In the case where the vehicles are being paid through the trustee, interest rate, even for 910 claims, may be changed. So, if the debtors have a 19% interest rate on a vehicle, it can be reduced to the Till rate, which is 1-3% above the prime rate at the time of filing. If the car payment is added after confirmation, the car creditor can insist on the debtors paying contract rate of interest.
At the end of the case in which the trustee is paying the mortgage claim, the trustee files a Notice of Final Cure. Creditors are given 21 days in which to file a response. If there is a response that states additional funds are needed to bring the claim current, a hearing will be set. If no response is filed or if the creditor files a response that it agrees with the trustee’s report, an ORDER is entered designating the claim as current and sets a resumption date for direct payments by the debtors. EVEN IF THERE IS NO PRE-PETITION ARREARAGE, the trustee will file the Notice of Final Cure to obtain the order determining that the debtor is current on the mortgage.
The trustee believes that this is an important component to the debtors’ fresh start. The order provides that the debtor is current as of the discharge, so if the mortgage creditor attempts to come back against the debtor for additional charges, missed payments (during the pendency of the plan), etc., the debtors have an order that allows them to push back against that type of creditor over-reaching.
And paying all secured claims through the trustee will eventually lower the actual trustee fee which will inure to the benefit of the unsecured creditors.