Creditor, a homeowners association, filed an amended relief from stay motion to pursue a postpetition delinquency stemming from the assessment of annual fees and penalties. The debtor filed an objection asserting the homeowners association was bound by the terms of the confirmed plan and the balance of the fees sought should be disallowed because the association failed to adhere to the noticing requirements of Federal Rule of Bankruptcy Procedure 3002.1(c). A creditor must have a claim secured by a security interest in the debtor’s principal residence to be bound by Rule 3002.1. In contrast, the homeowner’s association here held an unsecured claim due to its failure to perfect its claim in state court, pursuant to N.C. Gen. Stat. § 47F-3-116(a). Consequently, the homeowners association’s fees, which the Court did not find to be improper or unreasonable, were not subject to the noticing requirements of Rule 3002.1(c) and, given the procedural posture of the case, warranted relief from stay. 

The chapter 7 trustee objected to the proof of claim of the Creditor which was received and file-stamped by the clerk of court one day after the noticed deadline for filing proofs of claim. The Creditor filed a response to the objection as well as a motion requesting that its claim be treated as timely filed based on the common law mailbox presumption. In support of its motion, the Creditor submitted the affidavit of an employee attesting that she mailed the claim one week prior to its file-stamped date. The Court found that the mailbox presumption does not apply to the mailing of a proof of claim and would lead to complications, uncertainty, and delay in the bankruptcy claims process. While the Court acknowledged the application by some courts of the mailbox presumption to the claims process, the Court noted that in each of those cases the clerk of court never received or filed the proof of claim in question. Even if the Court were to find the mailbox presumption applicable, the Creditor would not have overcome the presumption because the record was devoid of any corroborating evidence to support the Creditor’s affidavit that it timely and accurately mailed the claim. The Court therefore sustained the trustee’s objection, denied the Creditor’s motion, and disallowed the Creditor’s claim as untimely.

          The Defendant mortgage creditor moved to dismiss the Plaintiff-Debtor’s complaint for violations of the discharge injunction and automatic stay. The Defendant’s secured mortgage claim was treated as a short-term secured debt in the Plaintiff’s confirmed chapter 13 plan. The Plaintiff made all payments required under her plan and received a discharge on June 18, 2019. The chapter 13 trustee's final report stated the Defendant's $34,158 secured claim was paid in full with interest.  Following discharge, the Defendant sent a series of informational statements to the Plaintiff claiming it had not received all mortgage payments since the bankruptcy filing and asserting the Plaintiff owed thousands of dollars in principal balance on the mortgage. The Plaintiff moved to reopen her bankruptcy case and then filed a complaint against the Defendant alleging that its actions violated the automatic stay and the discharge injunction under 11 U.S.C. § 524(i) by willfully failing to credit payments it received in accordance with the confirmed plan.

          The Court granted the Defendant’s motion to dismiss the Plaintiff’s claim that it violated the automatic stay because the complaint did not assert the Defendant took any action to collect the claim during the case. The only alleged attempts to collect the claim occurred post-petition and after the termination of the automatic stay.

          The Court also found that the Defendant’s actions could not violate Section 524(i) due to the nature of the Defendant’s claim and its treatment under the confirmed plan. The Court found that a reading of § 524(i) that is limited in application to long-term debts that are not discharged at the successful conclusion of a confirmed plan clearly aligns with the plain text of the provision, is contextually consistent with the surrounding paragraphs of § 524, including those contemporaneously added through BAPCPA, and most accords with Congressional purpose behind enacting § 524(i). Because the Defendant’s short-term, partially secured debt was not encompassed by § 524(i), the Court found the Plaintiff failed to plausibly plead a claim for relief under subparagraph (i).

          While the alleged notices sent by the Defendant could not violate Section 524(i), the Court nevertheless found that the Plaintiff could pursue the traditional remedy for a violation of the discharge injunction, which lies in a contempt proceeding for a creditor's breach of one of the protective provisions described in Section 524(a). The Court found the Plaintiff met the plausibility standard in pleading, under the standard established by the Supreme Court in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), that there is no fair ground of doubt that the Defendant understood the effect of the discharge order and continued to attempt collection on its discharge debt. Therefore, the Court denied the Defendant’s motion to dismiss as to the Plaintiff’s claim for violation of the discharge injunction.

The Debtor moved to modify his confirmed plan and extend the plan length from sixty to eighty-four months, pursuant to the CARES Act amendment to 11 U.S.C. § 1329(d), which allows such an extension to debtors experiencing material financial hardship due, directly or indirectly, to the COVID-19 pandemic. Modification under the “material financial hardship” standard still requires sufficient notice to affected creditors of the proposed changes to the plan. While the Debtor represented that he suffered a reduction in hours and income from the pandemic, he did not provide any estimate of the modified plan payment amount, nor any estimates for the amounts by which payments to individual secured creditors would decrease. For that reason, the Court denied the Debtor’s motion without prejudice to his right to refile a similar motion that provides adequate notice to affected creditors of the proposed plan modifications.