Central District Consumer Bankruptcy Attorney's Association

Hale:
I'm sorry. I am behind on my e-mails and don't recall why I originally
wrote my e-mail below (and I'm not tech savvy enough to find the
original message).
However, my best answer is CYA all debtors. Some will have money in the
bank that can be used to pay the second mortgage (and by second mortgage
I mean all liens that you are attempting to strip i.e. second and/or
third, etc). You will have to have your mortgage declaration at the
341(a) hearing or you run the risk of the trustee listing it as an
objection to confirmation which will put the court on notice that your
client has not complied with her rule. I am not sure that what she will
do with that information but I don't want to find out. Then, you need to
calculate that amount of time that it is going to take you (if all goes
well) to get your Motion for Default on Calendar. Once you have
calculated the time, you will ask Kathy, Aki or Angela to kick your
confirmation hearing out to a date past that time. Judge Carroll does
not like to continue cases for resolution of the AP so you want to make
sure that you will have enough time to file your request for default and
motion for default. If you kick the confirmation hearing out far enough,
your AP will be decided and you will not need to prove up any of the
second mortgage payments. Now, you may want to ask Aki during this
weekends Seminar whether she is going back and making sure that the
debtor made all the payment that came due to the creditor prior to her
decision on the motion for default. I don't think she is but do not know
for sure. And as you know, if the debtor does not send in the second
mortgage payments you run the risk of an MFR but that is unlikely to
happen if the lien is wholly unsecured. In fact, most creditors drag
their feet filing the proof of claim.
By the way, the motion for default process is not always that simple
with Judge Carroll either but you will have to pay me a boat load of
money to pry that information from me.
Hope this answers your question.
Nancy Clark
Borowitz & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
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Sometimes, debtors come to you and they're late on their mortgages. So late
they can't get current on their own. So they file a Chapter 13 to help them
catch up on their 1st mortgage and intend to strip the second via Lam motion
or AP. And as luck would have it, 1 out of 4 happens and they draw EC as
judge. As I understand it, Judge Carroll is the only one that requires the
2nd to be current and have money in the budget to pay for it.

How do you advise debtors at this point?

Hale
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