Filing A NOD

[TrustUser]

the owner has had his personal property and his business property placed in chapter 7. there are about 60 or so real estate properties placed into the bankruptcy. these are all SECURED. i am part lender on one of these properties. another investor just filed an NOD on one of the other properties. i am contemplating filing an NOD on my own property. what are the ramifications ? CALIFORNIA

 

[LdiJ]

the owner has had his personal property and his business property placed in chapter 7. there are about 60 or so real estate properties placed into the bankruptcy. these are all SECURED. i am part lender on one of these properties. another investor just filed an NOD on one of the other properties. i am contemplating filing an NOD on my own property. what are the ramifications ? CALIFORNIA

It is better not to use an acronym. People may not know what NOD stands for.

 

[TrustUser]

in a bankruptcy forum ? to be honest, i would not be interested in what they have to say, if that was true

 

[zddoodah]

If you file an NOD for property owned by a debtor in BK and have not received an RFS order, you would be violating the AS. Retain the services of a local attorney.

 

[TrustUser]

ok, thanks

 

[adjusterjack]

another investor just filed an NOD on one of the other properties.

Did the other investor get an RFS?

 

[PayrollHRGuy]

Retain the services of a local attorney.

That would be an LA.

 

[Litigator22]

the owner has had his personal property and his business property placed in chapter 7. (?)There are about 60 or so real estate properties placed into the bankruptcy. these are all SECURED. i am part lender on one of these properties. another investor just filed an NOD on one of the other properties. i am contemplating filing an NOD on my own property. what are the ramifications ? CALIFORNIA

An NOD? First you need to file a CC and do your contemplating about filing a NOD after the TIB makes a determination whether or not to abandon the secured property and agrees to a lifting of the ASO. (Ha!)

Incidentally, your terminology of "placing one's property in a Chapter 7" infers a misconception of the process. It could be seen as suggesting that the debtor has the power of offering up which of his assets he wishes to be administered by the trustee for the benefit of his creditors and which are to remain apart from that process. And that isn't how the system operates. It's the petitioning debtor that is placed in bankruptcy. Who must for purposes of administration by the trustee itemize all of his assets of every kind, nature and species wheresoever situated.

You need to spend some money with a bankruptcy specialist that can best describe the so-called "ramifications". With such a large inventory I'm very suspicious that this is indeed a C 7 liquidation as you've indicated and not a Chapter 11 reorganization. Which if so, the ramifications will be multiple

Good luck.

 

[quincy]

TrustUser, despritfreya (@despritfreya) is a bankruptcy attorney who is a member of this forum. I have tagged Des to see if additional information can be provided. It might be awhile for a response so you should continue to check back.

 

[despritfreya]

I will first assume that neither Chapter 7 cases are “involuntary” filings. I will assume that there were two voluntary Chapter 7 petitions filed, one by an entity and the other by an individual. I will further assume that all real property (except maybe, the individual’s residence) is titled to the entity. Lastly, I will assume there are mortgages (liens) against all 60 properties in varying amounts and with various lenders, one of whom is the OP. Even if my assumptions are not correct, the below would apply except, maybe in the case of a yet to be adjudicated Involuntary Chapter 7.

1. Issuing a Notice of Default to either an entity or an individual who is in bankruptcy without first obtaining an Order lifting the stay is a violation of the stay and could result in the imposition of sanctions.

2. If these really are Chapter 7 cases, the Trustee is now the “owner” of each property and each property is an asset of the bankruptcy estate. The Trustee will decide what to do with the properties. He/she will either market and sell them or, if he/she determines that there is insufficient equity in one or more properties, he/she will take steps to abandon those that have no value to the bankruptcy estate.

3. If a lienholder wishes to try to foreclose on a property, he/she/it will need to get the automatic stay lifted. Until the stay is lifted, the lienholder can do nothing but wait - but, when told to do so, the lienholder should file a proper secured Proof of Claim.

OP - you need to discuss your situation with a qualified bk attny in your area. Searching for answers off the Internet is not a smart move.

Des.

 

[TrustUser]

Did the other investor get an RFS?

i dont think so

 

[TrustUser]

An NOD? First you need to file a CC and do your contemplating about filing a NOD after the TIB makes a determination whether or not to abandon the secured property and agrees to a lifting of the ASO. (Ha!)

Incidentally, your terminology of "placing one's property in a Chapter 7" infers a misconception of the process. It could be seen as suggesting that the debtor has the power of offering up which of his assets he wishes to be administered by the trustee for the benefit of his creditors and which are to remain apart from that process. And that isn't how the system operates. It's the petitioning debtor that is placed in bankruptcy. Who must for purposes of administration by the trustee itemize all of his assets of every kind, nature and species wheresoever situated.

You need to spend some money with a bankruptcy specialist that can best describe the so-called "ramifications". With such a large inventory I'm very suspicious that this is indeed a C 7 liquidation as you've indicated and not a Chapter 11 reorganization. Which if so, the ramifications will be multiple

Good luck.

you guys are hilarious with all your abbreviations. i actually knew what an RFS was, cuz i had to look it up, previously. it is a chapter 7. yes, that is what the debtor is doing, as you described. which is why i am involved in it.

 

[TrustUser]

I will first assume that neither Chapter 7 cases are “involuntary” filings. I will assume that there were two voluntary Chapter 7 petitions filed, one by an entity and the other by an individual. I will further assume that all real property (except maybe, the individual’s residence) is titled to the entity. Lastly, I will assume there are mortgages (liens) against all 60 properties in varying amounts and with various lenders, one of whom is the OP. Even if my assumptions are not correct, the below would apply except, maybe in the case of a yet to be adjudicated Involuntary Chapter 7.

1. Issuing a Notice of Default to either an entity or an individual who is in bankruptcy without first obtaining an Order lifting the stay is a violation of the stay and could result in the imposition of sanctions.

2. If these really are Chapter 7 cases, the Trustee is now the “owner” of each property and each property is an asset of the bankruptcy estate. The Trustee will decide what to do with the properties. He/she will either market and sell them or, if he/she determines that there is insufficient equity in one or more properties, he/she will take steps to abandon those that have no value to the bankruptcy estate.

3. If a lienholder wishes to try to foreclose on a property, he/she/it will need to get the automatic stay lifted. Until the stay is lifted, the lienholder can do nothing but wait - but, when told to do so, the lienholder should file a proper secured Proof of Claim.

OP - you need to discuss your situation with a qualified bk attny in your area. Searching for answers off the Internet is not a smart move.

Des.

thanks, i do not think your assumptions are correct. but you did describe what is going on. i thought i would try to explain the situation more clearly, in case it makes a difference.

the company is a loan broker. i am a lender on one of the 60 or so properties. about a half dozen entities filed a suit against the company. i think these are unsecured investors.

there is only one bankruptcy. but i think it is involuntary, in the sense that it is not the company claiming bankruptcy. it is a bunch of angry investors who have hired attorneys. and the company is being forced into these bankruptcy proceedings.

most of these properties are secured, in that they have a registered title. i am secured, and am not really in any danger, as far as equity goes. there is a 2nd behind me though, who is in danger.

i may eventually need to hire a bankruptcy lawyer to get an RFS. i have had 3 experiences in the past with bankruptcy cases. it has been my experience that a judge looks almost exclusively at the equity a lender has, in determining whether to grant the relief. this bk is only just in the starting phase. few judges would grant me the order, at this point, cuz i have plenty of equity. a couple months into the bankruptcy may make a difference. i know some can drag out for years. i want to wait a couple of months to see where everything lays. and then i may hire a bk lawyer, if i think it is worth it.

some times in life the best thing is to do nothing. and that is where i am at, at the moment. i want to give it some time, see what else develops, what new info i learn, etc. i have the luxury of doing this, because i invest in high quality properties with lots of equity dollars in them, and a lower interest rate. but it allows me to sleep at night without worrying about stuff.

thanks for all the replies. the interesting thing in my case that i think will cause you guys to make some comments is the 2nd trust deed holder behind me. it is one of the entities that is being sued. i have found out that one of the principals is the manager or director of the LLC. but i do not know anything about the beneficiaries of the LLC.

my thought is that if they are being sued, it may be that the trustee figures he only has to worry about my lien. and in that case, he should be able to pay us off, and be able to make some money by selling it for his clients. i sent an email to the trustee's lawyer today, letting her know about the situation from our standpoint. my loan has what is called a default interest rate. which is the rate that gets charged should the borrower default on the note. it is 11%. so i explained to the lawyer that our property keeps getting more expensive each day. i wont settle for anything less than a full credit bid, as there is absolutely no reason to do so.

 

[despritfreya]

there is only one bankruptcy. but i think it is involuntary, in the sense that it is not the company claiming bankruptcy. it is a bunch of angry investors who have hired attorneys. and the company is being forced into these bankruptcy proceedings.

This changes things a lot. If the bk sticks, the entity will most likely convert to a Chapter 11. See 11 USC 303. Please note that the term "person" includes "an individual, partnership and corporation". See 11 USC 101(41)

some times in life the best thing is to do nothing. and that is where i am at, at the moment. i want to give it some time, see what else develops, what new info i learn, etc

This is a good strategy especially if, as you indicate, you are over secured.

sent an email to the trustee's lawyer today, letting her know about the situation from our standpoint. my loan has what is called a default interest rate. which is the rate that gets charged should the borrower default on the note. it is 11%. so i explained to the lawyer that our property keeps getting more expensive each day. i wont settle for anything less than a full credit bid, as there is absolutely no reason to do so.

The default rate is kind of low. I typically see them well in excess of that. In today's market, the "Till rate" is close to that. Regardless, try not to be a pompous arss. Up until a few years ago, I was able to screw folks like you out of that default interest rate (I might not have made a big deal over 11% - just depends). There may still be jurisdictions that weigh the equities and hold that such rates are impermissible penalties (although, admittedly, in today's market, 11% is not unreasonable). Just tread lightly, especially if the case converts to a Chapter 11. EDIT TO ADD: I just saw that this is in California. Default rates are enforceable so you should be fine on that. But, if this goes to a Chapter 11, your loan can be modified to whatever terms the Court will deem is "fair and equitable".

As to getting an attny. . . I assume that you understand that an over secured creditor is entitled to payment of its "reasonable fees, costs or charges provided for under the agreement. . ." 11 USC 506(b)

Des.

 

[TrustUser]

you gotta be kidding me - the court can modify the agreement signed between me and the borrower ?

i have seen default rates at 18%. but i am not greedy. the loan itself is at 8.5%, if i recall. i am not positive. it wasnt a big deal to me. i just wanted a safe place to make some money, other than .2% at the bank - LOL.

gosh, if there is gonna be a whole new bankruptcy, this thing is gonna last for over a year, most likely. when i talked to the trustee's lawyer, she told me that their first job was to separate the secured from the unsecured properties. but i dont see how that can take them very long. what is there to check ? either there is a note and trust deed, or there isnt.

my servicer services way over half of these loans, so they got almost immediate access to most of them.

if i came off as a pompous arss to this lawyer, it is because it is extremely irritating that they can come in and mess around with my secured loan. i find it a huge overreach. we were lenient with the borrower because of our equity situation, but they are about 4 months behind. i dont mind the trustee being able to put a hold on the portion that belongs to the debtor. i.e. that portion which is above the amount owed to the lenders. and there are now rules in california that a certain group of people still have the ability to buy the property after the foreclosure sale. so if they want to buy the damn property from us for what we have in it, that is fine. but to be able to hold things up like this, is RIDICULOUS IN MY OPINION.

it is like i offer you to buy my widget, and you telling me that you will think about it, and get back to me next year. and i am just supposed to wait ? and this is all started by people stupid enough to not have secured investments. and now i am having to pay for their problems. it is unfair in many ways !!