Maine newest Bankruptcy Judge, Michael Fagone, recently issued two decisions which provide instructions for the bankruptcy bar regarding reopening closed bankruptcy cases to add creditors and how to determine when mortgages are current at the conclusion of a chapter 13 case.
In the case of In re Timmerman, Judge Fagone held that a debtor may reopen a bankruptcy case to list an omitted creditor if the debtor can show that the omission was innocent and that it is not inequitable to grant the relief sought. The Judge provided safeguards for the previously omitted creditor in his order permitting the addition of the creditor to the case by providing the creditor with time periods to request a Rule 2004 examination, to file a dischargeability complaint, and to file a motion to vacate the discharge.
In the case of In re Thibeault, Judge Fagone held that Rule 3002.1 controls the process for determining whether a mortgage is current at the conclusion of a chapter 13 case. Judge Fagone held that Rule 3002.1 must be followed precisely when a debtor has pre-petition mortgage arrears at the start of a Chapter 13 case. He did not indicate whether the Rule applies in the circumstance where there are no pre-petition arrears when a chapter 13 case is filed. Section 1322(b)(5) of the Bankruptcy Code is the operative section of the Code on which Rule 3002.1 is based. Section 1322(b)(5) refers to situation where a debtor is attempting to "cure" defaults and maintain current mortgage payments. So, at the beginning of a Chapter 13 case, where a debtor is current with his or her mortgage payments, the process is still uncertain whether Rule 3002.1 applies. Judge Fagone left that issue for another day, in another case.