Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
We purchased a 2nd lien, and by the time it was transfered, we passed the date to file as a secured creditor due to the prior servicers attitude of most will not make it through CH 13, and they are over 2 years into the Ch 13 plan.
So we are unsecured and have to wait for it to be dismissed, and we can't foreclose since they are in Ch 13. Short of trying to get a stay, what would some of you do if you were us? Appreciate any and all replies...
@Chad U. plays in this pond and knows more about bk and notes than I do.
@Christopher Winkler Did you pull the BK13 confirmed plan from PACER? What assessed value did they use and is there equity above the 1st, Did it get discharged in the BK? I think your only hope at this point would be to wait to see if they fail to pay into the plan and for the Trustee to file a motion to dismiss, then commence FC. Otherwise, you can likely file a personal judgment against them if it didn't get discharged. You'd have to check on state laws wrt to that.
Attorney · Atlanta, GA · Member since 2014 · 4 posts · 1 vote
8y
@Christopher Winkler Unless your junior lien was stripped in the BK, you are only being treated as unsecured as regards the Ch.13 plan, though your lien is still valid, as @Wayne Brooks was getting at. If the lien is still valid, then you could file a motion seeking relief from the stay based on the post-bk missed payments. The business decision of whether to do that however hinges on there being equity above the 1st lien and other factors that you're likely used to evaluating. Hope that helps.
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Christopher Winkler My understanding is that if you don't file a POC before the deadline, your debt is not included in the payment plan but your debt continues to exist and collect interest. Your lien doesn't become unsecured unless it's stripped by the court. Basically, you are stuck in limbo until the the case is dismissed because the automatic stay prevents you from foreclosing.
I've read that some borrowers (especially the ones that are legitimately trying to pay their debts) will file a POC on behalf of creditors, which they are allowed to do. In the case of the big banks, i could see how they might not get the POC filed in time, which screws over the borrower since they can't include that debt in the plan.
In your case, you might have to wait it out. The interest on your note should be accruing during the time you have to wait.
@Christopher Winkler My understanding is that if you don't file a POC before the deadline, your debt is not included in the payment plan but your debt continues to exist and collect interest. Your lien doesn't become unsecured unless it's stripped by the court. Basically, you are stuck in limbo until the the case is dismissed because the automatic stay prevents you from foreclosing.
I've read that some borrowers (especially the ones that are legitimately trying to pay their debts) will file a POC on behalf of creditors, which they are allowed to do. In the case of the big banks, i could see how they might not get the POC filed in time, which screws over the borrower since they can't include that debt in the plan.
In your case, you might have to wait it out. The interest on your note should be accruing during the time you have to wait.
That's exactly where we are, so its just a waiting game. Already had a couple attempts to dismiss, and with 3 years left, we let it accrue interest...
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Christopher Winkler Have you put the loan out for bid to see what you can get for it? Just curious to know what it would trade at. Maybe it's better to unload it now, even if you take a loss, and buy something else instead of having your capital tied up for so long.