General Bankruptcy Info, New York

4 Districts

Northern District

• Albany
• Utica
• Syracuse

Southern District

• Manhattan
• White Plains
• Poughkeepsie

Eastern District

• Brooklyn
• Central Islip

Western District

• Buffalo
• Rochester

Typically, the following bankruptcy fees/costs are considered recoverable:

• MFR fees
• POC fees
• Plan review fees
• Plan objection fees
• Notice of default fees

Typically, the following bankruptcy fees/costs are considered non-recoverable:

• PPFN fees
• Notice of Final Cure fees
• Payment Change fees
• Loss mitigation fees
• Notice of Appearance fees

Recorded assignments may be required during bankruptcy dependent upon the matter before the Court. Some Judges will require same for a Motion for Relief. Proof of Claims may be amended to add a recorded assignment, or an unrecorded assignment can be included.

Unrecorded assignments may be recorded during bankruptcy.

The following bankruptcy documents must be signed by the servicer:

• Eastern District – RELIEF FROM STAY – REAL ESTATE AND COOPERATIVE APARTMENTS worksheet for MFR’s must be signed by the servicer
• Southern District – RELIEF FROM STAY – REAL ESTATE AND COOPERATIVE APARTMENTS worksheet for MFR’s must be signed by the servicer
• Northern District -the Certification of Payment History on the Note and Mortgage Dated [ ] and Related Information form must be signed by servicer.

If no equity exists to secure the mortgage (junior lien), the debtor may be able to strip-off a wholly unsecured junior lien through filing a motion. The process to do so varies by district:

• In the Eastern and Southern Districts the approved Chapter 13 plans for the jurisdictions require a separate motion to be filed to strip-off a wholly unsecured junior lien.
• Northern District – the lien strip may be accomplished by indicating the intent to strip the lien in the filed and noticed Chapter 13 plan. If the collateral is the Debtor’s principal residence and the Debtor seeks to void a wholly unsecured junior mortgage lien, a separate affidavit providing evidence of value of the property and the amount of each senior lien against the property is to be filed and served upon the affected creditor. Upon confirmation of the plan, Debtor shall submit an order voiding the mortgage lien.
• Western District – the national Chapter 13, Official Form 113” is required which allows for lien strips within the plan but each Judge in the district has his own case management Order which negates the language in the plan. as follows:
  • Judge Bucki’s Case Management Order changes Section 3.2 of the national plan as follows “Except as indicated hereafter, all requests to determine the value of a secured claim must be brought by stand−alone motion under 11 U.S.C. § 506. Motions under § 506 must be filed and served in the manner provided for in Rule 7004 FRBP, and a certificate of service must be promptly filed. [Note: A stand−alone motion is not required if the value of a secured claim is fixed at the Meeting of Creditors at a value equal to or greater than the valuation set forth in the Plan or is negotiated by the Debtor and the affected creditor at the Section 341 Meeting of Creditors, and such valuation is made a part of the record at the confirmation hearing or by stipulation filed on the docket.]
  • Judge Warren’s Case Management Order changes Section 3.2 of the national plan as follows: “All requests to determine the value of a secured claim must be brought by stand-alone motion under 11 U.S.C. § 506. The motion must be made returnable on a date in advance of the hearing on plan confirmation (or returnable at the confirmation 2 hearing if permitted by the Court on request). Motions under § 506 must be filed and served in the manner provided for in Rule 7004 FRBP. A certificate of service must be
    promptly filed.”

If a bankruptcy is filed by a borrower after a breach letter was already sent by the lender, it may be necessary to “re-breach” after bankruptcy. This would depend on whether the Debtor cured the entire default in the bankruptcy. In most cases, if the loan remains in default, a re-breach is not necessary but, in some cases, it may be necessary (ex. if the due date has advanced or if the original default was cured and a new default now exists coming out of a Chapter 13).