If a person or couple is in chapter 13 and struggling to keep their home, every little bit helps. One of our five Houston bankruptcy judges, U.S. Bankruptcy Judge David R. Jones, just ruled that if a mortgage creditor's claim is "undersecured," i.e. there is no equity in the house, then they cannot claim post-petition and pre-confirmation attorney fees and costs from a chapter 13 debtor. In re Fuentes, Case No. 13-33464, in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

In this particular case it didn't save the debtor a ton of money, $475 for preparing the Proof of Claim, but it helps keep the plan affordable for the debtor.

These fees are typically paid out of the chapter 13 plan, from the money deposited with the chapter 13 trustee by the debtor. In this case, the court ruled that the mortgage company was not entitled to them.

As the judge pointed out in his opinion, there is a split of opinion now in the U.S. Bankruptcy Court for the Southern District of Texas, as Chief U.S. Bankruptcy Judge Jeff Bohm has an opinion that holds to the contrary.


J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization