Adversary Proceeding filed by Debtor

[Pesmaclaw]

Can anyone provide advice on a debtors ability to file an adversary proceeding challenging the validity of a mortgage lien for a number of reasons. My understanding is that the decision to go forward with something like this and the sole party able to do so is the appointed trustee. Assuming the trustee is not interested in pursuing the matter, which would be involved and beyond the knowledge and experience of the trustee, is there a way the debtor may pursue the matter directly? If so, is the ability to do so dependent upon the court's approval by way of motion, etc.?

Any help in this regard would be extremely helpful. Thanks!

[music12]

i am not sure, but i have a feeling that the validity of a lien would be something you'd take up with the state court rather than the bk court, and you would do that in response to someone trying to enforce the lien that you claim is not valid.

i'd ask justbroke (PM him/her if he doesn't post an answer here!)

[justbroke]

You can do this by complaint (adversary proceeding/AP) inside the BK process. It's no different than any other "Motion to Determine Status and Avoid Lien". APs can be expensive to fight and I don't suggest that an average person (not even myself) attempt to do this on their own. There are many more procedural concerns (due to the Federal Rules of Civil Procedure) over just merely filing a contested matter in the Bankruptcy.

Trustee's aren't the only ones who can bring forth these actions, and for the most part, a Debtor can act as Trustee in many circumstances.

The real question for me is... just what do you (Pesmaclaw) think you have on the lender? Bad paperwork? Improper documentation? Lost documentation?

Just because an adversary proceeding / complaint can be brought within the Bankruptcy process, does not diminish the fact that it's a full blown legal proceeding. Most pro se debtors who attempt to litigate an AP by themselves, usually get caught up in evidentiary and procedural issues. It's not as simple as just saying "look, their paperwork is wrong". They'll just bury in discovery and potentially just go for the everpowerful "Summary Judgment".

I don't mean to discourage you, but I strongly advise all my pro se friends not to attempt an AP themselves.


So bottom line... yes, you can file a complaint to determine the secured status of a lien. You do not have to be the Trustee or even have Trustee approval to do this. The downside is, that if you are not in a State which protects your homestead at 100%, then the Trustee, may join the complaint so they can take the place and sell it after you win.

[curiouscat]

You can do this by complaint (adversary proceeding/AP) inside the BK process. It's no different than any other "Motion to Determine Status and Avoid Lien". APs can be expensive to fight and I don't suggest that an average person (not even myself) attempt to do this on their own. There are many more procedural concerns (due to the Federal Rules of Civil Procedure) over just merely filing a contested matter in the Bankruptcy.

Trustee's aren't the only ones who can bring forth these actions, and for the most part, a Debtor can act as Trustee in many circumstances.

The real question for me is... just what do you (Pesmaclaw) think you have on the lender? Bad paperwork? Improper documentation? Lost documentation?

Just because an adversary proceeding / complaint can be brought within the Bankruptcy process, does not diminish the fact that it's a full blown legal proceeding. Most pro se debtors who attempt to litigate an AP by themselves, usually get caught up in evidentiary and procedural issues. It's not as simple as just saying "look, their paperwork is wrong". They'll just bury in discovery and potentially just go for the everpowerful "Summary Judgment".

I don't mean to discourage you, but I strongly advise all my pro se friends not to attempt an AP themselves.


So bottom line... yes, you can file a complaint to determine the secured status of a lien. You do not have to be the Trustee or even have Trustee approval to do this. The downside is, that if you are not in a State which protects your homestead at 100%, then the Trustee, may join the complaint so they can take the place and sell it after you win.

I have a question though, guess I could ask my attorney, but I'm curious: If a CA state Chap 7 debtor was successful in their AP against a mortgage servicer, would the court allow the debtor to convert to a 13 and keep the property?

My AP is not yet filed, but we have several claims against our servicer (TILA recission might be part of our strategy, but I'm not sure yet) & the goal is to get a judicially ordered modification at 80% of fair market value and 3% interest. I wouldn't advise anyone to go the AP route pro se either - the whole attitude of the court seems to be prejudiced against non-attorneys.

Also, on the "average" how many months does an AP usually go on for? (yes, I know know such thing - depends on case complexity & other factors)

Would the stay remain during the AP as the case is not yet discharged? No notice of default has been filed or do judges routine allow MRS awarded to creditor? There is a BIG question in my case as to who actually OWNS my loan and who has the authority to foreclose.

[HHM]

Also, keep in mind, the BK court has discretion not to hear a case. So, if you are bringing all sorts of claims TILA, RESPA, HOEPA, etc., the BK court can "punt" and say you need to bring those in Federal District Court, or if primarily state law claims, bring it in state court.

To answer the questions, for the nature of AP's you guys are probably contemplating, you are looking at 8-12 months. As for the automatic stay, a stay will remain intact for the specific issue. So, for example, if you are suing your mortgage company, the mortgage company will not be able to foreclose while the AP is pending. However, as to the rest of your BK, the stay will lift at discharge.

[curiouscat]

Also, keep in mind, the BK court has discretion not to hear a case. So, if you are bringing all sorts of claims TILA, RESPA, HOEPA, etc., the BK court can "punt" and say you need to bring those in Federal District Court, or if primarily state law claims, bring it in state court.

To answer the questions, for the nature of AP's you guys are probably contemplating, you are looking at 8-12 months. As for the automatic stay, a stay will remain intact for the specific issue. So, for example, if you are suing your mortgage company, the mortgage company will not be able to foreclose while the AP is pending. However, as to the rest of your BK, the stay will lift at discharge.

Thank you for answering my question. This site is a great resource and I'm so glad I found it!