Filing A NOD

[TrustUser]

i dont think i did come off as a pompous arss though - just between you and me. it was not my intention. i just politely told her that the rate is now at 11%, and it would be cheaper the sooner they bought it. i kept my real feelings about the mess to myself.

 

[TrustUser]

if this does change to a chapter 11 like you think it might, is it apt to still have all these secured properties under its umbrella ? the lawyer told me that it is their intention to gradually release the secured properties. but whether that is truthful, or when they do it, is unknown.

to me, i was thinking that 11% is an extremely high amount of profit to make. thinking it would encourgage them to act. i dont think i even asked about the default rate when i made the loan. it wasnt important to me. i mainly look at the equity situation, and just want to know that i am well secured, so that i dont need to be concerned with it. making money is just a very minor part of my life, and i want to keep it that way.

 

[despritfreya]

it is because it is extremely irritating that they can come in and mess around with my secured loan.

Welcome to the real world. Bankruptcies are filed all the time. Secured creditors are involved and must deal with such cases as the law allows. If you do not want to be the equivalent of a bank, then don't lend out your money.

if this does change to a chapter 11 like you think it might, is it apt to still have all these secured properties under its umbrella ? the lawyer told me that it is their intention to gradually release the secured properties.

If the case remains as a Chapter 7, the Chapter 7 Trustee will administer the assets or abandon the ones that do not benefit the estate. The Chapter 7 Trustee's job is to liquidate what can be liquidated for the benefit of unsecured creditors. In the process of liquidating, the properly perfected secured creditors will get paid at close of the sale (escrow) and whatever is left (after payment of all liens, encumbrances, closing costs, commissions etc.) will be held by the Trustee for the benefit of unsecured creditors.

In an Involuntary case, the Debtor is served with the action and then has time (probably 30 days after the issuance of the summons) to file an Answer. In my experience, if the Debtor cannot get the Involuntary case thrown out, he/she/it will elect to convert to a reorganization (typically a Chapter 11) so that the Chapter 7 Trustee does not liquidate the assets.

If it converts to a Chapter 11 you will have to deal with the Debtor's attorney. The Debtor may surrender some properties to the lienholders, it may sell some properties, it may restructure the debt on some of the properties. Your attorney can reach out to the Debtor's attorney when the time is right to find out what the Debtor intends to do with the property that secures your claim.

Des.

 

[TrustUser]

if it converts, is there a chapter 11 trustee in charge ? if so, is it usually the chapter 7 trustee ?

i am not sure if the answer period has expired or not. like i said, the bankruptcy is fairly new, at least as far as i know

my first knowledge was an email sent to us by our servicer. so it may be a few weeks before i know if it is converted to a chapter 11 (assuming a 30 day period)

 

[despritfreya]

if it converts, is there a chapter 11 trustee in charge ? if so, is it usually the chapter 7 trustee ?

Unless the court removes the Debtor In Possession (DIP) due to mismanagement or some other bad act, the Debtor is the Trustee in a Chapter 11. If the Debtor elects to file as a Subchapter V Chapter 11, a trustee is appointed but his/her job is to assist the debtor and creditors in an attempt to come to a consensual Plan.

am not sure if the answer period has expired or not. like i said, the bankruptcy is fairly new, at least as far as i know my first knowledge was an email sent to us by our servicer. so it may be a few weeks before i know if it is converted to a chapter 11 (assuming a 30 day period)

You can monitor the case in real time by accessing it through PACER. Go to www.pacer.gov to sign up. There is a charge for the service but the charge is waived if you stay below the download limit allowed each month.

Des.

 

[TrustUser]

ok, thanks. i know one of the owners is the main culprit. i dont recall all the specifics, but he has done some sorta bad stuff. i would not be surprised if he is not allowed to run it, himself.

i have had 3 other bks in the distant past. i got sorta instant reliefs. i would not have had anywhere near the funds back then, so i probably had nowhere near the equity in them, as i do with this one.

chapter 13 seems be the number that comes to mind, first. is there such an animal ? is it possible that i went thru them ? they were all just individuals. and i dont think they were actually bankrupt ? it was more of something to file to try and save one particular asset. it has been over 10 years, so i no longer recall the specifics.

thanks for all your help. i will keep the forum up to date as i learn new stuff. which i expect to do over the next month. i dont think the owner is gonna let his properties be sold by this trustee, either - now that i know he has a choice.

 

[doucar]

Yes there is a chapter 13 often called the wage earner plan. The debtor proposes a plan to repay all their unsecured debts, in whole or in part, over a 3-5 year period. It is over seen by a chapter 13 trustee. In order to be included in the plan, the unsecured creditor must file a proof of claim. Secured creditors can have their interest modified.

 

[despritfreya]

chapter 13 seems be the number that comes to mind, first. is there such an animal ? is it possible that i went thru them ? they were all just individuals. and i dont think they were actually bankrupt ? it was more of something to file to try and save one particular asset. it has been over 10 years, so i no longer recall the specifics.

If these were individuals then most likely they filed Chapter 13. If any of them were over the debt limit allowed at that time, that person would have filed Chapter 11. Entities cannot file Chapter 13. A Chapter 13 is relatively simple as compared to a Chapter 11. Today, the allowed debt limit is $2.5 million so many folks who would be forced into a much more expensive and complicated Chapter 11 now qualify for Chapter 13.

Des.

 

[TrustUser]

ok, great. the one small bk was probably a 13. the other 2 were big, and involved many properties. one of them was my prop mgmt company. the other one was a big construction project. each time i have a problem, at least i learn by it.

 

[TrustUser]

hi des,

many of the investors had already started foreclosure. they may not have had the same level of security as me. or they simply never allow the borrower to get 4 months behind. i assume the trustee informs everyone that had filed foreclosure, about the bankruptcy ?

if they do acquire a relief, can they start the foreclosure process from where they left off ? or do they have to do a new one, and start counting the days all over again ?

also, if this does go to reorganization like you think, do they have to file a brand new NOD, because of the change in bankruptcy ?

 

[despritfreya]

many of the investors had already started foreclosure. . .i assume the trustee informs everyone that had filed foreclosure, about the bankruptcy ? if they do acquire a relief, can they start the foreclosure process from where they left off ? or do they have to do a new one, and start counting the days all over again. . . if this does go to reorganization. . . do they have to file a brand new NOD

Every creditor that the Petitioning Creditors know about would have been included on the initial mailing list. The automatic stay of 11 USC 362 came into immediate effect the moment the Involuntary Petition was filed. As a result, the pending trustee sales (foreclosures) were put on hold. Normally, the sale date is continued from time-to-time until the stay is lifted. There is no requirement to go back to square one. If, on the off chance, a creditor was not aware of the filing of the Petition in time to postpone the sale, the sale is void. (See In re Schwartz, 954 F.2d 569 (9th Cir. 1992) actions taken in "[v]iolation of the automatic stay are void. . .")

Des.

 

[TrustUser]

if i were to go thru the process of getting a relief now (with this chapter 7 trustee), would i have to get another relief if it were to go to the reorganization mode ?

i dont think i have a good chance of getting one, right now - because of my equity position. but if the trustee has not done something specifically with my property after 2 months or so, i think i might have a better chance of getting the relief

 

[TrustUser]

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.

hi quincy, i forgot to thank ya for sending des along

 

[despritfreya]

if i were to go thru the process of getting a relief now (with this chapter 7 trustee), would i have to get another relief if it were to go to the reorganization mode ? i dont think i have a good chance of getting one, right now - because of my equity position. but if the trustee has not done something specifically with my property after 2 months or so, i think i might have a better chance of getting the relief

1. Until the case has been adjudicated as an Involuntary Petition, nothing is going to happen. You need to determine where in that process things stand.

2. Once the stay is lifted, it is lifted. A conversion of the case is not going to change that unless there is something in the Order granting the lifting of the stay that limits its application (highly doubtful).

3. Waiting two months is probably not long enough. However, that does not mean you can't or shouldn't file the motion. You, as the creditor, will do what you think is right for you. If the Trustee wants to defend keeping the stay in place, he/she will file a response to the Motion.

Des.

 

[TrustUser]

hi des,

when you say "adjudicated as an ip", i am interpreting that to mean whether the debtor is gonna be able to throw the bk out of court

if that is what you mean, then i am fairly sure the case has already moved beyond that. i have been told that the debtor plans to be aggressive

so i have every thought that he will convert it to a reorganization, if the courts allow it. i will update you when i find out new stuff.

i do think i will learn a lot by the end of the year

if it hasnt changed chapters by the end of the year, is it pretty safe to think that it is going to do so at all ?

also there were a couple of sites that defined this type of situation as one that typically only comes about when the debtor has funds to pay the unsecured creditors, but isnt doing so