This Memorandum Opinion addresses the feasibility and good faith of a Chapter 13 Plan of Reorganization filed on the even of foreclosure by a homeowner. The Mortgagee bank wanted to shut down the case and the Plan. The Court said “not so fast” and prepared a carefully crafted analysis of each objection filed by the bank.
Richard Olson filed four Chapter 13 Bankruptcy Petitions and Plans in a five year period- the last one on the eve of the foreclosure of his home. Ventures Trust 2013-I-H-R (“Mortgagee”), assignee of the Debtor’s original mortgage lender Bank of America, objected to confirmation of the latest Plan on the basis that it failed to comply with the confirmation requirements in 11 USC §§1325(a)(1), (a)(3), (a)(6) and (a)(7). Specifically, the Mortgagee alleged that there were inaccuracies in the Debtor’s schedules, that the Debtor had failed to correctly value certain obligations while not disclosing others at all, that the Plan was not “feasible,” and that both the case and the Plan had been filed in “bad faith.” In response, the Debtor amended his Bankruptcy Schedules to address some of the inaccuracies.
It is worth noting that the Plan under review in this case proposed curing mortgage defaults per §1322(a)(5) and reinstating monthly mortgage payments to the Mortgagee; as well as committing all the Debtor’s disposable income for the maximum commitment period of 60 months. General Unsecured Creditors are scheduled to receive not less than 2% of the face value of their claims.
The Court entered a Memorandum Opinion on the balance of the Mortgagee’s Objection before ruling on confirmation of the Plan.