Gerner & Kearns Co., L.P.A.

Northern District of Indiana Loss Mitigation Program

Effective September 1, 2011, the Northern District of Indiana implemented a loss mitigation program for all Chapter 13 cases assigned to Chief Judge Robert E. Grant. This program only applies to real property that is the debtor's principal residence. The debtor, the creditor or the Court itself can request loss mitigation at any time during the pendency of the bankruptcy case, but parties are encouraged to seek it early in the process. There need not be a pending contested matter (i.e. motion for relief from stay or objection to confirmation of plan) for the debtor to request loss mitigation. Once the motion for loss mitigation is filed by either the debtor or the creditor, in the absence of a pending contested matter, the non‐filing party must respond within 14 days. If there is a pending contested matter, the party filing the motion for loss mitigation must do so no later than 7 days prior to the initial hearing on the underlying matter. The contested matter may be stayed while the loss mitigation is pending. If an objection to the motion for loss mitigation is filed, the Court may hold a hearing before ruling on the motion.

When loss mitigation is ordered, within 7 days after entry, the creditor's counsel must provide debtor's counsel with a list of required information. The debtor then has 21 days to comply and provide this information. This information must be provided in a complete package at one time. Within 7 days of the information being provided by the debtor, the parties must conduct a settlement conference at their convenience. Additional telephonic conferences may be scheduled by the parties and upon agreement of the parties, these timelines may be altered. All negotiations must be done in good faith and deviation from that could result in sanctions. After the completion of each conference, one of the parties must file a report with the Court outlining what discussions were.

Any party may request a mediator be appointed after the initial conference if they believe that any other party is not operating in good faith. The Court may or may not hold a hearing on the matter and should a mediator be appointed, costs will be shared equally between the debtor and the creditor.

At the conclusion of loss mitigation efforts - whether that is after the initial telephonic settlement conference or at a subsequent conference - any party to the effort may file a motion to terminate the process. Any party may file an objection to the motion to terminate within 7 days and the Court may hold a hearing on the motion. If all parties agree to terminate, then an agreed stipulation may be filed. After the conclusion of loss mitigation, any pending, underlying motions may be resumed.

Should loss mitigation result in an agreement, the debtor's attorney, creditor's attorney and the Chapter 13 trustee must file with the Court a stipulation for loss litigation outlining the agreement and attaching any documents which effectuate that agreement. The Court may grant this stipulation without a hearing providing there is no material change to the debtor's Chapter 13 plan. Should the agreement alter the debtor's plan, the debtor or the Chapter 13 trustee must file to amend or modify the Chapter 13 plan.

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