Does the current mortgage payment amount include escrow for taxes and insurance? Is the current mortgage payment included in the Chapter 13 and paid by the Trustee, or does the Ch 13 plan call for direct payments by your parents to the mortgage on the current house payments, with only the past due balance rolled into the plan.

If the bankruptcy court approved the Chapter 13 plan, and the plan included the past due mortgage balance and addressed maintenance of current payments, either directly or through the plan, and then also addressed the past due and future tax payments, I do not believe the court will lift the stay to allow them to foreclose provided your parents and lived up to their part of the court's order confirming the plan.

Since the mortgage company sent a notice to your parents rather than just proceeding with a motion to lift the stay, my guess is that they have realized their "goof" in paying the 2003 taxes before realizing that the confirmation order included 2003 taxes to be paid by the trustee out of the bankruptcy estate. They may simply be seeking a modification to the plan to include repayment of the tax "overpayment" by them. Did they send a copy of this notice to your parents' bankruptcy attorney? Your parents need to talk to their attorney and let him/her respond to the mortgage company to resolve the discrepancy.

Your parents SHOULD NOT IGNORE the notice. They should immediately contact their bankruptcy attorney or at least place a call to the Chapter 13 trustee who may be able to act on the notice on behalf of the Ch 13 estate.