It’s fun to read about cases where a bankruptcy debtor successfully challenged a mortgage lender’s attorney fee claims. In this Chapter 13 case GMAC mortgage filed a secured claim including $300 legal fees for work incurred by the bank’s bankruptcy attorney to protect the bank’s secured interest and rights in the debtor’s property during the Chapter 13 bankruptcy. The debtor’s first mortgage payments were current upon filing bankruptcy and the debtor proposed to pay the mortgage outside the bankruptcy proceeding.
The court denied GMAC its attorney fees. The court pointed out that the first mortgage was on the debtor’s principal residence and its terms or amount could not be modified in the Chapter 13 plan. The court found that the bankruptcy filing may have created some extra work for the mortgage lender, but that this work was administrative in nature and not legal work requiring a licensed attorney: in other words, its extra “paper work.” The court said that referring a matter to an attorneys office does not automatically create necessary legal work.
Look at the first mortgage lenders claim in your Chapter 13 bankruptcy, and if your facts are the same as in this case, consider filing an objection to the lender’s claim which includes automatic, standard legal fees. In re Jaramillo 09-33951, Southern District Florida.
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