Arkansas Court Rules In Favor Of Bankruptcy Filers

: Chris Lee Law Firm

  Filed under: Foreclosures

bankruptcy courtEach state has varying laws on how it handles foreclosures. These law variations can significantly affect how a homeowner’s foreclosure process is managed. Arkansas is a non-judicial state, in which foreclosures are handled outside of the court system. However, a recent dispute with mortgage lender J.P. Morgan Chase lead to a court ruling that could change the way foreclosures are managed in the future.

 

 

Chapter 13 Foreclosure Protection

Recently, a homeowner was seeking Chapter 13 protection against foreclosure, which lead to a dispute between the bankruptcy court and the mortgage lender. The original Chapter 13 repayment plan failed to include the fees associated with the initial foreclosure filing of the home. As one of the bigger creditors involved in the case, J.P. Morgan Chase felt it was owed these administrative fees as part of the bankruptcy plan. However, an Arkansas bankruptcy court judge ruled against the lender and in favor of the homeowner, stating they did not owe any additional fees for the foreclosure filing.

The judge based his decision on the current non-judicial foreclosure laws, in which lenders cannot pursue a foreclosure with the help of the court system. Confusion regarding whether or not J.P. Morgan violated the current foreclosure laws contributed to the judge’s decision to uphold the actions of the bankruptcy filer. Further, the court ruled that Morgan was to be held responsible for the legal and court fees associated with handling the case in court. Arkansas residents may benefit from this ruling in the future, which may help clarify how foreclosures are to be conducted throughout the state.

 


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