Creditor Objecting to another Creditor's claim

[Lisamlacy]

Summary: Exhusband filed bk on my settlement. Ch 13. Not confirmed yet. He ONLY filed on me (roughly 114k) and one other small debt ($3,000). He also enlisted the support of his mother to file a false creditors claim saying that he owes her roughly $75,000. The sole purpose of him doing this is to dilute the $ he will have to pay to me and redirect some of it back into his own pocket via his mothers plan payment. Today was the hearing for my objection against her claim. The judge moved to have an evidentiary hearing. She does not have documentation for any type of loans and he (debtor and ex) has already sworn under oath that it was only a verbal agreement. It seems to me this would have been a slam dunk on my end. Now, what is interesting is that her lawyer is arguing that I do not have the grounds to object at all. Any thoughts? Advice? Yes, I have a lawyer, just looking for anyone who has ever even heard of such a scenario. My lawyer says it's kind of an oddity and there is not a lot of case law out there about this situation.

[walkthaplank]

Unless mom can produce a canceled check or money order, I have a feeling that her claim will be rejected and with any luck your ex will be getting to spend some quality time with the US Trustees office.

A creditor can object to the plan, I don't know about individual debts, but this case is kind of unique in that it is pretty clear that he is doing this out of spite. Is this a settlement in family court? He may have issues just with that if it is the case. Support orders are generally non-dischargeable in bankruptcy. Settlement of marital assets are usually described as support in family court orders.

[despritfreya]

11 U.S.C. 502(a) states that a claim is allowed unless a “party in interest” objects. This section does talk about one specific class of creditors as being allowed to object - that of a general partner for a partnership that files bk - but I do not read the section as limiting the ability to object to only that type of creditor.

A “party in interest” is anyone that has a pecuniary interest in the outcome of a case. Since a creditor most definitely has such an interest I would assume a creditor has standing to object to another creditor’s claim. Further, the Advisory Committee Notes to Rule 3007, which deals with the filing of objections to claims, refers to the ability of the debtor OR other creditors to file objections.

Unless there is case law to the contrary, I would assume a creditor can object to another creditor’s claim. But, I have not researched cases interpreting Section 502(a) or Rule 3007.

Please keep us posted as this is an interesting issue - at least to me.

Des.

[frogger]

This one stinks and the trustee is going to smell it. You have an oral agreement, no paperwork, family involvement, more family involvement (you), a debt that is not secured, no paperwork trail, etc. Very good bet that the trustee throws this one out.

[Lisamlacy]

The reason that he is able to file against my settlement according to my lawyer is that #1, he is filing chapter 13 (it would not be permissable should he file ch. 7. and #2 On our decree it states a settlement for property division, not alimony. Yes, it was a settlement in family court. There are many other various red flags, ie: extremely undervalued assets, false tax returns etc. My lawyer is guessing that at the next hearing (confirmation) that we will be having an evidentiary hearing from there. We are trying to either get converted to a 7 or kicked out on bad faith. May 24 is the date for the evidentiary hearing regarding his mothers claim. Another interesting thing about that is in ex's deposition he stated the "loan from his mother was for different things than what his mother stated it was for on her paperwork for yesterdays hearing. It's just a nightmare. This court stuff takes so long.

[Lisamlacy]

The trustee has already let us know that they have concerns, what that it, I don't know.... I hope they figure this guy out though. I would like to see them go through his business records, or lack there of, that would tell another story.

[DebtEnder]

Worse case for your ex is he gets dismissed, WITH prejudice and never allowed to refile on these debts again. Lying under oath in a BK filing is BAD BAD ju ju.

[Lisamlacy]

There are numerous lies. But another thing that I know can't be right is, the money his mother is claiming she loaned him was from ill gotten funds. She is saying she loaned it to him 3 weeks before there whole family was taken down in one of the biggest marijuana busts in our county, back in 2003 and also their only source of income. How can somebody file a creditors claim against that? There has got to be something saying that a creditor cannot try to collect on drug money, I mean come on! I have ordered copies of all the documents from that case to show that they all plead guilty to money laundering, raqueteering (sp?) and about ten other drug related charges. I feel like I am grasping for straws here, seems so obvious to me and the courts are taking so long. I'm almost giving up hope on our system....frustrating to say the least