Lien on property listed in bankruptcy?

[Pizza]

Still can't get in contact with the idiot attorney's office. Looks like he's done with me and leaving me to figure this out on my own. He never even turned in the certificate for the debtor's education course after receiving it 3 weeks ago, I had to do it myself.

Anyway, so in my digging and Googling, I found Texas law on who is entitled to a mechanical/contractor lien:

Sec. 53.021. PERSONS ENTITLED TO LIEN. (a) A person has a lien if:

(1) the person labors, specially fabricates material, or furnishes labor or materials for construction or repair in this state of:

(A) a house, building, or improvement;

(B) a levee or embankment to be erected for the reclamation of overflow land along a river or creek; or

(C) a railroad; and

(2) the person labors, specially fabricates the material, or furnishes the labor or materials under or by virtue of a contract with the owner or the owner's agent, trustee, receiver, contractor, or subcontractor.

(b) A person who specially fabricates material has a lien even if the material is not delivered.

(c) An architect, engineer, or surveyor who prepares a plan or plat under or by virtue of a written contract with the owner or the owner's agent, trustee, or receiver in connection with the actual or proposed design, construction, or repair of improvements on real property or the location of the boundaries of real property has a lien on the property.

(d) A person who provides labor, plant material, or other supplies for the installation of landscaping for a house, building, or improvement, including the construction of a retention pond, retaining wall, berm, irrigation system, fountain, or other similar installation, under or by virtue of a written contract with the owner or the owner's agent, contractor, subcontractor, trustee, or receiver has a lien on the property.

(e) A person who performs labor as part of, or who furnishes labor or materials for, the demolition of a structure on real property under or by virtue of a written contract with the owner of the property or the owner's agent, trustee, receiver, contractor, or subcontractor has a lien on the property.

So it sounds as if a finance company like Wells Fargo is not entitled to a mechanical lien against a house because they were not the company who supplied the labor and materials - THAT company (Window World) was paid point-of-sale the second the contract was in place.

So would the finance company only be able to secure interest in the "collateralized" property that it wouldn't want anyway? And wouldn't there be a record of such a security agreement someplace that I could look up (if one even exists)?

The Creditor Must Have a Valid Security Interest in the Property: that means that the security interest must have been created in compliance with all state laws. In order to enforce a security interest, the creditor must not only enter a binding loan contract creating the security interest but also file, or record, the security interest with the state in order to retain a priority interest in the secured property.

· You Must be in Default on the Loan or Fail to Pay the Accelerated Loan: your loan document explains when you are in default on the loan and when the creditor may demand that you pay the remainder of the loan. If you have been making your regular payments on time then you are likely not in default on the loan and the creditor probably does not have the right to repossess your property.

· You Must be Given Notice and the Right to Cure: most states require creditors to provide notice to debtors prior to repossessing property. The notice usually contains the legal authority the creditor has to repossess the property. It also provides debtors with a certain amount of time to pay the loan and any outstanding fees or penalties. If the debtor pays his or her obligations within that time then the creditor loses the right to repossess the property. However, if the debtor does not pay his or her obligations by the date contained in the letter then the creditor has the legal right to repossess the property.

· The Creditor May Not Disturb the Peace: a creditor has the right to repossess property, without a court order, but only if it can be done without breaching the peace. That means that the creditor may not force entry to your home, intimidate you, or do anything unlawful to obtain custody of the property. For example, if a creditor is repossessing your car then the creditor may take possession of the car that is parked in a parking lot or your driveway but may not break into a locked garage to get the car. If the car, of other property, is out of reach and the debtor refuses entry then the creditor would need to seek assistance of the court to obtain the property.

In default, yes. Right to secured property, maybe. But a reaffirmation agreement doesn't sound like a proper "Notice and the Right to Cure". And there's no possible way I can think of to remove the windows without forcing entry or disturbing the peace.

I have until September 20 to make the first payment or face.... whatever the consequences are. I'm considering disregarding the agreement.

[Pizza]

Also... the debt has been in default for a few months and went to collections. Never until after the 341 meeting had Wells Fargo sent any notice about the windows themselves. Since the debt was listed, if it becomes discharged with no AP, doesn't that wipe out the creditor's opportunity to create a new lien post-BK?

[tobee43]

if it were me and i was leaving, i would say come and get them! i'm certain the division of WF would just LOVE the fact that their other division makes the house unlivable and that they would have to most likely spend thousands to replace them.

i would consider windows as not just "fixtures" but an actually a physical part of the house itself. it would cause the house to be unsecured and easily robbed, inviting trouble and destruction to the inside leaving out the fully exposed not just to thief's but also to the elements. ok, you didn't pay for the front door or even roof, so we are going to come and rip it out. i don't know about this one.

[jst4f]

I would ignore WF and not reaffirm anything. Taking the windows is in effect evicting you and no judge is going to allow them to do that. This is in addition to the other arguments made here. I think it is a bluff and I would call it.

[tobee43]

I would ignore WF and not reaffirm anything. Taking the windows is in effect evicting you and no judge is going to allow them to do that. This is in addition to the other arguments made here. I think it is a bluff and I would call it.

i'll second that!

[Pizza]

Days gone by, still can't get in contact with the attorney - they aren't returning (or answering) my phone calls or my e-mails, even after about a month. Friday is our BK discharge date. The reaff. agreement lists "NO" as to the non-dischargability of the debt (no complain of abuse IOW).

I can rather comfortably shrug off the possibility of anyone seeking a writ to forceably remove them. It doesn't sound like a legal course of action.

The problem that remains is that Wells Fargo is the holder of both the mortgage note and the 'secured' windows - meaning that I fear that they are somehow able to tie the two together and lien/foreclose on our house, which we are current on payments and slightly negative on equity. None of my googling around has bridged that gap. I may be worrying too much but the comfort of a conversation with the attorney is still non-existent.

[Pizza]

Got an answer from the attorney, finally.

If the agreement had a PMSI in the terms & conditions (I've torn the place apart looking and can't find the agreement), then they (Wells Fargo) may have a security interest in the windows IF such a record were properly filed with the UCC.

But,
1) They cannot lien the house after the discharge. They missed the boat by not taking any legal remedies prior to filing the petition.
2) They cannot repossess the windows because they are affixed to the property.

So what the bank has is an unenforceable security agreement AND the debt once discharged cannot be sought for collection.

[AngelinaCat]

That is GOOD news then. Congratulations. After the discharge, you can send them a C&D letter. Or is that something the attorney would do for you?

[Pizza]

I'm not sure how that would work, since technically they have a valid security interest in the property - but the ability to repossess it died upon installation. Basically, if I had ordered a bunch of windows and stored them in the garage, they could come get them. But once affixed to the house, they have no legal recourse.