State is now threatening to file Lien AFTER notification!

[montana59451]

WE had a continued 341 meeting yesterday and the State Representative was present for an UNSECURED Priority Debt. Today I received in the mail a notice of Penalty Lien from the State saying that if this is not paid by 5/3/2010 then they will file a lien. It is NOT from the State Rep who was there.

The state was notified and listed in our schedules as an unsecured priority debt on 3/1/10 and are on the Certificate of Mailing from the BK Court.

Is this not a violation of the AS? How should I handle this? We filed pro se and our 341 meeting was concluded yesterday. WE delt with this issue at the 341, but I think that one hand doesn't know what the other one is doing.

Advice on how to proceed?

[montana59451]

Should I say nothing and see what they do? If they do try and place the lien (i.e. make an unsecured priority debt a secured priority) then have the Judge sanction the State?

[biotechsolution]

you won't get sanctions because you would have to show actual damages caused by the lien.

But the lien can easily be withdrawn by just sending you bk filing to the court where they file it. because 'the liens are viod by by bankruptcy law'

[justbroke]

You need to find out who their legal counsel is. You need to draft a letter indicating that you are under the prote ction of the automatic stay. List all your case information. Demand that within 5 days of the date on the letter that they write back indicating that they are NOT taking any such action and that the understand that the stay is in place. If they don't, you actually need to follow up for an order to show cause. You can still ask for sanctions.

Sanctions can be "actual" damages. If you have to take time off work to attend court so that you can stop them from violating the stay, that's "actual" damage. (I say, even if you take vacation time!)

So what is this "State" money you owe? Is this for personal income taxes?

[montana59451]

We had an LLC which was dissolved in 11/09. It has nothing to do with State income taxes. We owed $32000 for penalties, interest and late fees for using an independent contractor who later claimed to be an employee (which he was not) because when we demanded that he produce an IC exemption he couldn't so we let him go. We only used him for about 4-5 months BUT the state Workman's comp dept decided that for 3 prior years we owed them for not having workman's comp (but that's another story).

Anyway at the 341 and continued 341 meeting a state rep was present because we listed this as an unsecured priority claim (which it is) this was an issue (the only real issue) that was discussed. The very same day we had the continued 341 (Apr. 19) this Workman's Comp dept. sent us this letter. I almost laughed when I got the letter with the demand for payment and the threat of a lien because it was obvious that one hand had no idea what the other was doing! We filed pro se so I think that someone thinks that maybe we are totally ignorant of the law and they can collect by scaring us into paying!

We are a Ch 7 no asset case so what is even the point in trying to make an unsecured priority debt a secured priority debt at this late date?

[justbroke]

Sometimes governmental units are difficult to deal with because they don't understand the process. Unfortunately, you, as the Debtor, has to deal with it. I agree with you that it's unsecured and your personal responsibility should be discharged.

[montana59451]

Well the state did file the liens on June 10 (which was waaay after filing) and I again sent into our local court the bankruptcy notice to the Clerk of Court who said that she filed the bankruptcy notices with the liens.

Now the state put in Proof of Claims and included copies of the liens with it. It was my understanding that they could not file the liens after they were notified of the bankruptcy.

By them filing the proof of claim does that mean that these will be discharged? If they are discharged can I get the liens removed?

These were non secured claims which they turned into secured claims after the fact. They are only for penalties, interest and late fees.

Can they do this or do I need to make the Judge aware of their shenanagins?

[HMT]

This is interesting. My gut reaction would be to let the trustee's office know what the state is doing. Did they file to have the A.S. lifted and you just never saw it?

[coak1875]

Hello Guys,

I have some questions, I am consider filing Chapter 7 but want to keep my house? While it is terribly underwater, I don't want to move my kids up and down, especially have a child with a learning disability. See stats

1st mort - $314K
2nd Mort 60K
value $143K
1st mort. current
2nd mort 781 days past due
Spoke to 2nd mort today - they said that if i commit to 3- payments of $200 p/m for the next 3 months they would look at modifications -
Other Debt of aprox 40 - 60K
a)If i file do you think I would get to keep the house?
b) Should i affirm both 1st and 2nd mort?
c) should i start the work out with the 2 mort. prior to my filing?
Any suggestions or comments would help trying to decide before my meeting on Monday with legal helpers.

[montana59451]

HMT

No, no filing to lift the stay. Checked Pacer and there is nothing to lift a stay except on a rental property which we were surrendering anyway. We would have been notified if the state wanted the stay lifted because they would have had to make a motion and we would have had an opportunity to object. State is just doing whatever they feel like.

The state BK rep was actually present at our 341 and the continued 341, but raised no objections or anything else.

The lien filing was done by another department (who was also notified) and they are just doing whatever!!!!!

[montana59451]

Any other thoughts?

[Pandora]

Hello Guys,

I have some questions, I am consider filing Chapter 7 but want to keep my house? While it is terribly underwater, I don't want to move my kids up and down, especially have a child with a learning disability. See stats

1st mort - $314K
2nd Mort 60K
value $143K
1st mort. current
2nd mort 781 days past due
Spoke to 2nd mort today - they said that if i commit to 3- payments of $200 p/m for the next 3 months they would look at modifications -
Other Debt of aprox 40 - 60K
a)If i file do you think I would get to keep the house?
b) Should i affirm both 1st and 2nd mort?
c) should i start the work out with the 2 mort. prior to my filing?
Any suggestions or comments would help trying to decide before my meeting on Monday with legal helpers.

I would not trust what they are telling you. A modification can be done without all that "if you pay..we'll consider it" crap. They're just trying to get you to pay something towards it - its a scare tactic. No - do not pay the 2nd mortgage anything (or at least I wouldnt...)

Pay your 1st mortgage over your 2nd - the 2nd will just sit there and do nothing more than likely given what is owed on the 1st. Chances are very slim the 2nd will even attempt to foreclose, but chances are very high they will use high pressure tactics to get any and all amount of money out of you (as in this case).

Question is - with a house that is -171K, why would you reaffirm? If you qualify for a Ch. 7 and can retain and pay without reaffirming,... I'd do that instead, so long as you can afford the payment. Have you talked to the 1st mortgage about doing a loan modification at all?

[montana59451]

coak1857 your question has nothing to do with this thread. Please start a new thread

[Pandora]

Montana...

mea culpa mea culpa Re: cloak1857



as to your post, what did your attorney say as to this situation? (Never mind, saw you filed pro-se). Brain..work...today... ugh. :/

[justbroke]

Can they do this or do I need to make the Judge aware of their shenanagins?

Again, they can't legally do this, but nothing stops them from doing it. Since you didn't file through an attorney, they are taking advantage of you. If I were you, I'd call around and see if any attorney will take this on contingency as a stay violation. They have willfully and egregiously violated the automatic stay since they had actual notification.

The real problem is that, procedurally and legally, you do not know what to do or how to handle a stay violation. Just filing the bankruptcy notice with the local court does nothing. The Clerk did exactly what they were supposed to do, and that's just file them in the docket.

I would be on the phone tomorrow to a few attorneys. If you can't get one to take it on contingency, and make sure you ask if they will, then you will, unfortunately, need to get up to speed on filing an Adversary Proceeding (complaint), or you need to hire an attorney at your cost.