The “Notice of Fees” Trap: Why Your Mortgage Servicer Is Hiding Costs in Chapter 13

You are in a Chapter 13 bankruptcy. You have been making your plan payments faithfully for 5 years. You are about to receive your discharge and start fresh.

Then, your mortgage servicer hits you with a surprise bill: “$5,000 in “legal fees,” “property inspections,” and “corporate advances” from three years ago.

They claim you have to pay this immediately or face foreclosure the day after your bankruptcy ends.

This is a common trap. And under the Federal Rules of Bankruptcy Procedure, it is often illegal.

The 180-Day Rule (Rule 3002.1(c))

Bankruptcy Rule 3002.1 was created to stop this exact scenario. It requires mortgage servicers to file a "Notice of Postpetition Mortgage Fees, Expenses, and Charges"* (Official Form 410S2) within *180 days of incurring any fee.

If they charge you a $50 inspection fee on January 1st, they must file the notice with the court by roughly July 1st.

The Consequence of Hiding Fees

If the servicer fails to file this notice on time, the court can bar them from presenting the omitted information as evidence. This means they cannot collect the fee. It effectively ceases to exist.

We Audit the Servicer

When your Chapter 13 case is nearing completion, we file a Motion to Deem Mortgage Current. We force the servicer to prove they complied with Rule 3002.1. If we find hidden fees that were not properly noticed, we ask the judge to strip them from your account forever.