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Trustee paying stripped liens as unsecured when no claim filed
Frank,
How do you interpret part 4?
"iv. The claim of the junior lienholder is to be treated as an unsecured
claim and is to be paid through the plan pro rata with all other unsecured
claims."
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
www.tilemlaw.com
818-507-6000
On Tue, Sep 24, 2013 at 8:32 AM, Frank Ruggier wrote:
> **
>
>
> 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 cant file a proof of claim and participate?.
> ****
>
> ** **
>
> Thats 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 ****
>
> ** **
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Michael Avanesian
> *Sent:* Monday, September 23, 2013 11:49 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* Re: [cdcbaa] Trustee paying stripped liens as unsecured when
> no claim filed****
>
> ** **
>
> ****
>
> It's very clear in the language of the Order,****
>
> ** **
>
> "The junior lienholders claim on the deed of trust, mortgage or lien
> shall be allowed as a non-priority general unsecured claim in the amount
> per the filed Proof of Claim.* The junior lienholder is not required to,
> but may file an amended Proof of Claim* listing its claim as an unsecured
> claim to be paid in accordance with the Debtor's chapter 13 plan. If an
> amended claim is not filed, the* Trustee may treat any claim on the debt
> (secured or unsecured) filed by the junior lienholder as unsecured upon
> entry of this order*." (emphasis added by me)****
>
> ** **
>
> 1. they are not obligated to file a claim.****
>
> 2. the trustee has discretion on how to treat the claim.****
>
> ** **
>
> I recommend that you modify the Order (since it's an optional form) to
> remove the language or use your own version of the Order that puts language
> in your favor. I know there is a move to standardize all these things we
> do, but the more standard they become, the more our powers as lawyers
> become restricted. ****
>
> ** **
>
> I would remove the language and I would explicitly make claim contingent
> upon a POC filed within 45 days of the entry of order granting the motion.
> Here is why:****
>
> ** **
>
> Under FRBP 3002, an unsecured claimant must file a proof of claim, if they
> don't, they get nothing. But, what if the creditor thought it was secured
> and the deadline for filing a POC has passed? ****
>
> ** **
>
> Under FRBP 3002(c), it says,****
>
> "(3) An unsecured claim which arises in favor of an entity or becomes
> allowable as a result of a judgment may be filed within 30 days after the
> judgment becomes final if the judgment is for the recovery of money or
> property from that entity or denies or avoids the entity's interest in
> property. If the judgment imposes a liability which is not satisfied, or a
> duty which is not performed within such period or such further time as the
> court may permit, the claim shall not be allowed."****
>
> ** **
>
> They get 30 days from when the Order becomes final which is 45 days from
> entry of order. This point of view is supported by the committee notes:***
> *
>
> Although the claim of a secured creditor may have arisen before the
> petition, a judgment avoiding the security interest may not have been
> entered until after the time for filing claims has expired. Under Rule
> 3002(c)(3) the creditor who did not file a secured claim may nevertheless
> file an unsecured claim within the time prescribed.****
>
>
> ****
>
> In summary, first, I would change the wording of the Order that the
> trustee is relying upon and second, I would add additional language
> clarifying the undersecured creditor's requirement of filing a POC. ****
>
> ** **
>
> I personally think it's unfair not to pay the unsecured claim -- or the
> claims of people who forget to file POCs but are owed $. Also remember that
> I did not research case law and I've never handled any aspect of a chapter
> 13 except I've been to 1 confirmation hearing. Sorry for weird fonts, this
> editor sucks.****
>
>
> Sincerely,****
>
> Michael Avanesian****
>
> Law Offices of David A. Tilem****
>
> www.tilemlaw.com****
>
> 818-507-6000****
>
> ** **
>
> On Mon, Sep 23, 2013 at 7:22 PM, Link Schrader
> wrote:****
>
> ****
>
> The lien to be avoided is entitled to the same percentage as the other
> unsecured creditors. If the trustee wants to pay a creditor who did not
> file a proof of claim that would seem to be error, but I don't see why it
> would matter if the base plan amount stayed the same and the confirmed plan
> included the junior lienholder's claim in the calculation for unsecured
> claims.****
>
> ****
>
> Do you want to ask the Court to order the trustee not to pay a claim that
> you confessed to and even gave a value to in your lien strip motion?****
>
> ****
>
> Also, if the debtor does not complete the plan and the lien is not avoided
> the debtor will be grateful for the payments made by the trustee. Be
> careful what you ask for.****
>
>
> ****
>
> *Link Schrader, Attorney*****
>
> Law Office of Link W. Schrader****
>
> Mail: P.O. Box 3723, Tustin, CA 92781****
>
> Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701****
>
> Office: (714) 542-5922; Mobile/Text: (310) 413-6924****
>
> Fax: (310) 878-4158; www.schrader-law.com****
>
>
> ______________________________________________________________________________________________________
> ****
>
> *This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.*****
>
> ** **
>
> On Mon, Sep 23, 2013 at 12:12 PM, Heather Canning
> wrote:****
>
> ****
>
> I have a case with Trustee Cohen and one with Trustee Curry in which
> stripped liens are being paid by the Trustee even if the stripped
> lienholder has not filed a claim. In one case the unfiled claim would put
> Debtor over the limit and in the other would force the plan payment up
> (percentage plan).
>
> Trustee is justifying this by saying the lien strip order language
> requires it to be set up this way. I want to argue that the language is
> ambiguous and should be interpreted as being consistent with Congressional
> intent, ie, only get paid if claim filed.
>
> F4003-2.4. Paragraph 4b iv states "The claim of the junior lienholder is
> to be treated as an unsecured claim and is to be paid through the plan pro
> rata with all other unsecured claims" and 4b. no. v states the junior lien
> holder's claim "shall be allowed as a non-priority general unsecured claim
> in the amount per the filed proof of claim."
>
> So, to me, this means no claim no money. Help?
>
> --
> Heather J. Canning, Esq.
> Simon Resnik Hayes LLP
> 510 West 6th St, Suite 1220
> Los Angeles CA 90014
> 213-572-0800 phone
> 213-572-0860 fax
> heather@srhlawfirm.com
> www.srhlawfirm.com****
>
> ** **
>
> ** **
>
> *Link Schrader, Attorney*****
>
> Law Office of Link W. Schrader****
>
> Mail: P.O. Box 3723, Tustin, CA 92781****
>
> Office: 106 W. 4th Street, Suite #308, Santa Ana,****
>
> CA 92701****
>
> Office: (714) 542-5922; Mobile/Text: (310) 413-6924****
>
> San Diego: (619) 952-8342; Fax: (310) 878-4158****
>
> www.schrader-law.com****
>
>
> ______________________________________________________________________________________________________
> ****
>
> This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.****
>
> ** **
>
> ** **
>
> ****
>
>
>
Frank,How do you interpret part 4?"iv. The claim of the junior lienholder is to be treated as an unsecured claim and is to be paid through theplan pro rata with all other unsecured claims."
Sincerely, Michael AvanesianLaw Offices of David A. Tilemwww.tilemlaw.com
818-507-6000
On Tue, Sep 24, 2013 at 8:32 AM, Frank Ruggier <frank@pricelawgroup.com> wrote:
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 cant file a proof of claim and participate?. Thats just my $0.02
The post was migrated from Yahoo.
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Ah, now I would argue that " The junior lienholder is not required to, but may file an amended Proof of Claim " does not mean they are not required to file a claim AT ALL, but rather if they have filed a claim already, they may amend it. If there is no claim, there is nothing to amend. Same with your second bolded portion.
Re: am I asking the Trustee not to pay a claim I admitted to - well, that is the nature of a Chapter 13. No claim, no payments for unsecured creditors. Why should a stripped lien be any different?
The post was migrated from Yahoo.
X-Yahoo-Newman-Id: groups-system
Ah, now I would argue that " The junior lienholder is not required to, but may file an amended Proof of Claim " does not mean they are not required to file a claim AT ALL, but rather if they have filed a claim already, they may amend it. If there is no claim, there is nothing to amend. Same with your second bolded portion.
Re: am I asking the Trustee not to pay a claim I admitted to - well, that is the nature of a Chapter 13. No claim, no payments for unsecured creditors. Why should a stripped lien be any different?
The post was migrated from Yahoo.
It's very clear in the language of the Order,
"The junior lienholders claim on the deed of trust, mortgage or lien shall
be allowed as a non-priority general unsecured claim in the amount per the
filed Proof of Claim.* The junior lienholder is not required to, but may
file an amended Proof of Claim* listing its claim as an unsecured claim to
be paid in accordance with the Debtor's chapter 13 plan. If an amended
claim is not filed, the* Trustee may treat any claim on the debt (secured
or unsecured) filed by the junior lienholder as unsecured upon entry of
this order*." (emphasis added by me)
1. they are not obligated to file a claim.
2. the trustee has discretion on how to treat the claim.
I recommend that you modify the Order (since it's an optional form) to
remove the language or use your own version of the Order that puts language
in your favor. I know there is a move to standardize all these things we
do, but the more standard they become, the more our powers as lawyers
become restricted.
I would remove the language and I would explicitly make claim contingent
upon a POC filed within 45 days of the entry of order granting the motion.
Here is why:
Under FRBP 3002, an unsecured claimant must file a proof of claim, if they
don't, they get nothing. But, what if the creditor thought it was secured
and the deadline for filing a POC has passed?
Under FRBP 3002(c), it says,
"(3) An unsecured claim which arises in favor of an entity or becomes
allowable as a result of a judgment may be filed within 30 days after the
judgment becomes final if the judgment is for the recovery of money or
property from that entity or denies or avoids the entity's interest in
property. If the judgment imposes a liability which is not satisfied, or a
duty which is not performed within such period or such further time as the
court may permit, the claim shall not be allowed."
They get 30 days from when the Order becomes final which is 45 days from
entry of order. This point of view is supported by the committee notes:
Although the claim of a secured creditor may have arisen before the
petition, a judgment avoiding the security interest may not have been
entered until after the time for filing claims has expired. Under Rule
3002(c)(3) the creditor who did not file a secured claim may nevertheless
file an unsecured claim within the time prescribed.
In summary, first, I would change the wording of the Order that the trustee
is relying upon and second, I would add additional language clarifying the
undersecured creditor's requirement of filing a POC.
I personally think it's unfair not to pay the unsecured claim -- or the
claims of people who forget to file POCs but are owed $. Also remember that
I did not research case law and I've never handled any aspect of a chapter
13 except I've been to 1 confirmation hearing. Sorry for weird fonts, this
editor sucks.
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
www.tilemlaw.com
818-507-6000
On Mon, Sep 23, 2013 at 7:22 PM, Link Schrader
wrote:
> **
>
>
> The lien to be avoided is entitled to the same percentage as the other
> unsecured creditors. If the trustee wants to pay a creditor who did not
> file a proof of claim that would seem to be error, but I don't see why it
> would matter if the base plan amount stayed the same and the confirmed plan
> included the junior lienholder's claim in the calculation for unsecured
> claims.
>
> Do you want to ask the Court to order the trustee not to pay a claim that
> you confessed to and even gave a value to in your lien strip motion?
>
> Also, if the debtor does not complete the plan and the lien is not avoided
> the debtor will be grateful for the payments made by the trustee. Be
> careful what you ask for.
>
> *Link Schrader, Attorney*
>
> Law Office of Link W. Schrader
>
> Mail: P.O. Box 3723, Tustin, CA 92781
>
> Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
>
> Office: (714) 542-5922; Mobile/Text: (310) 413-6924
> Fax: (310) 878-4158; www.schrader-law.com
>
> ______________________________________________________________________________________________________
>
> *This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.*
>
>
> On Mon, Sep 23, 2013 at 12:12 PM, Heather Canning wrote:
>
>> **
>>
>>
>> I have a case with Trustee Cohen and one with Trustee Curry in which
>> stripped liens are being paid by the Trustee even if the stripped
>> lienholder has not filed a claim. In one case the unfiled claim would put
>> Debtor over the limit and in the other would force the plan payment up
>> (percentage plan).
>>
>> Trustee is justifying this by saying the lien strip order language
>> requires it to be set up this way. I want to argue that the language is
>> ambiguous and should be interpreted as being consistent with Congressional
>> intent, ie, only get paid if claim filed.
>>
>> F4003-2.4. Paragraph 4b iv states "The claim of the junior lienholder is
>> to be treated as an unsecured claim and is to be paid through the plan pro
>> rata with all other unsecured claims" and 4b. no. v states the junior lien
>> holder's claim "shall be allowed as a non-priority general unsecured claim
>> in the amount per the filed proof of claim."
>>
>> So, to me, this means no claim no money. Help?
>>
>> --
>> Heather J. Canning, Esq.
>> Simon Resnik Hayes LLP
>> 510 West 6th St, Suite 1220
>> Los Angeles CA 90014
>> 213-572-0800 phone
>> 213-572-0860 fax
>> heather@srhlawfirm.com
>> www.srhlawfirm.com
>>
>
>
> *Link Schrader, Attorney*
> Law Office of Link W. Schrader
> Mail: P.O. Box 3723, Tustin, CA 92781
> Office: 106 W. 4th Street, Suite #308, Santa Ana,
> CA 92701
> Office: (714) 542-5922; Mobile/Text: (310) 413-6924
> San Diego: (619) 952-8342; Fax: (310) 878-4158
> www.schrader-law.com
> ______________________________**______________________________**
> ______________________________**____________
> This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.
>
>
>
It's very clear in the language of the Order,"The junior lienholders claim on the deed of trust, mortgage or lien shall be allowed as a non-priority general unsecured claim in the amount per the filed Proof of Claim. The junior lienholder is not required to, but may file an amended Proof of Claim listing its claim as an unsecured claim to be paid in accordance with the Debtor's chapter 13 plan. If an amended claim is not filed, the Trustee may treat any claim on the debt (secured or unsecured) filed by the junior lienholder as unsecured upon entry of this order." (emphasis added by me)
1. they are not obligated to file a claim.2. the trustee has discretion on how to treat the claim.I recommend that you modify the Order (since it's an optional form) to remove the language or use your own version of the Order that puts language in your favor. I know there is a move to standardize all these things we do, but the more standard they become, the more our powers as lawyers become restricted.
I would remove the language and I would explicitly make claim contingent upon a POC filed within 45 days of the entry of order granting the motion. Here is why:Under FRBP 3002, an unsecured claimant must file a proof of claim, if they don't, they get nothing. But, what if the creditor thought it was secured and the deadline for filing a POC has passed?
Under FRBP 3002(c), it says,"
The post was migrated from Yahoo.
The lien to be avoided is entitled to the same percentage as the other
unsecured creditors. If the trustee wants to pay a creditor who did not
file a proof of claim that would seem to be error, but I don't see why it
would matter if the base plan amount stayed the same and the confirmed plan
included the junior lienholder's claim in the calculation for unsecured
claims.
Do you want to ask the Court to order the trustee not to pay a claim that
you confessed to and even gave a value to in your lien strip motion?
Also, if the debtor does not complete the plan and the lien is not avoided
the debtor will be grateful for the payments made by the trustee. Be
careful what you ask for.
*Link Schrader, Attorney*
Law Office of Link W. Schrader
Mail: P.O. Box 3723, Tustin, CA 92781
Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
Office: (714) 542-5922; Mobile/Text: (310) 413-6924
Fax: (310) 878-4158; www.schrader-law.com
The post was migrated from Yahoo.
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
I have a case with Trustee Cohen and one with Trustee Curry in which stripped liens are being paid by the Trustee even if the stripped lienholder has not filed a claim. In one case the unfiled claim would put Debtor over the limit and in the other would force the plan payment up (percentage plan).
Trustee is justifying this by saying the lien strip order language requires it to be set up this way. I want to argue that the language is ambiguous and should be interpreted as being consistent with Congressional intent, ie, only get paid if claim filed.
F4003-2.4. Paragraph 4b iv states "The claim of the junior lienholder is to be treated as an unsecured claim and is to be paid through the plan pro rata with all other unsecured claims" and 4b. no. v states the junior lien holder's claim "shall be allowed as a non-priority general unsecured claim in the amount per the filed proof of claim."
So, to me, this means no claim = no money. Help?
Heather J. Canning, Esq.
Simon Resnik Hayes LLP
510 West 6th St, Suite 1220
Los Angeles CA 90014
213-572-0800 phone
213-572-0860 fax
heather@srhlawfirm.com
www.srhlawfirm.com
The post was migrated from Yahoo.
X-Yahoo-Newman-Id: groups-system
I have a case with Trustee Cohen and one with Trustee Curry in which stripped liens are being paid by the Trustee even if the stripped lienholder has not filed a claim. In one case the unfiled claim would put Debtor over the limit and in the other would force the plan payment up (percentage plan).
Trustee is justifying this by saying the lien strip order language requires it to be set up this way. I want to argue that the language is ambiguous and should be interpreted as being consistent with Congressional intent, ie, only get paid if claim filed.
F4003-2.4. Paragraph 4b iv states "The claim of the junior lienholder is to be treated as an unsecured claim and is to be paid through the plan pro rata with all other unsecured claims" and 4b. no. v states the junior lien holder's claim "shall be allowed as a non-priority general unsecured claim in the amount per the filed proof of claim."
So, to me, this means no claim = no money. Help?
Heather J. Canning, Esq.
Simon Resnik Hayes LLP
510 West 6th St, Suite 1220
Los Angeles CA 90014
213-572-0800 phone
213-572-0860 fax
heather@srhlawfirm.com
www.srhlawfirm.com
The post was migrated from Yahoo.