Kenneth Elbert Bowman

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
KENNETH ELBERT BOWMAN, JR., 	CASE NUMBER: 10-01745-8-JRL
CHAPTER 13
DEBTOR.
______________________________________________________________________________
ORDER ALLOWING MORTGAGE PAYMENTS OUTSIDE OF CHAPTER 13 PLAN
This matter came before the court on the debtor’s motion to pay mortgage payments
outside plan. A hearing was held in Raleigh, North Carolina on July 22, 2010.
On November 5, 2009, this court entered an Administrative Order Establishing
Procedures Governing Post-Petition Conduit Mortgage Payments (“Administrative Order”)
which became effective on January 1, 2010. The Administrative Order was carefully crafted
with the intent of benefitting parties in interest through assuring accurate recorded keeping.
Pursuant to the Administrative Order, all mortgage payments owed by the debtor to a real
property creditor must be made through the debtor’s chapter 13 plan. Furthermore, the trustee is
directed to include within the plan an allowed administrative arrearage claim. An administrative
arrearage is defined as the “total amount of two full post-petition mortgage payments and shall
SO ORDERED.
SIGNED this 29 day of July, 2010.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
Case 10-01745-8-SWH Doc 39 Filed 07/29/10 Entered 07/29/10 12:03:02 Page 1 of 2

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be added to the Pre-Petition Arrearage claim.”
On March 4, 2010, the debtor filed as an individual under chapter 13 of the Code. The
debtor’s spouse is not a party to the bankruptcy. The debtor owns his personal residence with
the non-filing spouse through tenancy by the entirety. Bank of America is a secured creditor
holding first and second deeds of trust on the debtor’s primary residence. At the time of filing
and continuing post-petition the debtor has remained current on both mortgages. Mortgage
payments are made by the non-filing spouse with her personal earnings. The debtor contends
that requiring mortgage payments through his chapter 13 plan will adversely affect the credit
rating of the non-filing spouse.
In the instant case, cause exists for mortgage payments to be made directly to the
secured creditor. The debtor and non-filing spouse are co-obligors on the mortgages owing to
Bank of America. As the debtor aptly points out, because the mortgage is current, the delay of
disbursement associated with the administrative arrearage creates an unavoidable default. This
is an inequitable outcome with respect to the non-filing spouse. This finding is consistent with
In re Watts, Case No. 10-01508-8-RDD, as an exception to the Administrative Order.
Based on the foregoing, the debtor’s motion is GRANTED.
END OF DOCUMENT
Case 10-01745-8-SWH Doc 39 Filed 07/29/10 Entered 07/29/10 12:03:02 Page 2 of 2