Central District Consumer Bankruptcy Attorney's Association

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These are "cure" cases which say that if you "cure" a default, then you are
restoring the loan to pre-default circumstances and lenders are not entitled
to recover default penalties and default interest. They are entitled to
actual damages resulting from the default, a little like the executory
contract standard, but default penalties and interest per se are not
allowable. The leading case in this circuit is the Entz-White decision.
There is some question whether this doctrine survived amendments to the Code
in 1994 and that issue is still being litigated - that's the Platinum
Capital case.
This battle has been played out almost exclusively in the Chapter 11 arena
under Sects. 1123 and 1124, rather than in the consumer arena under
1322(b)(3) because consumer loans have not traditionally had default
penalties and default interest rates. If we are starting to see these types
of terms, then we need to jump on the issue ASAP.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.

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Tyson,
Can you send me the case number or a copy of the POC? I would love to see it.
M. Erik Clark
Borowitz, Lozano & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
www.BLClaw.com
Office: (626) 332-8600
Fax: (626) 332-8644
Board Certified in Consumer Bankruptcy
American Board of Certification
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David, Can you give us a quick synopsis of these cases? I don't have access to pull them right now.
M. Erik Clark
Borowitz, Lozano & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
www.BLClaw.com
Office: (626) 332-8600
Fax: (626) 332-8644
Board Certified in Consumer Bankruptcy
American Board of Certification
________________________________

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I would send a letter to the attorney who filed it asking for authority to include it in the POC. If they do not amend then file an Objection. Remember there was a case recently (don't think it was 9th Cir.) that said if you want Atty's fees in objecting to a POC then you have to do it through an Adversary proceding.
M. Erik Clark
Borowitz, Lozano & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
www.BLClaw.com
Office: (626) 332-8600
Fax: (626) 332-8644
Board Certified in Consumer Bankruptcy
American Board of Certification
________________________________

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VERY IMPORTANT ISSUE:
See Platinum Capital, Inc. v. Sylmar Plaza, L.P. (In re Sylmar Plaza, L.P.),
314 F.3d 1070, 1075 (9th Cir. 2002); In re Entz-White Lumber and Supply,
Inc., 850 F.2d 1338, 1342 (9th Cir. 1988).
IF YOU FIND ANY OTHER C13 CASES ON THIS ISSUE - PLEASE LET ME KNOW ASAP
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.

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Hi everyone,
Mortgage company has filed their Proof of Claim for mortgage arrears.
Claim includes $20k mortgage prepayment penalty. Is debtor required to
pay the mortgage arrears AND the penalty????
Thanks!!!
Ty Takeuchi

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