Local Rule RULE 4001-3: Scope and Content of Account Information and Statements Secured Creditors May Provide to Debtors Postpetition. — Bankr. D. Mont.

RULE 4001-3. Scope and Content of Account Information and Statements Secured Creditors May Provide to Debtors Postpetition.

(a) Scope and Purpose. The purpose of this Local Rule is to allow the routine flow of information to continue postpetition from secured creditor to debtor concerning secured loans, in each bankruptcy case where debtor retains possession of the collateral and continues to make regular installment payments directly to secured creditor; and to direct that secured creditor provide debtor with a contact point so that debtor can obtain specific information on the status of its loan, as needed.

It is also the purpose of this Local Rule to make clear that, as long as creditor complies with this Local Rule in furnishing account information to debtor, such good faith attempts at compliance will not expose secured creditor to claims of violating the automatic stay.

This Local Rule applies in a Chapter 7, 12, and 13; applies only to consumer loan relationships; and applies as long as debtor is in bankruptcy and protected by the automatic stay. However, for cause shown and after proper notice and a hearing, the Court may direct parties to comply with this Local Rule when concerned with commercial loans or Chapter 11.

(b) Debts Secured by a Mortgage on Real Property.

(1) For this subpart, the term "Mortgage Creditor" may include any creditor with a claim secured by a mortgage on real property.

(2) Except as provided in paragraph (3) below, Mortgage Creditor may provide monthly statements to a Chapter 12 and Chapter 13 debtor who has indicated an intent to retain Mortgage Creditor's collateral in its plan, and to a Chapter 7 debtor who has indicated an intent to retain the Mortgage Creditor's collateral in its statement of intention that has been served on the Mortgage Creditor. Monthly statements shall contain at least the following information concerning postpetition mortgage payments to be made directly to the mortgagee ("outside the plan"):

(A) the date of the statement and the date the next payment is due;

(B) the amount of the current monthly payment;

(D) the postpetition amount past due, if any, and from what date;

(E) any outstanding postpetition late charges;

(F) the amount and date of receipt of all payments received since the date of the last statement;

(G) a telephone number and contact information that debtor or debtor's attorney may use to obtain reasonably prompt information regarding the loan and recent transactions; and

(H) the proper payment address.

(3) No monthly statement shall be required in a Chapter 12 or Chapter 13 where postpetition mortgage payments are to be made to trustee ("through the plan"). If Mortgage Creditor sends a monthly statement to debtor in such a case that complies with subsection (d)(2) below, Mortgage Creditor is entitled to the protections of subsection (d)(2).

(4) Mortgage Creditor shall provide any of the following information to debtor upon the reasonable written request of debtor:

(A) the principal balance of the loan;

(B) the original maturity date;

(D) the current escrow balance, if any;

(E) the interest paid year to date;

(F) the property taxes paid year to date, if any; and/or

(G) any other amounts due, including charges paid by lender for taxes, insurance, attorney's fees, other expense, the nature of the expense, and the date of the payment.

(c) Other Secured Debts. For this subpart, the term "creditor" shall include any creditor holding a claim secured by personal property and lessors for assumed leases for personal property, for which monthly statements are provided under non-bankruptcy law or practice. For all debts secured by property, other than as provided by for subpart (b)(2) above, and for assumed leases for personal property, creditor shall provide monthly statements to debtors in the following manner:

(1) If the case was filed under Chapter 12 or 13 and the secured debt is paid entirely through the plan, creditor is not obligated to directly send debtor a monthly statement. However, if creditor or lessor sends debtor a monthly statement that complies with this Local Rule, then creditor shall be entitled to the protection described in subsection (d)(2) below.

(2) If the case was filed under Chapter 7, or was filed under Chapter 12 or 13 and the secured debt is not paid entirely through the plan, and creditor sent monthly statements to debtor before the bankruptcy petition, creditor shall send monthly statements that contain the same information as, and are similar to, the monthly statements that creditor sent to debtor before the bankruptcy was filed.

(3) If the case was filed under Chapter 7, or was filed under Chapter 12 or 13 and the secured debt is not paid entirely through the plan, and creditor provided a coupon book or other similar set of invoices to debtor, creditor shall send to debtor and debtor's attorney a default letter setting forth the postpetition arrearages upon any perceived or actual default by debtor, and before taking any steps to modify the automatic stay.

(d) Forms of Communication; Issuance of Monthly Statements Do Not Violate the Automatic Stay.

(1) For this subpart, creditor shall be considered to have sent the requisite documents or monthly statements to debtor when creditor has placed the required document in any form of communication that, in the usual course, would result in debtor receiving said document to the address that debtor last provided to creditor by agreement between debtor and creditor. Said communication may be transmitted via electronic mail, facsimile, United States Postal Service, commercial communications carrier, or such other mode as is mutually acceptable to the parties.

(2) Creditor who provides account information or monthly statements under subparts (b) or (c) above shall not be found to have violated the automatic stay by doing so. Secured creditor may contact debtor about the status of insurance coverage on property that is collateral for creditor's claim, may respond to inquiries and requests or information about the account from debtor, and may send debtor statements, payment coupons, or other correspondence that creditor sends to its non-debtor customers without violating the automatic stay provided none of these communications includes an attempt to collect the debt.

(e) Motions to Compel a Creditor to Issue Monthly Statements that Comply with this Local Rule.

(1) Debtor may file a Motion to Compel Creditor to Issue Monthly Statements in Compliance with Mont. LBR 4001-3 ("Motion to Compel") if debtor can offer evidence that the information in sections (b), (c), or (d) is necessary. Before filing a Motion to Compel, debtor must make good faith attempts to contact creditor to determine whether the information is available. The motion must include a description of debtor's good faith attempts taken before filing the motion, any response from creditor, and the harm debtor has suffered, if any, as a result of creditor's failure to provide appropriate monthly statements.

(2) If creditor's regular billing system can provide a statement to debtor that substantially complies with this Local Rule but does not fully conform to all of its requirements, creditor may request that debtor accept such statements, and debtor may do so. If debtor declines to accept the non-conforming statements, creditor may file a motion, on notice to debtor and debtor's attorney, seeking a declaration by the Court that cause exists to allow such non-conforming statements to satisfy creditor's obligations under this Local Rule. For cause shown, the Court may grant a waiver for purposes of a single case or multiple cases and for either a limited or unlimited period of time. No waiver will be granted, however, unless the proffered statement substantially complies with this Local Rule and creditor has demonstrated that it would be an undue hardship for it to strictly comply with this Local Rule.

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