Class Action: Shellpoint Mortgage Servicing Demanded Payment During Bankruptcy Proceedings

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New Penn Financial, LLC, which does business as Shellpoint Mortgage Servicing, is on the receiving end of an Illinois consumer’s lawsuit filed over claims that the company improperly attempted to collect on her mortgage during pending bankruptcy proceedings.

According to the proposed class action, the plaintiff took out a mortgage in the amount of $183,850 for a Chicago residence in 2013. In May 2018, the complaint continues, the plaintiff filed for Chapter 13 bankruptcy, which triggered an automatic stay on collection activities. The following August, the bankruptcy court supposedly approved a plan that suspended any future payments on the debt and proposed the woman surrender her property to her creditor.

Nevertheless, the suit alleges that the defendant, who began servicing the debt in December 2018, unlawfully sent the plaintiff two collection letters while the automatic stay was in effect. The case argues that the plaintiff was misled into believing “her bankruptcy had no legal effect and that payments on the subject deb were due immediately despite her bankruptcy filing.”