Update on Zoom 341’s; Tax Returns Not Filed; Mortgage Forbearance Agreements in Chapter 13

Zoom Meetings Update:

We’ve only done the section 341 meetings by Zoom for a week, and I am amazed at the participation rate.  We were able to hold 77% of the scheduled meetings.  That’s incredible considering that most debtors and attorneys had only 2-3 weeks’ notice that we would use Zoom.  While some of the “not held” 341’s were due to debtors’ inability to use Zoom, others were due to normal reasons – schedule conflict; lack of documents; unexplained no-show’s; etc.

Most of the April “not held” 341’s will be rescheduled for June.  Hopefully by that time debtors who could not use Zoom can go to their attorneys’ offices for the 341.

Procedure Change:  Soon my email notices to debtors’ attorneys with the Zoom meeting information will include a hyperlink to the meeting so attorneys can join a Zoom meeting with a simple click rather than entering the code numbers.  Debtors’ attorneys can forward the link to their clients if they want to.  The email will also contain the typical meeting code and password.

Those email notices will come from my office.  If you receive an email about a Zoom meeting from a source other than my office, it could be a phishing scheme or a way to install malware on your system.  Use caution.

We will continue to send paper notices containing the meeting code and password to debtors by mail.

Creditors’ attorneys, if you or your clients want to participate in a meeting, send a request for the meeting code at least one business day in advance to meetings@ch13edky.com.

Expect video 341’s to continue at least through July.

Proof That Tax Returns Have Been Filed:

When a claim filed by the IRS or Kentucky Revenue Department shows that a tax return has not been filed as required by Section 1308 of the Code, I have always asked for an affidavit from the debtor as evidence that the returns have been filed (or an amended proof of claim, which often takes longer).  Upon further review of the process, I have decided that it is sufficient if the debtor makes a declaration under penalty of perjury that s/he has filed the tax returns shown as not filed on the proof of claim.  The declaration does not need to be notarized.

Mortgage Forbearance Agreements in Chapter 13 Cases:

Creditors, if you are doing a forbearance agreement with the debtor under the CARES Act, you may file a notice of the forbearance.  I don’t think it is necessary to file a motion. I will provide more/updated information in the near future.

Debtors’ attorneys, if the agreement is a forbearance agreement and not a deferral of the mortgage payments, you might consider filing a motion to modify the plan in order to treat the payments that are the subject of the forbearance agreement as a postpetition arrearage to be cured through the plan.   In your motion, ask that the creditor file a supplemental proof of claim for the suspended mortgage payments.  Make sure you give proper notice the creditor (and use the notice address in the proof of claim).

To cure the postpetition arrearage, you might need to increase plan payments, or you might be able to add the missed mortgage payments to the end of the plan.  You might be able to extend plan payments beyond 60 months under certain specific conditions.  See my previous post on the CARES Act.

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