Cramdown Inaccurate Proof of Claim - Anyone ever sued?

[rdknipp]

There are certain car creditors that everytime we cramdown vehicles in a Chp 13, submit their proof of claim with the claim amount as the market value of the claim. The bankruptcy code makes it improper to file a fraudulent proof of claim.

My office has sent these creditors certified letters on multiple occasions to quit this practice. Some of these big creditors don't care and are clearly just taking the claim amount and stating on their sworn statement (POC) that is what they believe the market value of the claim.

This requires us to object to their proof of claim everytime. Also, I'm concerned about under median pro se debtors or debtors with poor counsel who don't know to review and object to the proof of claims. The POC will get paid and a 36 month plan extended without it. Anyone tried? Opinion on success? Some companies like Citifinancial Auto, can easily show pattern and practice.

[despritfreya]

I personally have not had an issue with this. In my disctrict, regardless of the amount the creditor claims as "secured", in a cramdown situation, if the creditor fails to object to the Plan it is bound by the Plan. No need to object to the POC as the Trustee will pay based upon the Order Confirming. This approach, I believe, has now been ratified by the Espinoza decision.

Des.

[rdknipp]

In our district the POC controls until the plan is confirmed. Which obviously forces an objection to the POC on over median cases to keep them from having any length issues. Without the objection there will be a motion to deny confirmation from the trustee's office - so the issue has to be resolved.

My concern is with the below median cases (setup as 36 months) as their plans will often be confirmed - later realizing that a 36 month plan is running much longer due to the higher POC coming in from the car creditors. It is just lazy work from the car creditors who don't spend the five minutes to value the vehicle properly.

[angles]

Why would the financial institutions or their employees play by the rules and act with integrity now? They have not done so in the past.

I do agree with your post regarding filers who, under poor representation, agree to make payments on an item because they don’t know any better. I think the pro-se filers are the more intelligent bunch and react in a very conservative way or willfully file with the utmost of integrity to avoid any challenges and to make the process as smooth as possible.