Trustee paying stripped liens as unsecured when no=20

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It all depends on your judge, too. Judge Riblet's position is crystal
clear that the striped junior lien must be paid as an unsecured creditor,without exception. She announced at the Chapter 13 confirmation calendar a few
months ago that she caught language in the adversary judgment submitted bywhat she "thought was a quality attorney" trying to require the stripped
junior lienholder to file a claim in order to be paid. She chastised
everybody and said she was going to pay more attention to all the proposedjudgement submitted to make sure language was included stating that the junior
lienholder was not required to file a proof of claim. She did not explain
her reasoning.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 9/25/2013 10:21:40 A.M. Pacific Daylight Time,
michael@avanesianlaw.com writes:
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 unsecuredclaims."
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
_www.tilemlaw.com_ (http://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 filedpresumes 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.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 (mostof which manage to file claims). Why do we want to reward a creditor thatcant 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_ (tel:(818)%20205-2406)
Fax: _(818) 907-2106_ (tel:(818)%20907-2106)
_www.pricelawgroup.com_ (http://www.pricelawgroup.com/)
[mailto:_cdcbaa@yahoogroups.com_ (mailto:cdcbaa@yahoogroups.com) ] On Behalf Of Michael
Avanesian
Sent: Monday, September 23, 2013 11:49 PM
To: _cdcbaa@yahoogroups.com_ (mailto: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 claimis not filed, the Trustee may treat any claim on the debt (secured or
unsecured) filed by the junior lienholder as unsecured upon entry of thisorder." (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 theydon't, they get nothing. But, what if the creditor thought it was securedand 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 thejudgment 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. Ifthe 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, thiseditor sucks.
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
_www.tilemlaw.com_ (http://www.tilemlaw.com/)
_818-507-6000_ (tel: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 thatyou 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 avoidedthe 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_ (tel:(714)%20542-5922) ; Mobile/Text: _(310)
413-6924_ (tel:(310)%20413-6924)
Fax: _(310) 878-4158_ (tel:(310)%20878-4158) ; _www.schrader-law.com_
(http://www.schrader-law.com/)

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