JP Morgan Chase to Pay $50 Million for Breaking Bankruptcy Law

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According to the Consumer Bankruptcy News, the United States Trustee Program, which is affiliated with the U.S. Department of Justice, has entered into a national settlement agreement with JP Morgan Chase Bank N.A., requiring Chase to pay more than $50 million, including cash payments, mortgage loan credits, and loan forgiveness, to more than 25,000 homeowners who are or were filing bankruptcy. Chase will also reportedly change internal operations and submit to oversight by an independent compliance reviewer because of their breach of bankruptcy law. The proposed settlement has been filed in the U.S. Bankruptcy Court for the Eastern District of Michigan, where the settlement is subject to court approval.

Chase Broke Bankruptcy Law

The U.S. Trustee Program office explained in a statement that Chase had acknowledged that it filed in bankruptcy courts around the country more than 50,000 payment charge notices in ways that were against bankruptcy law. These payment charges were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices. More than 25,000 notices were signed in the names of former employees of the bank who had nothing to do with the accuracy of the filings. Bankruptcy laws protect debtors from such practices, and the United States Trustee Program is holding them accountable.
For more information, see the full article in the March 23, 2015, issue of Consumer Bankruptcy News (see Volume 25, Issue 10).