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In re Ritter

United States Bankruptcy Court for the Central District of California, San Fernando Valley Division

March 5, 2021, Filed

Case No.: 1:19-bk-11838-MT, CHAPTER 13

Opinion

 [*37]  MEMORANDUM OF DECISION DENYING DEBTORS' MOTION UNDER 11 U.S.C. § 1328(i) FOR AN ORDER GRANTING AN IMMEDIATE DISCHARGE OF DISCHARGEABLE DEBTS

This case tests the application of the new Chapter 13 discharge provision passed on December 27, 2020 as part of coronavirus emergency response legislation, raising the question of whether a "COVID-19 Discharge" differs substantially from the usual hardship discharge.

On July 21, 2019, James Alan Ritter and Debra Michelle Ritter (the "Debtors") filed a petition under Chapter 13. The Court takes judicial notice of the court records, pleadings, and documents filed in this case under Fed. R. Evid. 201. Debtors' Schedules I and J reflected a gross income of $138,600 and a surplus income of $535.00 on the date of the petition. ECF doc. 11.

The Order Confirming Debtors' First Amended Chapter 13 plan (the "Amended Plan") was entered on October 18, 2019. (ECF doc. 22.) In the Amended Plan, [**2]  Debtors provided for 63% to unsecured creditors through a regular step-up in payments: $856.42 for months 1 and 2; $1,080 for months 3 through 15; $1,620 for months 16 through 27; and $1,870 for months 28 through 60. There were no liquidation issues at the time of confirmation. The applicable commitment period is 60 months totaling $96,902.84 (the plan base amount), plus tax refunds. The Amended Plan also provided for the curing of defaults and maintenance of payments on residential mortgages owed to Fay Servicing, LLC and Bank of America. On October 26, 2019, a Transfer of Claim was filed showing that Bank of America transferred the claim to Specialized Loan Servicing, LLC. ECF doc. 32.

On June 22, 2020, Specialized Loan Servicing, LLC, filed a "Notice of Temporary Forbearance" stating that Debtors' loan was in forbearance status for 3 months effective April 1, 2020. The Notice of Temporary Forbearance recognized the "recent financial hardship resulting directly or indirectly from the COVID-19 pandemic," and provided "a temporary suspension of mortgage payments... consistent with the COVID-19 relief available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act." ECF [**3]  doc. 38.

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626 B.R. 35 *; 2021 Bankr. LEXIS 526 **; 2021 WL 864092

In re: James Alan Ritter, Debra Michelle Ritter, Debtor(s).

CORE TERMS

modification, forbearance, provisions, plans, statutory scheme, financial hardship, mortgage payment, circumstances, confirmation, pandemic, residential mortgage, defaults, curing, modify, notice

Bankruptcy Law, Procedural Matters, Judicial Review, Governments, Legislation, Interpretation, Local Governments, Ordinances & Regulations, Judicial Review, Bankruptcy Appeals Procedures, Bankruptcy, Discharge & Dischargeability, Individuals With Regular Income, Individuals With Regular Income, Eligibility, Credit Counseling, Civil Procedure, Judicial Officers, Judges, Discretionary Powers, Evidence, Burdens of Proof, Allocation, Real Property Law, Financing, Workouts, Plans, Plan Contents, Business & Corporate Compliance, Discharge & Dischargeability, Business & Corporate Compliance, Consideration, Enforcement of Promises, Forbearance