Second Mortgage Proof of Claim

[justbaby]

Okay I'm beyond confused....my plan was confirmed about 2 weeks ago. Just checked PACER and my second mortgage company filed a secure proof of claim. How can they do that? Or CAN they do that? I was told that they had like 28 days to respond after the filing to be able to object to the stripping? But they didn't respond until 2 weeks after the confirmation...

What will happen to this debt?

[Pandora]

justbaby,

We asked the very same question / concern you did. According to our lawyer, its correct in the way they filed - the 2nd is secured until discharge (if you're stripping it) - then it will be discharged with the rest of claims upon plan completion. Apparently it has to say "secured" because in reality, it is (by the lien), but will get paid as an unsecured creditor in the plan.

What I'd want to know is how your 2nd was able to get a claim in after confirmation? Am I reading that correctly as you wrote it? ETA: (going to assume your strip was approved by the trustee...either by motion or AP)

[justbaby]

Well according to the Form B9I (the form that gave me the time and dates of my 341 hearing and confirmation hearing), it says that the deadline to file a proof of claim for all creditors is 12/13/10 and the deadline to file a complaint to determine dischargeability is 11/15/10. It doesn't look like they entered a complaint but just a proof of claim. So my assumption is they are still allowed to file proof of claims even after confirmation? My trustee didn't mentiion the stripping at all...so that's why we knew it wasn't an issue.

[justbaby]

And my confirmation hearing was a month after my 341 hearing. And it was on 10/14

[Pandora]

Well according to the Form B9I (the form that gave me the time and dates of my 341 hearing and confirmation hearing), it says that the deadline to file a proof of claim for all creditors is 12/13/10 and the deadline to file a complaint to determine dischargeability is 11/15/10. It doesn't look like they entered a complaint but just a proof of claim. So my assumption is they are still allowed to file proof of claims even after confirmation? My trustee didn't mentiion the stripping at all...so that's why we knew it wasn't an issue.

Yeah, ours was the same way (different dates like yours above) but I guess that had something to do with the AP we filed for stripping the 2nd, but I'm not sure. Maybe they get 2 different dates given its 2 separate entities even though it goes with the org. BK filing. ?? Our proof of claims / complaints / etc had to be in something like 5-6 months after we org. filed (filed 3/10) and all were in by the end of July if I remember correctly, however we werent confirmed until after our AP was closed officially for the strip. Guess its been a month or so now since our confirmation.

I thought it was odd when I saw our 2nd coming in as secured yet considered unsecured since we were stripping it and it was approved - but lawyer said it was correct, so I guess I have to trust him.

[justbaby]

I guess my next question would be does everyone that does a 2nd stripping have to do an AP? We didn't...I pray it was done correctly.

[LadyInTheRed]

I guess my next question would be does everyone that does a 2nd stripping have to do an AP? We didn't...I pray it was done correctly.

Techinically, I think a petition to strip is always an AP. But, it doesn't always require a hearing. In some districts, like mine, you file a petition to strip the 2nd and give notice to the mortgage holder. If nobody objects, the court signs an order that the 2nd will be paid as an unsecured debt and lien will be removed upon discharge. If the creditor objects you have a hearing. So, if you haven't seen an order, ask your attorney or check Pacer.

Creditors have until 60 days after the first scheduled 341 meeting to file proofs of claim. My 2nd mortgage was the first creditor to file and filed as as secured well before the 341. Pacer still shows it as a secured claim, but the trustee's office changed it to unsecured on the Chap 13 Data Center after the judge signed the strip order.

[despritfreya]

I guess my next question would be does everyone that does a 2nd stripping have to do an AP? We didn't...I pray it was done correctly.

No. Some jurisdictions allow the strip by the less formal Motion practice. Also, if the language of the Chapter 13 Plan was specific enough to put the lender properly on notice as to the strip, and the lender failed to object, thus allowing the entry of an Order Confirming which contains the strip language, under the USSC case of Espinoza, the lender will be bound by the terms of the Plan and the Order Confirming the Plan.

Des.