Bankruptcy Indiana

There's talk (and I'm glad of it) of revisiting the proposal to allow bankruptcy judges to 'cram down" or modify mortgages.  In the meanwhile, the law requires that, in all owner-occupied residential mortgage foreclosure cases, a settlement conference be held with the homeowner and the lender. The Chief Justice has urged all civil trial court judges to "become familiar with mortgage foreclosure procedures."

I'm hoping this is a step in the right direction.  Now that civil trial judges are being asked to become involved in the mortgage procedure, it makes sense to allow bankruptcy judges, who are so much more familiar with dealing with lenders and debtors, to take over the mortgage modification process.

I'm going to use this post of my Indiana bankruptcy blog to explain in simple terms how the mandatory mortgage conferences actually work:

When:
At least one conference must be held within the 90 days following the foreclosure notice being served to the homeowner.

Where:
The conference might be conducted in the county courthouse, but could be in any location both parties agree on, and could even be done by telephone.

Who:
The lender must be represented by an attorney and by someone from the company with authority to finalize terms with the borrower.  The borrower doesn't have to have an attorney, but it is strongly advised. 

What?
The borrower has to complete a Borrower Financial Form provided by the court.  The lender is not required to provide any information in advance.

Why?
The settlement conference is an "informal" discussion between the principal lender and the primary borrower, to investigate whether a plan can be worked out to help keep the homeowner in the residence.

Very importantly, during the 90-day settlement period, there is a "stay", meaning no collection efforts may be made by mail, email, phone, or in person. The stay is "designed to give the parties a reasonable opportunity to work things out."

The Chief Justice is urging civil trial judges to "become creative in the Court's response to the current foreclosure crisis in Indiana".  I'm not a civil trial court judge, but as a bankruptcy attorney in Indiana, I'm trying very hard to "become creative" about foreclosure prevention.  I and the professionals in my four bankruptcy law offices are helping homeowners negotiate mortgage modification concessions from their lenders so that they will be able to remain in their homes.