A secured debt puzzlement.

[tigergem]

Here is the ONE complication in my chapter 13. What do you make of this?

Original creditor and actual (perfected title) lien holder has gone belly up, which I actually JUST found out tonight. I am going to call the FDIC in the morning and see if there is any kind of receivership for them or someone that is supposed to receive notices, since they were a bank....

Now, apparently the bank - the original creditor - liquidated their assets so they must have sold or transferred the debt to this other company which utterly refuses to communicate with me, because I am not the primary account holder.

My ex-husband was the primary account holder. I was the co-signer. But after the divorce, I was supposed to be paying this debt... but the company refused to deal me with me AT ALL... not by phone, not in response to certified mail, which I sent them at least once every single year since my divorce because I was supposed to be paying this debt.... I even tried to roust them out by sending a request to validate debt they were reporting on my credit report... NO RESPONSE!!! (I suppose I could have sued them for FCRA violations but I am not that ambitious and my local small claims court won't take those kind of cases.)

Finally this year, they sent me mail threatening me (and my ex-husband at my address!) with a lawsuit. When I wrote back and requested validation of the debt in response to this threat of lawsuit, guess what??? NO RESPONSE!

This stupid circus has been going on for FOUR YEARS.

This second company has never perfected the lien. And so far they have not submitted any proof of claim. Of course, they have a while yet to do this, but wouldn't you think they would be right on this???

I guess my question is... if the original creditor and lien holder of record no longer exists and the second company never perfected the lien and (let's just say hypothetically...for the sake of fun)... if they don't submit adequate proof of claim...(which I strongly suspect they don't have...) What happens to my secured thingy? What happens to the debt?

Other than this... everything's cool and everything's smooth...

I'm one month ahead on my plan payments and my 341 seemed to go off without too much of a hitch. It is showing concluded on PACER anyway.

[justbroke]

If you're up for it, you could file a Motion to Determine Secured Status. Please note, that in some Districts, this is done by complaint (Adversary Proceeding/AP). You basically ask the court to determine whether it is secured! This will put the creditor in the position to prove that they have standing as the holder of the note and can enforce the terms of the mortgage under State non-bankruptcy law!

This is actually something that the court is good and useful at!

However, I may be inclined to wait on the claim and file any motion to determine secured status, at a later date. At least if you file a complaint (to determine secured status), you can use subpoena power to get documents! However, now you're getting into litigation and Fed. Rules of Evidence, and other procedural areas that actually scare me.

[tigergem]

Proofs of Claims due by 4/6/2010. Last day to oppose dischargeability is 3/8/2010. I guess I have a while to wait to see what they do, if anything. But my Motion for Valuation 21 day suspense is 01/12. And so far (knock on wood) nothing is filed by them objecting to this Motion. (It's not a mortgage by the way.)

Maybe they got sleepy when they saw that Motion to Dismiss by the trustee and never bothered to check back and see that it was withdrawn... lol... (one can hope, right?)

[tigergem]

I found your useful document sample by the way... http://www.bkforum.com/blog.php?bt=178

It came up when I googled Motion to Determine Secured Status. You're famous! Pretty cool huh?

[justbroke]

I shall remain anonymous... LOL.

[HHM]

A few issues

1. A secured creditor does not need to submit a proof of claim. Proof Claims are only for those creditors who wish to get paid from your plan's dividend.
2. You are confusing 2 separate legal issues; (1) lien perfection and (2) right to enforce an assigned contract. This 2nd company does not need to prefect the lien. That has already been done by the original deed of trust or mortgage that is filed at your county recorders office. The issue here is this companies right to enforce that lien. Basically, they need to prove they have the right to collect.

Thus, if you really want to get this sorted out, you need to go on offense and File a Motion to Determine Secured Status. Otherwise, this headache will continue; the secured creditor doesn't really need to do anything in your chapter 13. The other option (more risky) is to stop making payments and force them to file a Motion for Relief From Stay in your chapter 13, and then challenge their standing.

[tigergem]

Risky? I stopped making payments FOUR YEARS AGO because they wouldn't communicate with me where to send payments to! Do I want to get this sorted out? OH YES I want to get this sorted out. I am sick to death of this limbo. That is ONE reason I have filed Chapter 13! To force SOMEBODY to take payments for this stupid thing. I don't know if the contract was assigned. We can logically assume that it was, but this second institution doesn't even seem to have proof of THAT. I have asked for it many times. It's NOT a mortgage and there is no deed of trust filed with my county recorder's office to fall back on. I should be so lucky, but no. This is not a mortgage.

[tigergem]

Ah look at this... the 2nd company filed their proof of claim with assignment documentation this morning!

[HHM]

Interesting. I guess I should have clarified, secured creditors are not "required" to file POC's, but they often will.

Your next step would probably be to object to the proof of claim if they have a ton of piled up fees and expenses.

[tigergem]

Right. They have. And I am on it.

[justbroke]

Good luck!

[tigergem]

Thanks. This finance company or whatever they are... I dunno WHAT they are... there is something nefarious about their refusal to respond to my phone calls and certified mail for four years, refuse to provide me with any way to pay this for four years... but all of a sudden they have it? And they have tacked on over $30k in fees. lol. This should be interesting.

[HHM]

Good luck, stick it to them.

Tactically, you will first want to attack their standing. Do they have the right to enforce the claim (produce the note, etc etc). Second, then you would attack all the fees and penalties by telling your story of the problems you have had and hopefully you have kept some of the correspondence and return receipts.

Best wishes, please let us know how it goes.

[justbroke]

I agree with HHM. You may be able to just file an Objection to the claim itself, and make the challenges, enumerating them as standing, assignment, etc. Make sure all the assignments are there and are in order (dated correctly too!). Beware of "general" assignments, as they do these blanket assignments that seem to have no traceability.

[tigergem]

I am the queen of NO DELETE. If I wrote something and backed it up... I have it. I built this computer last year, and I have files on it dating back to 2002. Only a couple short instances of hard drive failure as exceptions, and nothing critical was lost there, because I use a separate hard drive for data files. Also when I send certified mail, I use either onlinecertifiedmail.com or clicktomail. So extra copies are available online as well. I love it.

I have attached a copy of the Limited Power of Attorney they are submitting as the basis of their claim. The original financing contract was in there as well, but is not included here.

.....oops maybe not. Exceeds forum quota by 401.2 KB. I need to make this file smaller and try that again.....

I posted it as an attachment into my blog.

http://www.bkforum.com/blog.php?b=274

Does the verbage of this "servicing agreement" constitute tranfer of ownership of the loan (to me...it seems to... for all practical purposes), or is this "servicing agreement" void because the entities that assigned it to SST no longer exist?

Here is the link about that discussion: http://www.bkforum.com/showthread.php?t=50487 Both AIB and AIF are defunct and the FDIC is not the least bit interested in this matter. I called and asked.