Trustee paying stripped liens as unsecured when no

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To: cdcbaa@yahoogroups.com
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I respectfully disagree. The language of the order is not so clear. I believe the language of the Order requires that a Proof of Claim be filed.
Your BOLD type indicates that the creditor may file an "amended Proof of Claim". This presumes that the creditor has already filed a Proof of Claim. Again the language is "if an amended claim is not filed..." and again presumes that creditor filed a Proof of Claim in the first place. An argument that the creditor must file a proof of claim (just like any other unsecured creditor) is the language that "lien shall be allowed as a non-priority general unsecured claim in the amount per the filed Proof of Claim." So, no allowed claim if no filed Proof of Claim.
There are practical and policy reasons for requiring creditor to file a Proof of Claim to be paid. A problem of giving the creditor an allowed claim without having the requirement to file a proof of claim is that Trustee not knowing where to send the money to as these servicers often change multiple times during a bankruptcy and by the time the Trustee goes to pay this secured creditor it may be years from filing. I believe the policy is that we want creditors to file proof of claims and participate in the bankruptcy. These junior lienholders by way of the service requirements for motion to avoid their lien have more notice than all of the other creditors (most of which manage to file claims). Why do we want to reward a creditor that can't file a proof of claim and participate?.
That's just my $0.02
Frank X. Ruggier
Price Law Group, APC
15760 Ventura Blvd., Suite 1100
Encino, CA 91436
Direct: (818) 205-2406
Fax: (818) 907-2106
www.pricelawgroup.com

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