due to a discharge injunction, the procedures are more obtuse. . . . It is noteworthy to the Court that an outfit like Green Tree is capable of being incredibly technologically savvy with respect to debt collection while being seemingly hamstrung by technological hurdles when it comes to halting that debt collection. Coercive sanctions are appropriate here to encourage Green Tree take a fresh look at their internal procedures to ensure that they are designed to prevent violations of § 524.").
Patrick v. PYOD, LLC, 39 F. Supp. 3d 1032, 1034-36 (S.D. Ind. Aug. 20, 2014) (Young) (Citing Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. June 10, 2014) (Goldberg, Hull, Walter), FDCPA can apply to time-barred proofs of claim. "[U]nder Seventh Circuit precedent, the court can apply both the Bankruptcy Code and the FDCPA. . . . [T]he court declines to adopt the position of several other district courts outside of the Seventh Circuit that find the bankruptcy code precludes the application of the FDCPA to time-barred proofs of claim. . . . [H]olding that the FDCPA and Bankruptcy Code can be applied simultaneously does not mean that they both must be applied in every potential Bankruptcy Code violation; the communication still must be in an attempt to collect on a debt. . . . There is no established bright-line rule that can be used in order to determine if a communication constitutes a debt collection activity under the FDCPA. . . . Rather, there are 'several factors that come into play in the commonsense inquiry of whether a communication from a debt collector is made in connection with the collection of any debt.' . . . The most prominent of these factors are: (1) the presence or absence of a demand for payment; (2) the nature of the parties' relationship; and (3) the purpose and context of the communications. . . . By filing a proof of claim, the creditor creates the misleading impression to the debtor that the debt collector can legally enforce the debt. . . . The least sophisticated consumer would be unaware that such a claim is time-barred and thus unenforceable. . . . [A]s the Eleventh Circuit found, the court concludes that such a filing is 'unfair,' 'unconscionable,' 'deceptive,' and 'misleading' within the scope of § 1692e and § 1692f.").
Owens v. JP Morgan Chase Bank, No. 12-1081, 2013 WL 2033149 (W.D. Pa. May 14, 2013) (unpublished) (Mitchell) (Alleged violation of discharge injunction must be addressed in bankruptcy court through § 524(i).).
In re Parker, No. 14-44083 CN, 2019 WL 386842 (Bankr. N.D. Cal. Jan. 29, 2019) (Novack) (Citing Lorenzen v. Taggart (In re Taggart), 888 F.3d 438 (9th Cir. Apr. 23, 2018) (Leavy, Paez, Bea), cert. granted, No. 18-489, 2019 WL 98543 (U.S. Jan. 4, 2019), HOA’s good-faith belief that the discharge injunction did not apply to its claim for pre- and postpetition fees, costs and assessments precludes an award of contempt damages notwithstanding that compensatory and punitive damages are appropriately awarded under § 362(k) for violation of the automatic stay.).
In re Ibe, No. 11-12728-DM, 2018 WL 5255348 (Bankr. N.D. Cal. Oct. 19, 2018) (Montali) (Mortgage servicer violated discharge injunction by sending coercive and threatening notices warning Chapter 13 debtor to maintain insurance and winterize condo units with respect to which stay relief was granted before discharge.).
In re Witcher, No. 13-00614, 2018 WL 4557610 (Bankr. D.D.C. Sept. 20, 2018) (Teel) (District of Columbia did not violate discharge injunction when it sought to collect taxes for a tax year that should have been included in the claim it filed in the completed Chapter 13 case. Taxes for prepetition year at issue were not dischargeable in Chapter 13 and could be collected without violating discharge injunction notwithstanding that taxing authority should have included the taxes in its proof of claim.).
In re Thal, No. 09-12434-LMI, 2018 WL 2078795, at *3–*8 (Bankr. S.D. Fla. May 2, 2018) (Isicoff) (IRS intercept of Social Security benefits violated discharge injunction when confirmed plan paid nondischargeable principal portion of tax debt in full. Bankruptcy court has authority to order IRS to return Social Security benefits seized in violation of the discharge injunction without requiring debtor to first exhaust administrative remedies. Debtor must exhaust administrative remedies against IRS before bankruptcy court can award damages, fees or costs for violation of discharge injunction. Bankruptcy court is without authority to award punitive damages against IRS for violation of discharge injunction. “[N]ot knowing that the interception was a violation does not excuse the IRS’s intentional violation of the discharge injunction. . . . [T]he IRS Slattery Claim was discharged by payment in full under the Slattery Plan. . . . [N]othing in 26 U.S.C. § 7430 or § 7433 impacts my ability to determine whether the IRS must return the funds to Mr. Slattery . . . . [I]n 1998 Congress also amended 26 U.S.C. § 7433(b) . . . . [T]he requirement of 26 U.S.C. § 7433(d)(1) that any claim for damages shall not be awarded until ‘the plaintiff has exhausted the administrative remedies’ now includes claims for violations of the automatic stay and the discharge injunction. . . . [S]ubsection 7433(e) makes very clear that section 7433 applies to any claim for damages for violation of the discharge injunction. Thus, except in the case of a claim under 11 U.S.C. § 362(k), a plaintiff must make any claim to the bankruptcy court, not the district court, and the claim can only be made after exhaustion of administrative remedies.”), amended and superseded by No. 09-12434-LMI, 2018 WL 2182304 (Bankr. S.D. Fla. May 9, 2018) (Isicoff).).
In re Parker, 576 B.R. 1 (Bankr. N.D. Cal. Aug. 24, 2017) (Novack) (Material disputed facts preclude summary judgment for the most part in Chapter 13 debtor’s action against homeowners’ association for violations of the automatic stay and discharge injunction with respect to a condominium surrendered through confirmed plan. Coercive offer of settlement can be a violation of stay and/or discharge injunction when it is a veiled effort to collect prepetition fees and assessments. Postpetition assessments and other association actions could be efforts to collect prepetition debt or to punish the debtor that could violate the stay and/or discharge injunction. Renting the debtor’s unit after surrender but while debtor was still record owner could violate stay and/or discharge injunction when rental proceeds exceeded postpetition amounts owed by the debtor.).
In re Ladona, No. 11-10400-BAH, 2017 WL 2437233, at *3 (Bankr. D.N.H. June 2, 2017) (Harwood) (IRS did not violate discharge injunction by collecting interest after bankruptcy when tax debt was paid during Chapter 13 case but without interest. Tax debt was entitled to priority under § 507(a)(8) and was nondischargeable under § 523(a)(1)(B) because the return was filed late. Although tax claim was paid in full, plan could not provide for postpetition interest because of § 1322(b)(10). “A debtor’s personal liability for post-petition interest on a nondischargeable tax claim survives bankruptcy to the extent that it is not provided for by the plan. . . . Pursuant to 11 U.S.C. § 1322(b)(10), a plan may only provide for the payment of post-petition interest on ‘unsecured claims that are nondischargeable under section 1328(a),’ when ‘the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims.’ Here, the Plan did not provide for payment in full of all allowed claims, and thus could not, as a matter of law, provide for the payment of post-petition interest on the IRS’s claim. . . . [P]ost-petition interest . . . continued to accrue . . . . [T]he discharge injunction does not bar the collection of the amount of that interest.”).
Ridley v. M & T Bank (In re Ridley), 572 B.R. 352, 357-66 (Bankr. E.D. Okla. May 31, 2017) (Cornish) (M & T Bank violated § 524(i) and is in civil contempt for declaring defaults, sending erroneous notices and adding improper fees, charges and corporate advances after concurring in 3002.1 notice that mortgage was current and all delinquencies cured. “M & T Bank has attempted . . . to collect from the Plaintiff Fees, Charges and Expenses that were not disclosed in the course of the Plaintiff’s Chapter 13 Bankruptcy as required by F.R. Bankr. P. 3002.1. . . . [M & T’s witness] did not know what the charges labeled ‘Recoverable Corporate Advance’ specifically represented, nor did he know why they were charged to Ridley. . . . As of trial, . . . M & T Bank has removed all fees from Ridley’s account and his loan has been deemed current. . . . [I]f a creditor fails to properly credit payments made under a confirmed plan, § 524(i) treats such conduct as a violation of the discharge injunction even if the underlying debt is not discharged. . . . To remedy a violation of § 524(i), debtors appeal to the contempt powers of the court under § 105(a). . . . This case represents one of the classic situations that led to the adoption of § 524(i): a chapter 13 debtor makes all the required payments on long-term debt required through the life of his confirmed plan, receives a discharge, and is then told that his mortgage is in default, he owes additional charges, and is threatened with foreclosure. . . . Section 524(i) presents a remedy for such cases. . . . In the span of just a few days, M & T Bank went from declaring to this Court that Ridley was current and had made all payments due during his plan to declaring that he was in default, relying on its records to support both positions. . . . M & T Bank willfully misapplied his payments and disregarded the bankruptcy process so that Ridley would not be brought current in its records. Sending erroneous mortgage statements seems designed to harass and intimidate Ridley into making a payment he did not owe. . . . M & T Bank’s failure to [properly] credit payments to Ridley’s account resulted in an additional monthly payment charge, default fees, assessment of other fees, including attorney fees for foreclosure, and unexplainable ‘Corporate Recovery Advance’ fees. M & T Bank’s representative stated that these fees were to be tacked on to Ridley’s mortgage and recovered at the end of his mortgage. . . . [A]n award of actual damages for attorney fees and costs is appropriate. . . . Ridley is entitled to recover actual damages for lost wages. . . . Punitive damages are an appropriate sanction when the discharge injunction is violated. . . . M & T Bank’s conduct in this case is egregious and offensive to this Court. . . . [T]he Court declares Ridley current on his account . . . . The Court also orders M & T Bank to remove from Ridley’s account all charges and fees based upon its showing of default, including the late charges, Foreclosure Attorney Fees, Recoverable Corporate Advance fees, and Insurance Inspection Fees. It shall make no attempt to collect such fees from Ridley. . . . [A]nd punitive damages of $ 12,000.00.”).
Wallis v. IRS (In re Wallis), No. 14-1426 HRT, 2014 WL 5801438 (Bankr. D. Colo. Nov. 7, 2014) (Tallman) (26 U.S.C. § 7433(e) is exclusive remedy for violation of discharge injunction by IRS; however, no damages may be awarded by bankruptcy court until debtor has exhausted administrative remedies.).
Pointer v. United States (In re Pointer), 510 B.R. 433 (Bankr. M.D. Ga. May 7, 2014) (Smith) (Citing 26 U.S.C. § 7433, debtors must exhaust administrative remedies before bringing damages action in bankruptcy court for violation of discharge injunction by the IRS.).
Cirillo v. Valley Baptist Health Sys. (In re Cirillo), No. 13-01002, 2014 WL 1347362, at *4 (Bankr. S.D. Tex. Apr. 3, 2014) (Isgur) (Adversary proceeding for violation of discharge injunction proceeds under § 105 pursuant to bankruptcy court's authority to enforce its own orders. "Debtors who sue based on violations of court orders are not seeking the creation of new rights of action, but are merely seeking a remedy for the violation of existing rights explicitly provided in the Code. While § 105 does not itself create a private right of action, a court may invoke § 105 if the equitable remedy utilized is necessary to preserve a right provided elsewhere in the Code. . . . 11 U.S.C. § 105 authorizes bankruptcy courts to issue any judgments necessary or appropriate to carry out the provisions of the Bankruptcy Code. . . . There is no need to determine whether there is an implied private right of action under § 524 or § 105 because there is an express remedy available under § 105. . . . A remedy in the form of a private cause of action is consistent with the plain language of § 105." An adversary proceeding is the appropriate vehicle when debtor seeks injunctive relief in addition to contempt.).
Kilbourne v. CitiMortgage, Inc. (In re Kilbourne), 507 B.R. 219, 223 (Bankr. S.D. Ohio Mar. 19, 2014) (Preston) (Interpreting Pertuso v. Ford Motor Credit Co., 233 F.3d 417 (6th Cir. Nov. 22, 2000) (Nelson, Boggs, Norris), contempt action for violation of discharge injunction must be brought in bankruptcy court that entered discharge, but adversary proceeding can proceed notwithstanding that motion is proper platform. Debtors sought contempt and sanctions and a return of late fees and other charges paid to defendant when mortgage was refinanced. Bankruptcy Rule 7001(a) requires actions to recover money or property to proceed by adversary proceeding. "'To dismiss on procedural grounds alone would be to elevate form over substance. This is particularly true where—as here—an adversary proceeding provides more procedural protection for the defendant than does a contested matter brought by way of motion. Furthermore, "even when filed as a motion, a contempt action can be handled in the same procedural manner as an adversary proceeding should a court so choose."'").
Laudani v. Wells Fargo N.A. (In re Laudani), 506 B.R. 19 (Bankr. D. Mass. Mar. 3, 2014) (Feeney) (Claim that mortgagee violated discharge injunction was not a separate cause of action but was properly remedied by motion for contempt.).
In re Hamilton, No. 08-60225-13, 2014 WL 231967 (Bankr. D. Mont. Jan. 22, 2014) (Kirscher) (Citing 26 C.F.R. § 301.7433-2, civil contempt action against IRS for violation of discharge injunction cannot proceed until debtor has exhausted administrative remedies.).
Guenot v. Candica LLC (In re Guenot), No. 12-1748, 2014 WL 67320, at *3 (Bankr. D.N.J. Jan. 2, 2014) (Ferguson) (Filing proof of claim for previously discharged debt not a violation of discharge injunction when no damages established. "[T]he existence of actual damages is an essential element of a cause of action for a violation of the discharge injunction . . . . To the extent there are any damages in this case they are self-created, and the law is clear that self-created damages are not compensable . . . . The attorneys' fees, since they were created solely in pursuit of this complaint, are also not compensable damages.").
Loe v. Green Tree Servicing LLC (In re Loe), No. 12-04108-DML, 2013 WL 6628960, at *9-*10 (Bankr. N.D. Tex. Dec. 17, 2013) (Lynn) (Green Tree violated discharge injunction in prior Chapter 7 case and automatic stay in current Chapter 13 case by attempting to collect note through multiple phone calls after debtor surrendered property. "Green Tree's systemic failures to ensure consistency between the conduct of its bankruptcy and collections departments in this case is akin to the conduct of which this court disapproved in [prior case]. . . . In that case, as in this case, one department of the creditor improperly removed the debtor's account from protected status, leading another department to believe that collecting the account was authorized. . . . The result is the same; neither creditor can 'contend that it did not knowingly violate the discharge injunction because its left hand did not know what its right hand was doing.' . . . The similarity between Green Tree's failures in the past, recorded in a published opinion, and its failures in this case weigh against the credibility of evidence presented concerning the efficacy of Green Tree's internal controls.").
Hye Rhee Kong v. Kelkris Assocs., Inc. (In re Hye Rhee Kong), No. 13-5119-SLJ, 2013 WL 6923063, at *2 (Bankr. N.D. Cal. Nov. 15, 2013) (Johnson) ("[R]emedy for violations of the discharge injunction is contempt only and § 524 does not create a private right of action. . . . Compensatory civil contempt allows an aggrieved debtor to obtain compensatory damages and attorneys' fees. . . . Plaintiff's demand for punitive damages or other non-compensatory damages is unlikely to succeed.").
Englert v. Ocwen Loan Servicing, LLC (In re Englert), 495 B.R. 266, 270-74 (Bankr. W.D. Pa. July 8, 2013) (Deller) (Ocwen sanctioned for failing to comply with discovery orders in adversary proceeding for damages and injunctive relief for violation of § 524(i) and violation of discharge injunction. Debtors sought damages and an injunction because Ocwen failed to credit the payment of prepetition arrearages and Ocwen continued to send statements indicating past-due expenses and attorney fees. "[T]here is no private right of action under 11 U.S.C. § 524 which is the basis of the Debtors' complaint. . . . Not all courts agree that an adversary alleging a violation pursuant to 11 U.S.C. § 524 can be treated as a motion for contempt . . . . [E]ven if the Court was to treat the Debtors' Complaint as a motion for contempt, . . . it is not clear from the statement that Ocwen is actually attempting to presently collect those sums listed in the Assessed Fees/Outstanding Expenses. Absent an attempt to collect a discharged debt, there is no disobeyance of the court ordered discharge and, accordingly, no contempt of court. . . . Although the Court will not grant the Complaint, it nevertheless finds that Ocwen failed to comply with an order of this Court compelling discovery. Pursuant to Fed.R.Bankr.P. 7037, the Court may impose sanctions . . . . Ocwen will be required to revise the monthly billing statements sent to the Debtors commensurate with its own arguments. That is, all future billing statements commencing forthwith shall not include any reference to fees and expenses that Ocwen is not attempting to collect. Those sections of the billing statement reflecting prepetition or unauthorized postpetition outstanding fees and expenses shall reflect zero balances to avoid future confusion. In addition, Ocwen shall immediately take whatever steps are required internally to remove all reference to these costs as outstanding.").
Pompa v. Wells Fargo Home Mortg., Inc. (In re Pompa), No. 11-3651, 2012 WL 2571156, at *8 (Bankr. S.D. Tex. June 29, 2012) (Isgur) (Section 524(i) applies to any willful failure to credit payments received under plan without regard to whether the debt involved was discharged. "[I]f § 524(i) applied only to discharged debts, the provision would be superfluous; a failure to credit plan payments on discharged debts would violate the discharge injunction regardless of whether § 524(i) were enacted. The Court concludes that § 524(i) was intended to provide a remedy for failure to credit payments on debts not discharged under the plan. Deeming willful misapplication of plan payments a violation of the discharge injunction under § 524(i) does not impermissibly modify home mortgage lenders' rights in violation of § 1322(b)(2); it simply enforces the plan provisions and ensures that the completion of the plan will actually result in a fresh start for the debtor.").
Mattox v. Wells Fargo, NA (In re Mattox), No. 10-5041, 2011 WL 3626762, at *7 (Bankr. E.D. Ky. Aug. 17, 2011) (Wise) (Section 524(i) provides remedy for misapplication of plan payments once discharge injunction is entered, buttressing conclusion that misapplication of payments may also constitute willful stay violation. "This Court cannot believe that Congress intended to provide debtors a remedy post-discharge while leaving debtors vulnerable in a post-confirmation, pre-discharge 'purgatory' period. The remedy for this post-confirmation, pre-discharge period, quite simply, is found under § 362(k).").
In re Jackson, No. 09-15137 EEB, 2009 WL 5943245, at *5 (Bankr. D. Colo. Aug. 31, 2009) (unpublished) (Brown) (Section 524(i) does not preclude plan provision to declare mortgage arrearages cured at the end of a Chapter 13 case. "[Section] 524(i) already provides a remedy for a debtor materially injured as a result of a secured creditor's failure to credit payments in the manner required by the confirmed plan. But it is only available after the debtor obtains a discharge. . . . Moreover, it does not address the problem of hidden fees and charges. . . . This Court finds that the Mortgage Provisions are permissible and that they serve a useful purpose. They do not impermissibly modify the rights of the mortgage holders or the terms of the underlying mortgages. They simply provide a procedural framework for the Debtors to find out whether they are emerging from bankruptcy with a current mortgage, or whether any undisclosed and potentially impermissible fees and charges have been assessed.").
In re Winston, 416 B.R. 32, 37 (Bankr. N.D.N.Y. May 7, 2009) (Littlefield) (Section 524(i) is post-discharge remedy that does not support plan provisions that conflict with § 1322(b)(2). Court rejects debtor's "argument that § 524(i) stands as an outright exception to § 1322(b)(2), to the extent it protects her from the improper crediting of her plan payments. . . . Section 524(i) contains no language indicating that it is anything other than a post-discharge remedy.").
In re Booth, 399 B.R. 316, 328 (Bankr. E.D. Ark. Jan. 14, 2009) (Taylor) (Provision in plan that mortgage creditor must "comply fully with the provisions of 11 U.S.C. § 524(i)" is improper, since it can't be assumed prospectively that creditor will not comply with law. "No basis or purpose exists for prophylactically and contractually compelling a creditor to comply with the law." Providing in plan that creditor must comply with § 524(i) "results in ambiguity with respect to whether the affirmative defenses contained in that section are still available to the creditor.").
In re Patton, Nos. 08-23038, 08-024709, 07-28262, 2008 WL 5130096, at *2 (Bankr. E.D. Wis. Nov. 19, 2008) (unpublished) (McGarity) (Section 524(i) is not independent authority for "best practices" provisions of plan that would manage payment of home mortgages; some provisions impermissibly modify rights of mortgage holder under § 1322(b)(2). "I am not persuaded that [§ 524(i)] authorizes the proposed plan language at issue; it merely provides debtors with a post-discharge remedy in the event a creditor willfully fails to credit payments received under a confirmed plan. The statute, with the remedy it provides, refers specifically to a violation of the injunction under 11 U.S.C. § 524(a)(2), which would not go into effect until after successful completion of the plan, but it has nothing to do with plan provisions. . . . [T]he issue before the court is not whether or not the creditors violated section 524(i). The real issue is whether or not the plans, as proposed, are confirmable[.]".).
In re Hudak, No. 08-10478-SBB, 2008 WL 4850196, at *10-*11 (Bankr. D. Colo. Oct. 24, 2008) (unpublished) (Brooks) (Plan that imposes § 524(i) requirements when mortgage will not be discharged at completion of payments does not impermissibly modify mortgagee's rights under § 1322(b)(2) and is consistent with legislative history of § 524(i). "[T]he Debtor's . . . Plan is designed to compel compliance with a confirmed plan and force transparency and proper accounting by Creditor. The Court concludes that 11 U.S.C. § 524(i) does apply to this Creditor. . . . [A]ny creditor having a claim secured by an interest in real property who is misapplying payments may potentially be liable under 524(i). . . . [S]ection 524(i) and companion section 524(j), in the context of section 524, appear as stand-alone provisions within section 524. That is, violation or exclusion from violation is not dependent upon whether the debt will be or is discharged. In other words, whether the debt is discharged or not under 11 U.S.C. § 1328(c)(1) is irrelevant to liability under section 524(i).").
Myles v. Wells Fargo Bank, N.A. (In re Myles), 395 B.R. 599 (Bankr. M.D. La. Oct. 15, 2008) (Dodd) (Section 524(i) does not apply before discharge because of internal reference to § 524(a)(2), therefore complaint against Wells Fargo does not state claim for relief under § 524(i) when debtors have not yet received discharge. Plaintiffs may have contract claims for violations of confirmed plans.).
In re Emery, 387 B.R. 721 (Bankr. E.D. Ky. May 16, 2008) (Howard) (New § 524(i) supports plan provisions that control how mortgage payments and arrearage payments will be applied by mortgage holders and servicers. Plan required arrearage payments to be applied to arrearages, "deemed" prepetition arrearages current at confirmation, required ongoing mortgage payments to be applied to the month in which they were made and required mortgage holder or servicer to notify the trustee, the debtor and the attorney for the debtor of any changes in interest rate or escrow payments. "The court agrees with the Debtor that the phrase 'credit payments received . . . in the manner required by the plan' contemplates that a debtor will craft plan language which directs the application of payments. When the remedy . . . for failure to comply arises is not the issue.").
In re Anderson, 382 B.R. 496 (Bankr. D. Or. Feb. 12, 2008) (Radcliffe) (Debtors' § 524(i) right to have payments properly credited by mortgage holder must be balanced against protection from modification under § 1322(b)(2). Citing In re Collins, No. 07-30454, 2007 WL 2116416 (Bankr. E.D. Tenn. July 19, 2007): "Section 524(i) provides a remedy. It does not dictate what is permissible under a Chapter 13 plan. Rather, that task is governed by §§ 1322 and 1325." A plan provision that would deem the plan current with respect to mortgages is probably permissible, but a "default rule" that deems the plan current at discharge unless the mortgage holder obtains a court order otherwise is unnecessary and is inconsistent with local rules. A provision inaccurately restating § 524(i) is inappropriate. Aside from plan provisions "requiring 'extra' notice to Debtors' counsel and the trustee," most plan provisions purporting to protect the debtors' § 524(i) rights are inconsistent with § 1322(b)(2) or § 1322(e).).
In re Ballard, No. 07-03203-JW, 2007 WL 7340479 (Bankr. D.S.C. Sept. 13, 2007) (Waites) (Plan can include "best practices" provisions for management of mortgage debt to comply with § 524(i) without violating mortgage creditor's rights under § 1322(b)(2). Plan included a requirement that the mortgage creditor "otherwise comply with 11 U.S.C. § 524(i).").
In re Collins, No. 07-30454, 2007 WL 2116416 (Bankr. E.D. Tenn. July 19, 2007) (unpublished) (Stair) (Section 524(i) creates a violation of the discharge injunction when a creditor willfully fails to credit payments received under a confirmed Chapter 13 plan, but new subsection does not support language in plan that is inconsistent with rights of holder of claim that is protected from modification by § 1322(b)(2); plan that specifies how and when mortgage holder may credit payments is measured against § 1322(b)(2), not § 524(i).).