1099-C issued with refusal to avoid lien
Posted: Sun Feb 26, 2012 11:24 pm
You could ask for attorney fees, but I doubt a judge would grant them.
On Feb 26, 2012 10:11 PM, "Nicholas Gebelt" wrote:
> **
>
>
> True. I was hoping to make Ocwen pay since they are the bad party here.*
> ***
>
> ****
>
> If the numbers work file the Lam motion. They aren't that expensive and
> you get paid by the trustee funds. ****
>
> On Feb 26, 2012 5:29 PM, "Nicholas Gebelt" wrote:*
> ***
>
> ****
>
> Dear List Mates,****
>
> ****
>
> I have an unusual twist on the 1099-C cancellation of debt issue.****
>
> ****
>
> On January 27 I filed Chapter 13 papers for a client who has not lost his
> primary residence. He filed Chapter 13 to catch up on his mortgage
> arrearages on both his first with B of A, and his second with Ocwen.****
>
> ****
>
> The Ocwen debt used to be a Litton debt, but Ocwen bought Litton in June
> 2011. A few days ago my client received a 1099-C on the Litton/Ocwen debt
> - with the cancelled debt being the same as the current debt to Ocwen,
> literally to the penny. According to the form, the date of debt
> cancellation was March 23, 2011, two and a half months before Ocwen bought
> Litton.****
>
> ****
>
> I called Ocwens bankruptcy department and described the situation. I
> pointed out that since Ocwen is benefiting from the tax write-off for the
> entire second mortgage debt, they must remove the lien. The representative
> read from Ocwens internal records and said that while Ocwen wouldn't try
> to actively collect the debt, they wouldn't remove the lien. Moreover, he
> said that Ocwen was open to negotiating a partial payment on the debt.****
>
> ****
>
> I responded by saying that my client offered to pay zero since the debt
> had been discharged, and told him that Ocwens refusal to avoid the lien
> constituted tax fraud. After all, if the lien remains my client can't sell
> or refinance without paying off the debt - clear double-dipping on Ocwen> part. I wrote them a letter memorializing the conversation and giving them
> 20 days to remove the lien and refund the one postpetition mortgage payment
> my client made before receiving the 1099-C.****
>
> ****
>
> My questions: What hook can I use to get the Bankruptcy Court involved?
> Can the refusal to remove the lien be characterized as a stay violation?
> It seems a bit of a stretch. I could file a Lam motion, but then my client
> has to incur costs associated with it. What I'm looking for is a way to
> get Ocwen to have to pay for my services. Any thoughts?****
>
> ****
>
> Thanks in advance,****
>
> ****
>
> Nick****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Certified Bankruptcy Specialist****
>
> ****
>
> [image: Description: cid:image003.jpg@01CC076B.B14D73C0]****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
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> under the Bankruptcy Code.*****
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> ****
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>
You could ask for attorney fees, but I doubt a judge would grant them.
On Feb 26, 2012 10:11 PM, "Nicholas Gebelt" <ngebelt@gebeltlaw.com> wrote:
True.party here.
If the numbers work file the Lam motion. They aren't that expensive and you
get paid by the trustee funds.
On Feb 26, 2012 5:29 PM, "Nicholas Gebelt" <ngebelt@gebeltlaw.com> wrote:
Dear List Mates,
I have an unusual twist on the 1099-C
cancellation of debt issue.
On January 27 I filed Chapter 13 papers
for a client who has not lost his primary residence. He filed Chapter 13
to catch up on his mortgage arrearages on both his first with B of A, and his
second with Ocwen.
The Ocwen debt used to be a Litton debt,
but Ocwen bought Litton in June 2011. A few days ago my client received a
1099-C on the Litton/Ocwen debt - with the cancelled debt being the same as the
current debt to Ocwen, literally to the penny. According to the form, the
date of debt cancellation was March 23, 2011, two and a half months before
Ocwen bought Litton.
I called Ocwens bankruptcy department
and described the situation. I pointed out that since Ocwen is benefiting
from the tax write-off for the entire second mortgage debt, they must remove
the lien. The representative read from Ocwens internal records and said
that while Ocwen wouldn't try to actively collect the debt, they wouldn't
remove the lien. Moreover, he said that Ocwen was open to negotiating a
partial payment on the debt.
I responded by saying that my client
offered to pay zero since the debt had been discharged, and told him that
Ocwens refusal to avoid the lien constituted tax fraud. After all, if
the lien remains my client can't sell or refinance without paying off the debt
- clear double-dipping on Ocwens part. I wrote them a letter
memorializing the conversation and giving them 20 days to remove the lien and
refund the one postpetition mortgage payment my client made before receiving
the 1099-C.
My questions: What hook can I use
to get the Bankruptcy Court involved? Can the refusal to remove the lien
be characterized as a stay violation? It seems a bit of a stretch.
I could file a Lam motion, but then my client has to incur costs associated
with it. What I'm looking for is a way to get Ocwen to have to pay for my
services. Any thoughts?
Thanks in advance,
Nick
Nicholas Gebelt, Ph.D., J.D.
Certified Bankruptcy Specialist
ge001.jpg@01CCF4D3.7EFBF4E0" alt"Description: cid:image003.jpg@01CC076B.B14D73C0">
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX:span>
Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
Web:http://www.goodbye2debt.com/" target"_blank">
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