Trustee's attorneys called with new proposal

Chapter 7 filed in Maryland,


After being faced with loosing reaffirmed vehicles due to new technique the trustees have learned to use of stripping people of the liens to find equity. We have descided to convert into a chapter 13 to save mentioned vehicles. Once the attorneys of the trustee found this out they called our lawyer today to offer a "new" deal.

First of all the way they found to strip these liens is to find out if the finance company filed the registration of the vehicle in a timely fashion. they have 20 days to do so. If they fail they can be found in default and therefor the lien can be stripped. They would be out of what ever the original loan amount was for. And we are out of a vehicle.

Having that said, here comes the "new" proposal. If we agree to give them permission to contact our finance companies they will try to offer a settlement with them. My therory is they are banking on the finance companies having no knowledge of the 13 so they will be willing to settle for a "lessor" fee.

From what I gather, they will try to have them pay a sum and allow them to retain theyre lien with us as originaly contracted. And we would go back to the chapter 7 filing. What I get from all this is that the trustee doesnt want to wait 5 yrs to get his money and by doing it this way his chances of a higher recovery will look very good.

I asked my lawyer today how this would effect me in the future. She said that this would get things finished alot faster and we could finally be over and done with it all. I asked her if the finance companies could come back on us for anything, she answered no.

Now Im totally confused. 7.....13....new deals. This seems to be out of control. Who do I trust and believe at this point? And can I get something from the finance companies if they do agree to this new arrangment offered by the trustee that guarentees that I am under original contract and not liable for fees they incured by the trustee? Has anyone ever heard of such a thing? What shoudl I be doing now to protect myself and vehicles?

Thanks for any info you may have,
Di

you should be doing what your atty tells you to do in order to protect yourself. seems like the trustee's attys (they're pretty creative) are the ones running backwards now.

[Elmo-1]

It appears the Trustee found a loophole that allows him to legally extort money from the lender. Now he wants your permission to arrange an extortion settlement. What a scam! It's amazing how these so-called 'respected' citizens in our community will use the law to bully money from innocent business people (the lenders in this case).

As for the effects it'll have on your case, the Trustee's extortion plot may not really matter since you already have your unsecured debts discharged in Ch 7. If his actions result in a lower balance for you, then it's a different story. If there is no difference in the balance, who cares that the Trustee gets his money early. What does it matter that you have a 3-5 year 100% Ch13 - it's all secured debt and can be paid out anytime you choose. It would be tempting to tell him to go pitch rocks at the track.

The only drawback to refusing the Trustee permission to get up-front extortion money is in Ch13 you'll be in his arena for the duration of your plan. You never know, you may need his OK to get an extention, additional debt, etc. Not that he'll remember you did this for him, but he will surely remember if you don't.

Hiya Elmo,


I see what your saying, Truely unbelievable isnt it? Not sure after you read about the extortion if you seen that he also wants me to convert back to the ch7 filing to finish this thing off and stop the ch13. What money he recovers from the finance company will result in a final decree. Otherwise if he can not get them to agree to this then ch13 payment plan will have to go into effect.

The only thing that bothers me is can I get something from the finance company stating that I am not liable for any of the settlement money they had to pay to the trustee? If they do agree to this.

And I wonder after I pay these vehicles off in 5 yrs. what the finance companies will think of me when the time comes to purchase a future vehicle through them. Or will I need to find a diffrent make vehicle and finance company?

Thanks Elmo for you time once again,
DI

[Elmo-1]

You already have your unsecured debts discharged, the only Ch 7 proceedings left to 'fully administer the estate' is to distribute the assets and close the case. The secured assets with non-perfected liens (which is the loophole) can't be distributed if you choose to retain them in a Chapter 13. Seems he would have to take the money out of your payment plan, pay the secured portion of their claim and take his cut. Again, the unsecured portion of this debt should have been discharged.

The deal he cuts with the lenders is between those two entities. Any attempt to collect a debt that's been discharged in Bk is illegal. This was the lender's mistake and you won't be expected to pay for it.

There's a Maryland attorney (Brett Weiss) who visits the following site daily:

[url]http://chat-cards.com/wwwboard/bankruptcy/messages.html[/url]

He can possibly shed some light on exactly what may be going down and the ramifications this might have on you. Try posting there one time & see if he'll respond. Put something about "Need a Maryland Attorney's Advice" in your post title.

Also, in 5 years your credit should be nearly normal, hopefully with better debt:income ratio and a decent FICO score - as long as you take care during this time. This is especially true with the early discharge of a Ch 7. Your current lender and several others will be glad to give you a loan. You'll be able to shop for interest rates at that time.

Elmo,

Im so happy to see that there are people like you out there that care enough to take the time to exsplain things. It is very frustrating trying to understand how everything works. Much less making sure that you are doing the right thing.

Thanks so much for the tip, I will try that. This has been going on now since June of this yr. Seems like forever. Trust me when I say I will never go through this again! I will stay as squeaky clean as I can not just for the next 5 yrs, but from here on out.

Most of this debt is due to a divorce back in 1998. I was just a co- signer on alot of it. Non the less I am still liable. Valuable lesson learned there.

Thanks again for all your help! Your time and information is greatly appreciated.

Di