why would a creditor not file?

[georgiagin]

One of my husband's biggest creditors...a LARGE 2nd mortgage company hasn't filed on his Chapter 13...He's been in the plan now for 21 out of 36 months. Why would they NOT have filed? Can they come after the money after the bankruptcy has been discharged?

thanks!

gina

[SinkingFast]

Were you in arrears with them when you filed?

If there were arrears, are they being paid in the plan payments?

Have you continued to keep your payments current with them outside of the Ch 13?

You need to provide more info.

[georgiagin]

they were listed as an unsecured on the filing...yes, was behind back then...no havn't kept up payments with them since filed bankruptcy.

[StaciMM]

I'm guessing they were listed as unsecured because the first mortgage was more than the house was worth? Does the plan have anything being paid to other unsecured creditors?

[SinkingFast]

What State are you in??

Most States the primary or 1st Mortgage takes presidence.

How can a 2nd mortgage be considered unsecured?? Wasn't it secured as a lien against the Deed??

[georgiagin]

the house was foreclosed on...the 2nd mortgage then left being owed....but what we're wondering is why this 2nd mortgage company wouldn't file a claim? why would any company NOT file a claim to be paid in the bankruptcy...Yes, we're paying unsecured companies.

[SinkingFast]

Now I understand. The primary Mortgage Lender Foreclosed and took the house. That leaves the 2nd Mortgage Lender flapping in the breeze, so to speak. And that's how that Lender became unsecured.

It's up to each individual Creditor to contact the Court to get paid out of a Ch 13 plan. Once your plan is discharged, your duty and obligation to paying Creditors listed in the BK is completed. If a named Creditor does not file a claim for payment during the Ch 13 plan, when the 13 plan is discharged, the Creditor is SOL about getting paid. That's my understanding, and if I'm wrong, hopefully someone will chime in and correct that.

Just outa curiosity. Did you get the 2nd based on a hugely inflated refi appraisal?? Performed by the 2nd Mortgage Lender themselves or a representative of the 2nd Mortgage Lender company?? If that's the case, that may be why the Lender isn't filing a claim to get paid. Over inflating appraisal values to lend money is an "Unfair Lending Practice". Maybe they'd rather take a hit on the dollars you owe than get caught up in a bigger legal problem.

[georgiagin]

my husband said that wasn't the case...shrugs...i dont know...we just can't figure out why that Mortgage company would not file on $40,000 worth of debt. And wondering if they can come in anytime during the life of the bk and file?

[Jman30]

I had several large credit card creditors that did not file at all and I was completely surprised. Then again, I had some small little debts around $100 or so that DID file a claim. LOL

I don't know what makes one party claim and one not claim. But if they don't claim, that is their loss. They can try to make a claim after the deadline, but they have to file a seperate request to do so that must be approved by the Trustee and they need to provide an explanation as to why they didn't file other than "we forgot."

[SinkingFast]

Duh!

I just had a thought!

When all this New Law BK stuff came out, I remember reading that Lender's are required to retain a certain % of funds on hand as back up for defaults. With big lenders like CountryWide, CitiGroup, Chase, BOA, and such, that's millions of dollars in reserve due to the total amount of loans they have extended.

Maybe your lender, if it's a bigger company, figures its just easier (translate cost effective) to write off your loan and move on than deal with teenie tiny little amounts dribbling in over a period of years. The loss is tax deductible. The cost to continually post the payments could be more than they would get in actual payment.

A large, multi national company I worked for years ago figured the cost to process a work order or a purchase order. One of those "Efficiency Studies" big companies love to do. In 1982, it cost that company $25/work order or purchase order just to process the paperwork. That was employee time (pay and benefits), and the cost of printing the paperwork. For the multi-copy form to be written up, passed around for appropriate signatures, and approved to perform the work or make the purchase. Then the distribution for each department to get their copy, a copy to be sent to accounting, and for accounting to record the cost transfer, department to department, or pay for the item purchased.

Whereas, like Jman said about the $100 claims, smaller Creditors simply can't afford to loose even that small amount of debt.

It's a thought. Maybe right. Maybe not. Dunno.

[georgiagin]

that certainly sounds plausible. Funny thing is that it's a MAJOR portion of our/his bankruptcy. If they dont claim, we close out the bk about 4-5 months early with all the unsecured debt paid at 100% rather than the 18% put forth by the plan. AND...if our income tax returns get forced to the bankruptcy automatically...that will cut it down to only 11 months left!