Debtor's counsel often do not have much experience in dealing with reverse mortgages in bankruptcy.  A recent case raised a couple of issues on these, when the reverse mortgage was initially in the debtor's mother's name, and transferred to him shortly before her death.  The debtor then filed a chapter 13 plan to reduce the debt to the value of the property, and pay this value through the plan.  The court denied the request to lift stay by the mortgage in In re Winstead, 2019 Bankr. LEXIS 2408, Case #19-50307-KMS (Bankr. S.D. Miss. 31 July 2019).    Winstead's mother executed the note and deed of trust for the mortgage in December 2008.  In June 2018 she quitclaimed the property to Winstead, and died a few weeks later.  Winstead filed for relief under chapter 13 in February 2019 at which time he was residing in the property, but was not on the note.  The chapter 13 plan proposed to refinance the property sometime during the 60 month plan, and then pay the tax appraisal of $76,040 to the mortgage holder, and make Till  interest only adequate protection payments in the meantime at $428/month.  The plan also provided for a 100% dividend to unsecured claims.  The mortgage holder asserted a fully secured claim for $100,793.32.  Two issues were raised by the motion for relief from stay.  Whether the mortgage can be included in the plan despite a lack of privity; and whether the claim must be paid in full through the plan.  As to the privity issue, the Supreme Court has held that "a creditor who ... has a claim enforceable only against the debtor's property nonetheless has a 'claim against the debtor' for purposes of the [Bankruptcy] Code."1  As to payment in full, the mortgage company cited 11 U.S.C. 1322(b)(2), which prohibits modification of  'a claim secured only by a security interest in real property that is the debtor's principal residence.'  However, §1322(c)(2) sets out an exception to this rule 'when  the last payment on the original payment schedule is due before the date on which the final payment under the plan is due.'  As reverse mortgages come due upon the death of the borrower, this exception applies to exclude the debt from the limitation of §1322(b)(2).  Thus, the debtor may provide for a modification and bifurcation of the claim into secured and unsecured components crammed down pursuant to §1325(a)(5).    The court did not address satisfaction of §§1322(c)(2) and 1325(a)(5), leaving those issues for confirmation.  It would be interesting to see whether the plan will be confirmed, and proof as to feasibility, as well as value would likely be required.1 Johnson v. Home state Bank, 501 U.S. 78, 85, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991) (quoting 11 U.S.C. § 102(2))↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100mbarnett@tampabankruptcy.comwww.hillsboroughbankruptcy.com

If your home is facing a foreclosure, filing for emergency bankruptcy could be your only option. Emergency bankruptcies must be handled with caution because of the potential for providing the court and creditors incorrect information. However, if you do not have much time to save your home from foreclosure, an emergency bankruptcy could be worth […] The post Can an Emergency Bankruptcy Filing Stop Home Mortgage Foreclosures in Pennsylvania? appeared first on .

  When a chapter 13 bankruptcy is filed when a debtor is behind on the mortgage payments, generally there are two plan options to keep the house.  The cheapest monthly payment is usually allowed by seeking mortgage modification mediation through the bankruptcy.  Many bankruptcy courts, including that in the Southern District of Florida, provide mortgage modification programs.  However, a successful modification mediation requires that the parties reach an agreed modification.  If not, then the debtor must revert to the 2nd option, a cure an reinstate plan.  Under this option, the debtor continues to pay the ongoing mortgage payment, and catch up the missed payments over time.  The problem arises when the debtor had made a number of payments at a lower monthly rate, then switches midstream to a cure and reinstate plan, as the debtor is already behind on the on-going post-petition mortgage payments.  This was the situation facing the debtor in In re Edwards, 2019 Bankr. LEXIS 2395, Case #13-25698-EPK (Bankr. S.D. Fla. 1 August 2019).   The initial plans provided for an ongoing payment on the Wells Fargo mortgage of $500/month.  This payment continued for 12 months during the mediation process.  When the mortgage mediation was unsuccessful, the debtor amended the plan to provide for a cure and reinstate option, with on-going mortgage payments for months 13-60 of $1,181.29; which was $136.26 higher than the contractual mortgage payment as reflected in Wells Fargo's claim, in order to cure the deficiency in the first 12 postpetition mortgage payments.  This plan was confirmed by the court without objection.  A couple of modifications to the confirmed plan affecting Wells Fargo were filed, both appearing to represent unintended typographical errors by counsel for debtor.  The second of these modifications resulted in payment to Wells Fargo that was insufficient to cure the delinquency in the first 12 months of payments.  The motion did not note the change in the treatment of Wells Fargo mortgage, and neither the court or the trustee recognized the modification to Wells Fargo's treatment.  The modification, and order approving such modification were both served on Wells Fargo, who did not object or seek reconsideration.  Wells Fargo also filed 4 notices of change of mortgage payments, all of which were lower than the payment due as of filing, and none of which reflected the shortfall from the initial 12 monthly payments.  On 5 July 2018 the trustee filed the notice of plan completion of notice of final cure payment.  Wells Fargo objected noting that the debtor was not current on post-petition payments, instead asserting a $4,810.37 delinquency.   The computation was not disputed by debtor, but asserted that as all payments under the confirmed plan as modified were made, believed she should not be required to pay the shortfall.  Debtor filed a motion to requesting the court to deem the mortgage current as of the final payment by the trustee on the mortgage, July 2018.  In May 2019 the court had granted the debtor's request to deem the mortgage current based on United Student Aid Funds, Inc. v. Espinoza, 559 U.S. 260 (2010) holding that a confirmed chapter 13 plan is binding on all parties in interest with adequate notice.  Wells Fargo then filed a motion for reconsideration, but did not cite any rule or legal standard in support of the request. Wells Fargo raised new arguments in the request for reconsideration.  The possible applicable rules, Fed. R. Civ. P. 59(e) and 60(b), made applicable in bankruptcy by bankruptcy rules 9023 and 9024 respectively, do not permit a party to raise arguments that could have been raised prior to the initial decision, but were not.1  Wells Fargo argues that the 11th Circuit's prior panel precedent rule applies to require the bankruptcy court to apply the standard from Universal Am. Mortg. Co. v Batement (In re Bateman), 331 F.3d 821 (11th Cir. 2003) which had held that the anti-modification language of §1322(b)(2) prevails over the binding effect of a plan under §1327(a).  This rule of the 11th Circuit was designed to minimize the risk that two or more panels of the court could issue decisions directly at odds with each other.  If a panel has previously ruled on an issue, the later panel is bound to follow it; subject to en banc review.  Further, Wells Fargo argues that Espinoza does not apply because it did not receive adequate notice of the modification reducing the payment on its claim.  The court rejected this argument, finding that while the text of the motion did not set forth the changes to Wells Fargo's claim, the plan itself and the order confirming such modification clearly noted the changed treatment.  Wells Fargo's failure to review these documents does not allow a later collateral attack on the modification.  Wells Fargo and the court next turned to Bankruptcy Rule 3002.1, which avoids the need to modify a confirmed plan every time a mortgage payment changes due to escrow or interest changes.  This section applies to claims secured solely by a debtor's principal residence, whether payments are made through the chapter 13 trustee or directly by the debtor.  It requires a holder of such claim to file and service a notice of any payment change at least 21 days before the change is to take effect.  Within 30 days after completion of plan payments by the debtor, the trustee is is required to file a notice that the debtor has paid in full the amount required to cure any default on the mortgage claim.  Within 21 days after service of that notice, the holder of the secured claim may file an objection, either as to the cure of the prepetition arrearage, or as to whether the debtor is otherwise current on all payments due on the claim.  Wells Fargo asserts that this provision allows it to complain that all post-petition payments were not paid.  The court disagreed, finding that rather than requiring the court to re-analyse what the amount of payments due were, the section only provides a mechanism to resolve disputes as to the accounting.  Rather, §1329 provides the exclusive method for modification of a plan after confirmation.  Finally, nothing in the Bankruptcy Code suggest that a creditor may collaterally attack a confirmation order, otherwise final and no longer subject to appeal, by a procedure provided in Rule 3002.1.    There are at least two morals to the story.  It appears the procedure to provide for increased on-going mortgage payments post-confirmation to cure a post-petition pre-confirmation delinquency due to reduced mortgage mediation adequate protection payments may be a good way for debtors to retain their homes after a failed mortgage mediation.  Second, it is incumbent on secured creditors to review any proposed modifications to confirmed plans to see if the documents reflect changes not apparent from the title or initial paragraphs of such motions.  Note, in our local jurisdiction (Middle District of Florida, Tampa Division) normally an amended plan would not be attached to a motion to modify.  This case reflects the advantage of having only one document to review rather than a multi-page plan to seek out any changes.1 Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 957 (11th Cir. 2009).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100mbarnett@tampabankruptcy.comwww.hillsboroughbankruptcy.com

Bankruptcy Alternative: Just Don’t Pay Some people want or need an alternative to Chapter 7 bankruptcy.  Meet Henry Hudson and his wife Beth. They came to see me several years ago. Their alternative to bankruptcy was a two part plan: just don’t pay, and “call my lawyer.” Here’s why. Henry and Beth were elderly, he […] The post “Just Don’t Pay” as an Alternative to Bankruptcy by Robert Weed appeared first on Robert Weed - AE.

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5 Unavoidable Causes of Bankruptcy Many people think that they would never be in a position to need to file for bankruptcy. But the reality is that anyone can find themselves in dire financial circumstances and in desperate need of debt relief. Unexpected things can happen, and we can find ourselves caught up in a spiral that we can’t seem to stop. Sometimes, filing for bankruptcy near Phoenix can be the inevitable outcome of certain circumstances. Here are just five things that can make bankruptcy seem unavoidable: Job Loss We all know that we should have an emergency fund that would cover six months of living expenses, but few of us actually have such a fund. In fact, few of us have any savings at all. Many of us live from paycheck to paycheck, even if we make a good income. The more most people make, the more they spend by increasing their quality of life, such as getting a bigger house or buying a more expensive car. So, what happens if you lose your job? You may not think that it can happen, but it can. Even people with plenty of experience and seniority can be laid off without notice. If that were to happen to you, you might have to live on credit cards or take out loans to cover your living expenses. Those debts may become uncontrollable before you can get another job, and you may need to file for a Phoenix bankruptcy. Divorce Going from two incomes to one can put a huge strain on your finances. In fact, you may not be able to cover all your expenses on your salary alone. Add to that the other expenses divorce brings – such as getting a new home, buying new furniture, and exorbitant legal fees – and you may soon find your finances situation reaching a desperate level. Filing for bankruptcy may be the only way to save some of your assets after a divorce. You could have credit card debt wiped away, freeing up money to pay other expenses. Or you could get on a repayment plan that would help you better manage your finances. Death Obviously, your own death would wipe away any financial troubles you experience forever. But the death of your spouse could bring on unexpected financial pressures that you can’t overcome. Your spouse could die suddenly in an accident or even of an underlying condition that neither of you knew existed. Even if your spouse has life insurance, it may not be enough to cover all the debts in your spouse’s name or to cover all your living expenses. You may find yourself in over your head and needing the debt relief that bankruptcy offers. Illness A long illness can pose a number of financial problems. It could mean that you or your spouse are out of work for a long time, without any pay. It could also mean huge medical bills, even numbering into the tens of thousands. Hospitals may give you a payment plan, but that doesn’t mean you can afford to keep up with it. Filing for bankruptcy can clear out medical debt completely if you qualify. Bad Financial Habits You might think that you’re good with money, but the truth is that most of us aren’t as good with money as we think. Financial problems also don’t start as obviously as they end. You can start out having problems by just being a little too liberal with the credit card. Over time, you build a habit of eating out or shopping and putting everything on your card. Those bad habits build on each other until you have a major problem and don’t know what to do about it. Bankruptcy can save you from your own bad financial habits. You’ll just need to correct them or else you’ll end up having the same problem again. Bankruptcy may not be as distant a possibility as you think. There are plenty of circumstances that can occur without warning that can leave you in dire financial straits. After situations like these, bankruptcy can almost seem inevitable. It’s important that you talk with a bankruptcy lawyer in Phoenix to explore your options and find the best choice for debt relief. My AZ Lawyers can help. Our Phoenix bankruptcy lawyers can review your financial circumstances and help you understand if bankruptcy would provide the debt relief you need. Our experienced bankruptcy attorneys can file your bankruptcy if you decide to move forward and help you resolve your financial problems quickly. Call us in Phoenix today to learn more about how bankruptcy may be able to help you. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 399-4222 The post 5 Unavoidable Causes of Bankruptcy appeared first on My AZ Lawyers.

Spending Before and After Filing Chapter 7 or Chapter 13 This article will tell you in general what you need to know about spending before and after filing a bankruptcy petition. You will also find out what the Trustee is looking for and how he or she investigates a case. If after reading this article you have questions about your unique, specific financial situation, contact our office for a free consultation with an experienced Pennsylvania bankruptcy attorney. The Bankruptcy Trustee Will Check Your Bank Account Records Why Your Attorney and the Trustee Need Your Account Statements In the course of preparing your bankruptcy petition and schedules, your attorney will ask you for several month’s worth of statements from any and all checking and savings accounts you have.  These bank statements will be used to support the income and expenses you set forth in your filing. They will also be used to prepare your list of exemptions, either state or federal according to your specific financial situation. Money in those accounts and cash on hand can be exempted from the bankruptcy estate in limited amounts which vary by state. The Look Back Period for Chapter 7 or Chapter 13 Your attorney will submit your bank statements to the Trustee prior to your 341 Meeting of Creditors. The Trustee’s job is to find money to repay your creditors if there is any. He or she needs your bank statements to see if there have been any preferential or fraudulent transfers or luxury purchases during the look back period, which is ninety days for general creditors and one year for insiders like friends and family. At the 341 meeting the Trustee will ask you whether you have made such transfers or purchases, as well as whether you used your credit cards in the months prior to filing. Credit card debt incurred “in contemplation of bankruptcy” can be deemed nondischargeable.  An example of this is when you go on a spending spree in the month before filing knowing that you are going to file Bankruptcy. “What if I recently sold or gave something away?” The look back period also applies if you sell or give away any of your assets just prior to filing.  The Trustee will ask you if you have done so, and has the power to “claw back” those assets if so. This includes transfers to your friends or relatives. Spending Money Before Filing Chapter 7 or Chapter 13 If you are considering filing a bankruptcy petition, you should avoid making luxury purchases or preferential transfers prior to filing. This means avoiding big purchases such as a second car or a house or an expensive vacation. This also means not repaying a loan to a friend or to family just before filing. If you think you may have already done any of this, you should consult with your attorney about the timing of your filing so that the spending does not appear during the look back period. Spending Money After Filing Chapter 7 or Chapter 13 Spending While in Chapter 13 If you file a Chapter 13 bankruptcy petition and your case is confirmed, you have shown the court and the Trustee that you have sufficient income to pay your ongoing expenses and also repay your creditors in part.  The money you make after the filing date should first be used to make your monthly plan payment to the Trustee. After that, your money is yours to do with as you please, up to a point:  if you need to make a large purchase such as a car or a house, you might need the court’s permission. Consult with your attorney. Spending While in Chapter 7 If you file a Chapter 7 bankruptcy petition and it is a “no asset” case, your spending after filing should reflect what you stated on your schedules.  If either your income or your expenses change considerably while still in Chapter 7, again, you should consult with your attorney. Can I Take a Vacation While in Chapter 7? If you want to take a vacation while in Chapter 7, this is permissible as long as it is in your budget. Keep in mind however there is always the chance the Trustee and/or your attorney will request additional information or documentation while you are away.  Since Chapter 7 is over in four- to six-months, it might be better to wait until you receive your discharge before travelling for an extended period of time.. What Not to do Before Filing Bankruptcy Because the Trustee will investigate all of your financial activity in the months just prior to the date of filing, you must avoid the following during the look back period: making large purchases repaying debts to friends or family giving away or selling any of your property using your credit cards The bottom line: your filing should accurately disclose your expenses, income, assets, and debts in the months leading up to filing as well as on the day of filing.  For even more about what to know before filing bankruptcy, see this article. “Do I need a bankruptcy attorney?” This article is not meant as legal advice. Instead, it is meant to let you know that the way you use cash or credit before and after filing can impact your case. It may even result in certain debts being deemed nondischargeable, or in your discharge being denied altogether. Also, keep in mind that the trustee can seize any cash you have in excess of what is exempted and can also “claw back” any property you’ve sold or given away just prior to filing. If you think any of this might apply to you, call or email us so that we can help you time your filing to give you the best chance of receiving a discharge and getting a fresh start. Asking questions now and getting the right answers can help you avoid problems later on. The post Spending Before and After Filing Chapter 7 or Chapter 13 appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

from City Bloghttps://www.gothamgazette.com/city/8695-city-officials-debate-what-to-do-about-taxi-medallion-debt-crisis

Filing for bankruptcy is a thought that could easily cause severe stress for a person. This is especially true if the individual that is drowning in debt is married and is worried about how a bankruptcy filing could affect their spouse. If you need legal assistance to determine your best options for filing bankruptcy while […] The post Can You File Bankruptcy by Yourself in New Jersey if You Are Married? appeared first on .

    Generally balloon payments are frowned upon in chapter 13 cases, generally raising feasibility objections.  Unusual facts lead to an exception to this rule in In re Olsen, 2019 Bankr. LEXIS 2250, Case #18-14255-13 (Bankr. W.D. Wis. 22 July 2019).  Here the debtor provided for monthly payments of $1,785 with a lump sum from refinancing to pay a matured $215,613.51 claim at 4.88% secured by real estate including both debtor's home and business.   Two major factors appeared to influence the court's decision.  First, there were no unsecured creditors in the case.  Second. the court found that the bank holding the mortgage engaged in unfair, deceptive conduct against the debtor resulting in the bankruptcy filing.  Mr. Olsen, the Debtor, had owned a restoration company which had a loan since August 2014 with State Bank guaranteed by Mr. Olsen personally and secured by real and personal property including Mr. Olden's home.  Mr. Olsen had remained current on the debt.  The note matured on February 3, 2018; but while the renewal had the same payment as the original loan, instead of renewing for a similar term it included a $204,000 balloon payment in only 3 months.  The court appeared convinced Mr. Olsen was not aware of the balloon, believing it had the same terms as the original note.  When Mr. Olsen defaulted on the balloon payment, State bank obtained a judgment in foreclosure in November 2018 of $214,267 and set a foreclosure sale the next month.  Mr. Olsen filed for relief under chapter 13 prior to such sale.  As noted above, Olsen filed a plan providing for monthly payments toward the secured claim, plus a balloon for the balance through a refinancing of his property.  State bank objected both under §1322(b)(2) (modifying a mortgage secured solely by homestead) and §1325(a)(5) (extending payments beyond 60 months), as well as to feasibility.  To avoid a balloon debtor would be required to make equal payments of $3,593.56, which is not possible given Mr. Olsen's income.  The court first discussed feasibility.  §1325(a)(6) requires that the debtor 'will be able to make all payments under the plan and to comply with the plan.'  This requires that the plan have a reasonable likelihood of success given the particular circumstances of the case.  The debtor's income should exceed expenses by an amount sufficient to make the proposed plan payments.  The future income projections supporting such plan must not be speculative, conjectural or unrealistic.   The court noted that the proposed plan payments were the same amounts as were paid under the note prior to the balloon.  There is no per-se bar on a provision to fund certain plan payments through a refinancing.1   However most courts find that where consummation of a plan hinges entirely on an event scheduled three to five years from confirmation, it fails the feasibility requirement.  Other courts allow such balloon payment plans if the debtors show by definite and credible evidence that they will have the financial ability to make the balloon payment.  Factors considered by the courts in this determination include 1) equity in the property at the time of filing; 2) debtor's future earnings capacity; 3) debtor's future disposable income; 4) whether the plan provides for the payment of interest to the secured creditor over the life of the plan; 5) whether the plan provides for the payment of recurring charges against the property, including insurance and taxes; and 6) whether the plan provides for substantial payments to the secured creditor and will significantly reduce the debt and enhance the prospects for refinancing at the end of the plan.2  The court found the evidence supported feasibility.  The budget showed he could afford the monthly payments, which were in the amount made by him without default to State Bank since 2004.  State Bank noted that the budget shows January through March as being slower, with less income, thereby negating feasibility.  The court rejected this argument, finding it looked at too microscopic a view of the budget, when the good months more than compensate for the slow season.  These figures were supported by post-petition income and expense documentation.  Mr. Olsen also testified that he has future jobs lined up totaling $65,529, reflecting significant demand for his services.   Olsen has 15 years experience in the restoration business and a positive reputation in the community.  The court also found the lack of unsecured debt and the only defaulted secured debt to be State Bank indicia supporting approval of the plan.  Finally, the court determined that there was $100,000 equity in the real property, and is building additional equity through the plan repayment both through payment to State bank and through continuing payments on the 1st mortgage on the same property.    The court also rejected State Bank's argument that the failure to refinance the loan prior to filing or during the case.  The court found Owen was lulled or misled by the bank into a false sense of security when renewing the note, and by the time he realized the true situation he was in default.   The court noted the difficulty faced in trying to refinance a loan that is already in default under great time pressure.  Next the court examined the plan's compliance with §1322(b)(2).  This provides that a plan may "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence . . . ."  11 U.S.C. 1322(b)(2).  The section does not apply when the real estate includes a use in addition to the principal residence.3   At the time Owen and State Bank initially entered the loan agreement, they intended to enter into a commercial rather than a residential transaction. Since Owen's property includes both his home and his business, and the business facilities are not merely incidental to the residence, §1322(b)(2) does not apply. The court went on to find that the plan's treatment of the secured claim was permissible under §1325(a)(5)(B)(iii)(I).  This requires that if property to be distributed pursuant to this subsection is in the form of periodic payments, such payments shall be in equal monthly amounts.  11 U.S.C. 1325(a)(5)(B)(iii)(I).  While the majority of courts find that this provision prohibits balloon payments, a growing minority interprets the 'periodic payments' language as limited to the the regularly reoccurring payments; and thereby excludes the one-time balloon payment.4  This is in accordance with the common and technical understanding of these terms.   A one time payment cannot be reoccurring.  Per Blacks Law Dictionary a balloon payment is a final loan payment that is usually much larger than the preceding regular payments.  It also references its definition of a balloon note as one requiring small periodic payments but a very large final payment.  Other recent authorities agree with the minority interpretation.5   The court also noted that while there is little legislative history to this particular provision, the majority view is contrary to the legislative purpose of chapter 13 generally, to provide a flexible means for the debtor to protect his assets, most importantly those assets necessary to pay his creditors by completing his plan, such as a house to live in or car to drive to work.  The provision is intended to prevent innocent creditors from being taken advantage of.   The court found State Bank came in with unclean hands given the circumstances of the renewal of the loan.  The bank faces minimal risk given the equity in the property and the building of additional equity during the life of the plan.   Finally, the court found that State Bank was equitably estopped from objecting to the plan.  Wisconsin sets forth three requirements for a defense of equitable estoppel.  1) action or non-action; 2) by the party against whom equitable estoppel is asserted; 3) which induces reasonable reliance by the other party; and 4) which is to the relying party's detriment.  Even under the majority view, State Bank would be estopped from objecting if the plan term was no longer than the original term of the note.  The bank prepared the renewal note and had the debtor sign it as a renewal, without advising him of the 3 month balloon.  The bank's action or inaction was in failing to advise the debtor that they would not renew the note under the original term or advising him of the 3 month balloon. Olsen relied on the bank's representations, believing he was renewing the note on the original terms.  Such reliance harmed the debtor in resulting in a foreclosure on his property and the bankruptcy filing.  Such reliance, even in the absence of reading the renewal note, was reasonable given the long relationship between Olsen and the bank, and the diligence of Olsen in contacting the bank before the prior note came due to get a renewal.  The court also discussed a possible alternative remedy of reforming the renewal note to match the terms of the original note.  This remedy is available when the written instrument fails to express the intent of the parties, due to a mistake by one party combined with the fraud or inequitable conduct of the other.   This is satisfied when one party is mistaken as to a material term of the instrument and the other party is aware of the mistake and fails to point it out.  Such an reformation in this case would result in a new note of not less than 42 months from the commencement of the plan followed by a balloon payment.  The court concluded by approving the plan proposed including the balloon payment.1 In re Primes, 518 B.R. 466, 481 (Bankr. N.D. Ill. 2014) (citing Branigan v. Bateman (In re Bateman), 515 F.3d 272, 279 (4th Cir. 2008)).↩2 First Nat'l Bank v. Fantasia (In re Fantasia), 211 B.R. 420, 423 (B.A.P. 1st Cir. 1997);  Chelsea State Bank v. Wagner (In re Wagner), 259 B.R. 694 (B.A.P. 8th Cir. 2001).↩3 In re Snowden, 546 B.R. 39, 43 (Bankr. E.D. Ky. 2016) (quoting Keith M. Lundin & William H. Brown, Chapter 13 Bankruptcy § 119.1 at ¶ 1 (4th ed.).↩4 In re Cochran, 555 B.R. 892, 897-98 (Bankr. M.D. Ga. 2016).↩5 A regular installment payment or payment of interest on the debt is a 'periodic' one, whereas a lump sum payment is not . . . . [T]his interpretation of 'periodic payments' accomplishes the primary objective of the new provisions of Code § 1325(a)(5)(B)(iii) . . . ." Hon. W. Homer Drake, Jr., Hon. Paul W. Bonapfel, & Adam M. Goodman, Chapter 13 Practice & Procedure § 5:18 (2016). See also Lynn M. LoPucki, House Swaps: A Strategic Bankruptcy Solution to the Foreclosure Crisis, 112 MICH. L. REV. 689, 729-33 (2014) ("Had the drafters . . . intended [section 1325(a)(5)(B)(iii)(I)] to prohibit balloon payments and periodic payments, the drafters would have said 'all plan payments' instead of 'such payments.'").↩ Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com