LVNV Funding filed a claim for debt that was charged off 20 years ago

[womanonfire]

Putting in the provision is what invites an objection to confirmation. It's just a different way. If you put it in as a provision, maybe they'll miss it, the plan gets confirmed, and then they are bound by the plan. I think that is what people hope for when adding additional provisions.

But that is fine that it does actually because 1. The Trustee has no basis for objection to the plan and I can see no reason why a Trustee would take the time and incur the expense to object simply to the non distribution of any money to a time barred debt. 2. If the bottom feeder objects, NOW we might have abusive litigation and reason for sanctions. I mean what would the basis of the objection from the bottom feeder even look like? They must admit at some point that they can not legally collect on the debt under state law.

Just me thinking out loud and take none of this as from any practical experience.

Personally, and I say this as a Pro Se, I don't see that specific provision helping.

From https://lundinonchapter13.com/NACTT2...eSection/120.2

11 U.S.C. § 1327(a) states clearly: “The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan and whether or not such creditor has objected to, has accepted, or has rejected the plan.”1 “[B]ind” means “to put under . . . legal restraint, or contract . . . to be obligatory.”2 Section 1327(a) is a strong statement: The terms of a confirmed plan are legal obligations of the debtor and all creditors without regard to whether the plan provides for the creditor’s claim and without regard to whether the creditor participated in the confirmation process.3


The confirmation order defines the rights of creditors against the debtor and the debtor’s property, displacing prepetition contracts, court orders, state law and the “equities” of prepetition events.4 For example, a creditor with a contract right to receive $200 per month for the installment purchase of a car is bound by confirmation to accept what the plan proposes to pay for the car without regard to the prepetition contract.5 Unsecured claim holders are entitled to nothing more (or less) than what the plan provides in full satisfaction of all prepetition rights to payment from the debtor.

Here again we are talking about adding non standard provisions to a plan that will outline who gets paid and what. So maybe the question to ask is not how will it help, but how can it fail under applicable bankruptcy law when the unsecured claimant has no prepetition right to payment in the first place because of the SOL?

[flashoflight]

This didn't happen in my case, but if a creditor never received notice of the (Chapter 13) bankruptcy and did not participate in a distribution, this has usually been treated as a non-discharged debt. That is, the debt survives and so does the ability to collect. However, there are varying issues with the statute of limitation on whether or not the debt collection was tolled. At least that it was I learned on the topic in my own case.

It happened to me. I asked my lawyer this question because I missed a debt and didn't notice until it was too late. The non-noticed debt is not discharged and the SOL is tolled for the entire duration of the 13 bankruptcy. But in practical terms, it's unlikely the creditor or its successor will ever figure out that the SOL is tolled.

[flashoflight]

Here again we are talking about adding non standard provisions to a plan that will outline who gets paid and what. So maybe the question to ask is not how will it help, but how can it fail under applicable bankruptcy law when the unsecured claimant has no prepetition right to payment in the first place because of the SOL?

What does your lawyer think of all this and how likely this is going to slide through? He knows your trustee better than we do. How about the probability of the judge going along with this?

[justbroke]

Here again we are talking about adding non standard provisions to a plan that will outline who gets paid and what. So maybe the question to ask is not how will it help, but how can it fail under applicable bankruptcy law when the unsecured claimant has no prepetition right to payment in the first place because of the SOL?

In responding to the underlined portion, what removed the unsecured creditor's pre-petition right to payment? It wasn't the statute of limitations since the SOL only bars prosecution of the claim through the court. That's why I was asking... and I was playing a little devil's advocate.

What Des wrote about the 9th Circuit is pretty interesting. I wonder had the creditor not opposed the objection their claim, the claim would have just been disallowed (not paid) and summarily discharged upon entry of the discharge order. I wonder if the attorney would have pursued fees for a no-hearing objection to a claim?

In the end, the debtor wants the debt discharged, but not paid. The issue in the case that Des presented was that the debtor was able to object to the claim, have it "disallowed." The problem came when the creditor opposed the objection... causing more fees. The debtor's attorney was able to recover their fees under State non-bankruptcy law. I think the debtor rightfully asserted that the SOL had run and LLNV was barred from any process to collect.

In the end, the debtor's attorney wanted to be compensated. That attorney found that, under Arizona law, the fees could be recovered despite not generally being recoverable in the bankruptcy court.

[womanonfire]

What does your lawyer think of all this and how likely this is going to slide through? He knows your trustee better than we do. How about the probability of the judge going along with this?

I have not asked him yet. I am gathering all the information I have, references to cases and such. We have to go over schedules again and amend plan so will be when I approach him with it.

[womanonfire]

In responding to the underlined portion, what removed the unsecured creditor's pre-petition right to payment? It wasn't the statute of limitations since the SOL only bars prosecution of the claim through the court. That's why I was asking... and I was playing a little devil's advocate.

What Des wrote about the 9th Circuit is pretty interesting. I wonder had the creditor not opposed the objection their claim, the claim would have just been disallowed (not paid) and summarily discharged upon entry of the discharge order. I wonder if the attorney would have pursued fees for a no-hearing objection to a claim?

In the end, the debtor wants the debt discharged, but not paid. The issue in the case that Des presented was that the debtor was able to object to the claim, have it "disallowed." The problem came when the creditor opposed the objection... causing more fees. The debtor's attorney was able to recover their fees under State non-bankruptcy law. I think the debtor rightfully asserted that the SOL had run and LLNV was barred from any process to collect.

In the end, the debtor's attorney wanted to be compensated. That attorney found that, under Arizona law, the fees could be recovered despite not generally being recoverable in the bankruptcy court.

You devil you!

If there is no enforceable legal right, there would be no prepetition right in this context otherwise I would have to list them on my schedules as a creditor?

I don't know, you guys are smarter than I am with all this. I know I may come across as a pain but this back and forth is how I come to grasp things better. Some things bounce off my brain a few times before they sink in and some thing just keep on bouncing and never sink in at all!

After all that reading on the Nevada case, I didn't catch that the creditor argued against the objection to the claim, I thought that the creditor filed the claim and the fees were incurred on the objection to the filing, not on response to the objection to the claim! Bottom feeder butthole face!

[womanonfire]

In the end, the debtor's attorney wanted to be compensated. That attorney found that, under Arizona law, the fees could be recovered despite not generally being recoverable in the bankruptcy court.

But then the circuit court reversed the award correct?

[justbroke]

If there is no enforceable legal right, there would be no prepetition right in this context otherwise I would have to list them on my schedules as a creditor?

An unenforceable contract doesn't mean the contract is invalid. It's still a contract. You just can't use process (the courts) to enforce the contract. I think that's the distinction that is missing.

I don't know, you guys are smarter than I am with all this.

Not me. Just stimulating conversation and you are not bothering any of us. We like discussing things to see different angles and perspectives. Just as Des came in and showed the Arizona case that was different.

After all that reading on the Nevada case, I didn't catch that the creditor argued against the objection to the claim, I thought that the creditor filed the claim and the fees were incurred on the objection to the filing, not on response to the objection to the claim! Bottom feeder butthole face!

If you look at the case, the objection was sustained to LVNV's claims. The claims were also disallowed (as they should be). The fees accumulated because LVNV filed an answer (opposition) to the debtors objection, which caused at least 2 hearings. LVNV also didn't withdraw their claims (take an action to show that they were not trying to recover). The award of fees was all about LVNV's objections which caused extra work for the debtor's attorney.

But then the circuit court reversed the award correct?

The BAP reversed because the appellate panel found that the award of fees was a punishment. I think Des used it as a reference to show that even though the debtor's attorney tried to bet paid for their services to disallow the claim (and object to it), they ended up getting reversed on appeal.

So the question is still... why would anyone waste their time arguing over a time-barred debt if the attorney is not going to be paid for their time?

[flashoflight]

So the question is still... why would anyone waste their time arguing over a time-barred debt if the attorney is not going to be paid for their time?

Agreed. This kind of stuff is not included in the no look fee. You have to pay your lawyer in advance and everyone eats their own attorney's fees win or lose. I found it very hard to fund my lawyer for extra work during the first year of my 13. The $4500 or whatever you paid for the 13 isn't an all-you-can-eat buffet. I didn't pay $16k to my BK lawyer as a tip for the buffet. I had to pay for things not included in the no look.

[despritfreya]

So the question is still... why would anyone waste their time arguing over a time-barred debt if the attorney is not going to be paid for their time?

The Nevada ruling only means that the fees are not paid by the creditor. The attorney can still be paid if the fee agreement with the client provides for such payment and the bankruptcy court approves his/her fee application.

As I indicated, we bill hourly. The fees for litigating would be paid through the Plan. Plan duration and/or payment amount would increase. This is why we do a cost/benefit analysis - how much more in fees is the client going to pay vs. how much the creditor's claim is.

If, in a 100% Plan, my legal fees for a contested objection to a POC will total $4,000.00 and the creditors claim (which may or may not be disallowed) is $4,000.00 there is no benefit to the client. The client would just be substituting one creditor (the POC creditor) for another (me) to be paid through the Plan. If, however, the cost of disallowing the claim were minimal, then it is worth objecting as there would be a net savings to the client. We always look for what monetarily benefits the client the most.

Des.

[womanonfire]

Well I just got off the phone with my attorney and he is friends with the BK attorney in the Nevada case. We're filing an objection, didn't discuss putting it into a plan but boy would I like to see how that would play out. I would really like to see these debt collectors uninvited to the party in a way that just settles the matter with minimal costs to the debtor. It's spiteful what they do. Do they torture small animals when they are not filing frivolous claims in BK courts?

Anyhoo, the purpose of the call was to go over the Trustees objections and make sure we were in order so discussing LVNV's claim was a side item. He is not worried too much about interest being charged or me having to pay more than my DMI either (brought up in another post) so I feel better about that, for now....