The United States Bankruptcy Court for the District of New Jersey recently adopted a new General Order favorable to secured lenders. Effective January 3, 2005, secured creditors may send the following notices and take the following action without concern over violating the bankruptcy stay or bankruptcy discharge:

*Monthly statements and coupons: Secured creditors may continue to send regular monthly statements and coupons to borrowers who file for bankruptcy protection. Often times, borrowers stop making payments merely because they fail to receive a monthly statement or coupon.

*Escrow Statements: Mortgagees may send escrow statements disclosing the status of a borrower’s escrow account.

*Change in Monthly Payment: Secured creditors may change the amount of a bankrupt debtor’s monthly payment resulting from an increase in property taxes or insurance premiums, or an increase in the interest rate of a variable rate loan.

Important Note: Although a notice may be mailed to a borrower who filed for bankruptcy protection, the notice cannot demand payment. Secured lenders must be careful and make certain the notices are for informational purposes only and are not being mailed as a means of collecting a debt.