What Can I Expect As A Creditor, After Debtor's Chapter 13 Filing

[crazecars]

Background:

I'm in Indiana. In Sept 07 I received a small claims default judgement against a home improvement contractor who failed to finish a job. Amount of judgement is approx $2,000. The debtor continued to ignore my attempts to collect, so I filed proceedings supplemental. Debtor continued to ignore the court and did not appear, so last week the judge ordered a warrant for his arrest for contempt of court/failure to appear to the proceedings supplemental.

Today I received an envelope from the debtor's attorney which includes a copy of his Chapter 13 Plan (marked "original") which is was filed in Dec 2007, a notice of his bankrupcy case, and a blank Proof of Claim form. Deadline to file objection to the plan is in Feb 08, meeting of creditors is later in February 08, deadline to file proof of claim is May 08. His plan lists a $2,700 atty fee, an $8,000 car loan and nothing more. His payment plan is for 3 years in the amount of $16,600.00

Questions:

Why are there no other claims listed in this plan except the one car loan? I presume he owes much more to other people, or there would be no need for a $16,600 bankrupcy plan, right? Is it mostly blank because they are waiting for me and others to come forward and submit official proof of claims?

Do I have any right to file an "objection" to the plan? Should I or does this not really apply to my civil court judgement?

If I attend the meeting of creditors, what can I expect to happen? Pros or cons of attending or not? Should I be taking the stand and speaking to the court or asking questions? Any advice on what to say or not to say, etc.? And will it really matter?

Should I be notifying my local judge about this Chapter 13 plan at this time, and ask them to withdraw the warrant for his arrest that is currently floating out there? I assume I am no longer permitted to pursue him to collect, which is fine...however the warrant is due to his failure to appear to a court ordered civil proceeding, so I don't know if that warrant should stay in place?

I've been going it alone thus far, as for a $2,000 claim I guess I'm more inclined to just let it go than to spend a bunch of money on attorneys, etc. However filling out a form or two and attending to the meeting are perfectly within reason. If that's all it takes I'll go through the motions.

I guess the crux of my questions are: Is this something I can handle on my own without a hired attorney and at least stand a reasonable chance of getting a pro-rata portion of my money back?

Thanks so much for any thoughts or advice on the whole matter. Hopefully I've provided enough detail of the situation to warrant some help. If more info is needed, please just ask...

[AmieRenee1980]

I can give you insight based on what we've seen creditors do, but I have never worked on a case in which our client was a creditor.

Why are there no other claims listed in this plan except the one car loan? I presume he owes much more to other people, or there would be no need for a $16,600 bankrupcy plan, right? Is it mostly blank because they are waiting for me and others to come forward and submit official proof of claims?

Well it sounds like an unsecured debt that he owes you. It is typical to only list the secured, priority and specially classified unsecured debts on the plan. All of the unsecured creditors are not listed out on the plan, but there is somewhere on the plan a paragraph that will say what percentage of the Debtor's unsecured debts he is paying back. If it is 100% you can assume that you will be paid back in full so long as the Debtor does not get dismissed from the Chapter 13. If the percentage is less than 100% then you will be paid back whatever percentage of the debt that the plan allows for.

If it is less than 100%, then whatever is not paid to you through the Ch 13 (example: Debtor is paying 75% of unsecured in Ch 13 leaving 25% unpaid) will be discharged once the Debtor completes his Ch 13 plan which is typically anywhere from 36 - 60 months depending on the plan. The amount of the debt that is discharged cannot be collected from the Debtor after a discharge order is entered.

Do I have any right to file an "objection" to the plan? Should I or does this not really apply to my civil court judgement?

Every creditor has the right to object to the plan, but it is not something you would want to do on your own. You would want to hire an attorney who could review the plan and all of the schedules filed in the case and determine if there is a basis for an objection the plan. Your objection would likely be overruled if it is solely based on you not being satisfied with the amount you will receive. I have seen many unsecured creditors file their own "Objection to the Confirmation of the Plan" and there was no basis for it other than they thought the plan was "unfair" and these objections were quickly thrown out at the Confirmation hearing.

If I attend the meeting of creditors, what can I expect to happen? Pros or cons of attending or not? Should I be taking the stand and speaking to the court or asking questions? Any advice on what to say or not to say, etc.? And will it really matter?

Well at a typical meeting of creditors Debtors are called to the stand according to the docket, so when the Debtor you have the judgment against was called the Trustee would normally begin asking the Debtor questions, and at some point would ask if there are any creditors in this case present who wish to be heard. You do not have to speak, but if you have something to say you can say it. Much like objecting to confirmation though you should make sure that there is a basis for what you say. Example, don't just stand up and say you're unhappy with the fact that the guy filed bankruptcy. I believe you can ask questions of the Debtor, but again make sure they are relevant and have a reason for asking them. It really would be a good idea to hire an attorney if you want to be heard at the 341 or Confirmation, you have a much better chance of getting what you want with an attorney who can find valid reasons for your objections.

Should I be notifying my local judge about this Chapter 13 plan at this time, and ask them to withdraw the warrant for his arrest that is currently floating out there? I assume I am no longer permitted to pursue him to collect, which is fine...however the warrant is due to his failure to appear to a court ordered civil proceeding, so I don't know if that warrant should stay in place?

I've never dealt with criminal law so don't want to try to answer this, but, I can tell you that Bankruptcy does not stop any criminal proceedings, example: someone causes a car accident, gets sued by the other guys insurance company and also has criminal charges pressed against him for dui at the time of the accident. He could file Bankruptcy to take care of the insurance co. lawsuit, but would still be faced with the dui charges and any court fines associated with it. This is something else hiring an attorney could help you address.

I've been going it alone thus far, as for a $2,000 claim I guess I'm more inclined to just let it go than to spend a bunch of money on attorneys, etc. However filling out a form or two and attending to the meeting are perfectly within reason. If that's all it takes I'll go through the motions.

In my personal opinion based on the apparant nature of the debt, and the amount of the debt, it would probably cost you just as much to have an attorney represent you in the case, and there's an extremely good chance the outcome would be the same whether you hire an attorney or not. If it were me I would not be pleased about it, but I would go ahead and submit my proof of claim and wait to get paid like the rest of the unsecured creditors. Better than getting nothing, at least he didn't go Ch 7. Make sure you submit your proof of claim before the deadline and fill it out correctly. Also FYI you do not have to attend the Meeting of Creditors. It is optional.

I guess the crux of my questions are: Is this something I can handle on my own without a hired attorney and at least stand a reasonable chance of getting a pro-rata portion of my money back?

In my opinion, yes this is something you can handle on your own, and yes as long as the Debtor is paying back a percentage of the unsecured debt and as long as he stays in the Ch 13 and completes the plan you stand a good chance of getting some of your money out of him. Be prepared to wait though because unsecured creditors are typically last to be paid, so in theory it could be a year or two, maybe three before you start getting paid by the Trustee.

I'm sure these aren't the answers you hoped for, but I am trying to be as helpful as possible considering I've always worked for the Debtors =) Average unsecured creditor in our cases simply filed their proof of claim and sat back and waited. If the Debtor ever gets dismissed you can proceed with collection on that judgment, so keep a close eye on everything you get in the mail from the Court because you will receive notice of things like motion to dismiss the case, and order dismissing the case. Also if you read everything on that 341 notice and everything that came with it you should see info for creditors including a bit on the Automatic Stay, make sure you read that and abide by it or you could end up getting sued.

Hope some of this helps!

[crazecars]

This info was HUGELY helpful. Your detail is extraordinary and I did not expect such a comprehensive response. Thank you!

I will go to the courthouse for my small claims case tomorrow and give them copies of these Chapter 13 proceedings...clearly I need to notify them, so I guess I'll let the courts tell me whether they feel the arrest warrant needs to be cancelled...they've been pretty helpful to me to-date and I can probably get a good answer from them.

Indeed my debt is unsecured. And absolutely I understand that standing up in court and just expressing my displeasure with what appears to be going on would be a total waste of breath...

There is no mention in the plan of what percentage of unsecured debts he intends to pay. There is a checkbox marked in the "unsecured claims" portion of the plan that says "Pro rata distribution from any remaining funds." But nowhere do I see if the pro-rata distribution is expected to be 10% or 100%, or anywhere in-between. So this portion of intended repayment is still a mystery to me.

Would it be appropriate for me to call the trustee and inquire as to this particular issue? I agree that if the plan is for him to pay me back nearly 100%, I may just sign up and ride it out to see where it goes. But if it's a small percentage, I have other ideas...

Interestingly enough, through some research I feel that I just may have a VERY valid reason to either a.) object to the plan, or b.) file a complaint to determine dischargeability of my particular debt. Not sure which is appropriate for my circumstance.

I understand the most frequent reason a plan is turned down is due to lack of a steady income and inability to garnish wages. This debtor is still, and always has been, self employed. I have very good reason (from other mutual contacts) to believe he has declared various forms of bankrupcy many times in his past, though I am not sure how to substantiate these claims and find the records of such previous proceedings. The very reason he did not finish my job was because he could not find future jobs to get the funds together to pay his subcontractors for my job. I find it hard to understand where and how he is going to be able to come up with a steady $500 per month to satisfy the terms of his repayment plan. And I think he maybe a habitual filer. But anywho...

Even stronger I feel is my opportunity to ask the bankrupcy court to NOT discharge my particular debt in his bankrupcy due to the fact the US Code of collections section 523 Exceptions to discharge: "A discharge under section 727....does not discharge an individual debtor from any debt for (2) for money, property, services, .....to the extent obtained by (a) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial consideration."

I feel this "misrepresentation exception" may apply to my case. The actual course of events basically consisted of: 1. He stated he needed $3,000 to prepay his supplier for fixtures and cabinets in my remodel (he provided me a quote from the supplier to substantiate the exact amount). 2. I gave him a check for $3,000 expressly for this purpose, and I memo'd the check "bathroom fixtures and cabinets." 3. He cashed the check and spent it elsewhere...never giving the money to the fixture/cabinet supplier as he said he would. 4. He finally admitted to me what he did (in an email, which I still have) and after 6 months of trying to get my fixtures paid for, I had to give up and pay for the fixtures myself (again) directly to the supplier, so I could finish the job on my own.

He did this TWICE over the course of my project (before I fully realized what had happened the first time). Both times are clearly documented with cancelled checks, his admission in an email, AND one instance he provided me a signed agreement of how he stated he was intending to use this money (for supplies only).

I had considered filing criminal fraud charges due to this course of events, and I did file complaints through the Indiana Attorney Generals' office. In the end, I won the small claim judgement instead, and the Attorney General ended up closing their investigation as a result of my victory. But the whole reason he owes me money is becuase he FULLY misrepresented why he was asking for and taking my money...which is essentially theft in my mind. AND I can fully document this chain of events in writing. It appears by the letter of the law here, I feel I may have a good chance of this working. Your thoughts?

I guess I'm wondering if this is the type of appropriate info that they might consider from an unrepresented person (me), and whether I might have a remote chance of actually having my particular debt NOT discharged under this particular bankruptcy proceeding, by using the misrepresnentation/fraud argument and giving them copies of all my documentation to prove the misrepresentation/fraud.

As you say, for me to spend $2K on an attorney to get my $2K judgement is a huge waste, and a gamble that I may take a further loss. But for me to represent myself and try to present a good case is free, and maybe I'll still have a net gain of zero...but maybe I'll get my full $2K. Time and patience I have plenty of...

I guess I need to decide on how to gamble...that he'll pay me a substantial portion of my unsecured debt through his Chapter 13 plan, or that I can succeed in asking the court to NOT discharge my particular debt, AND then I can legally continue pursuing him on my own for my money through continuing proceedings supplemental and the resulting arrest warrants/bond collections that may result from his failure to cooperate and appear.

I'm getting very long-winded here, so I'll take a break. But if you have any further input, advice, or experiences in such a matter, I would be eternally grateful. Have any of the clients you've worked with ever been accused of obtaining the money from their creditor under false pretenses? If yes, how did that situation end up?

Thanks so much! Now I can fully understand why people need attorneys to do this stuff as it is COMPLEX, but I'm reasonably well-researched and am pretty good at figuring things out for myself...I'm beginning to think I have nothing to lose and maybe something to gain if I try to tackle this project unrepresented and follow all the rules and procedures to the letter.

[AmieRenee1980]

Well you have definitely done your research and that will help you greatly throughout this process whichever way it goes. The primary reason that I believe you would be better off with an attorney rather than trying to fight this yourself is that the Debtor's attorney is going to be there each step of the way and he/she is going to fight everything you say. And while you are well researched, this attorney has been through years of law school and probably many years now of handling Bankruptcy cases, so he/she is going to know how to challenge your objections and possibly sway the Court's decision in the Debtor's favor. I'll explain more below.

There is no mention in the plan of what percentage of unsecured debts he intends to pay. There is a checkbox marked in the "unsecured claims" portion of the plan that says "Pro rata distribution from any remaining funds." But nowhere do I see if the pro-rata distribution is expected to be 10% or 100%, or anywhere in-between. So this portion of intended repayment is still a mystery to me.

This surprises me, although every district has a different plan format, they all pretty much contain the same basic information. Does it perhaps say anything in the area about a "pot plan" or a particular sum to be distributed amongst unsecured creditors? If you'll tell me which district this case is filed in I can look at the plan format they use.

Would it be appropriate for me to call the trustee and inquire as to this particular issue? I agree that if the plan is for him to pay me back nearly 100%, I may just sign up and ride it out to see where it goes. But if it's a small percentage, I have other ideas...

Yes, it is appropriate for you to call the Trustee's office. They should be able to tell you the percentage of unsecured debt the Debtor's plan proposes to pay back, and they also should be able to tell you when the plan projects that you will begin receiving payments.

I understand the most frequent reason a plan is turned down is due to lack of a steady income and inability to garnish wages. This debtor is still, and always has been, self employed. I have very good reason (from other mutual contacts) to believe he has declared various forms of bankrupcy many times in his past, though I am not sure how to substantiate these claims and find the records of such previous proceedings. The very reason he did not finish my job was because he could not find future jobs to get the funds together to pay his subcontractors for my job. I find it hard to understand where and how he is going to be able to come up with a steady $500 per month to satisfy the terms of his repayment plan. And I think he maybe a habitual filer. But anywho...

I definitely see your point, but I fear that this is not something that would win you an objection to confirmation, UNLESS the Debtor has already failed to begin making payments to the Trustee, in which case the Trustee and Court would most likely dismiss the case at confirmation anyway. The tough thing with self-employed Debtor's is that there is no way to payroll deduct their Trustee payment, and so it's sort of a wait and see type of thing. The challenge that I think you will have with this aspect is that all of the schedules filed in the Debtor's case are going to reflect what is believed to be his current income, and his income for the 6 months prior to filing. His attorney should have obtained some sort of proof of this income whether it is from bank statements, business accounting ledgers, etc. So, for you to challenge what it listed in the Debtor's schedules you would most likely need to have concrete proof that his income is less than the schedules indicate. Sure you can try, but it might not get you anywhere.

Even stronger I feel is my opportunity to ask the bankrupcy court to NOT discharge my particular debt in his bankrupcy due to the fact the US Code of collections section 523 Exceptions to discharge: "A discharge under section 727....does not discharge an individual debtor from any debt for (2) for money, property, services, .....to the extent obtained by (a) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial consideration."

I feel this "misrepresentation exception" may apply to my case. The actual course of events basically consisted of: 1. He stated he needed $3,000 to prepay his supplier for fixtures and cabinets in my remodel (he provided me a quote from the supplier to substantiate the exact amount). 2. I gave him a check for $3,000 expressly for this purpose, and I memo'd the check "bathroom fixtures and cabinets." 3. He cashed the check and spent it elsewhere...never giving the money to the fixture/cabinet supplier as he said he would. 4. He finally admitted to me what he did (in an email, which I still have) and after 6 months of trying to get my fixtures paid for, I had to give up and pay for the fixtures myself (again) directly to the supplier, so I could finish the job on my own.

Considering the documentation that you have, you may have a basis to request that this debt be deemed not dischargeable, however there are a few things I will caution you on. First, even if your debt were deemed not dischargeable by the Court you would still be prevented from collecting on the debt or even contacting the Debtor about the debt during the entire time he is in the Chapter 13, UNLESS you file for relief from the automatic stay. This is something that must be filed in an appropriate format and include certain information, so it would be necessary to have an attorney handle this for you, not only to prepare the motion properly, but also to defend the motion when it comes up at a hearing which it most likely will as I doubt the Debtor's attorney will refrain from fighting the motion. The objection to dischargeability of a debt is more often seen in a Chapter 7 because in a Chapter 13 like I said unless you get relief from stay you are still going to wait the 3-5 years before you can collect on your own, and by then if the Debtor was a 100% plan you will have already been paid the balance of your debt. Of course if it was what we refer to as a "pot" plan then you would have only been paid a portion, and so on discharge of the Bankruptcy you could proceed with collection of the balance if the debt was ruled not dischargeable.

You may have other options when it comes to trying to prove fraud/false pretenses/theft, but like I said I have only worked on the Debtor's side, so I am not familiar with any other options.

As you say, for me to spend $2K on an attorney to get my $2K judgement is a huge waste, and a gamble that I may take a further loss. But for me to represent myself and try to present a good case is free, and maybe I'll still have a net gain of zero...but maybe I'll get my full $2K. Time and patience I have plenty of...

I see your point, and it would take time and patience.. but just to let you know it would cost you out of pocket. An objection to confirmation requires a filing fee, as does a motion for relief from stay. So it is feesible that this could cost you at some point.

I

guess I need to decide on how to gamble...that he'll pay me a substantial portion of my unsecured debt through his Chapter 13 plan, or that I can succeed in asking the court to NOT discharge my particular debt, AND then I can legally continue pursuing him on my own for my money through continuing proceedings supplemental and the resulting arrest warrants/bond collections that may result from his failure to cooperate and appear.

It is entirely your choice as to which road to take on this, but while I understand your desire to fight it because the guy basically ripped you off, I still feel like the best option in your case would be to file the proof of claim and wait to get paid. You would save yourself a lot of frustration and headaches. Alternately though it wouldn't hurt just to consult an attorney and see what he thinks you may have a chance of winning, find out what he would charge, and then make your decision. Before you decide on anything though I would place a quick call to the Trustee's office and find out what the percentage to unsecured creditors is.

I'm getting very long-winded here, so I'll take a break. But if you have any further input, advice, or experiences in such a matter, I would be eternally grateful. Have any of the clients you've worked with ever been accused of obtaining the money from their creditor under false pretenses? If yes, how did that situation end up?

Well, I've had many creditors call our office telling me that they believe it was under false pretenses, and have even seen a few go so far as to file their own "objection" though it was more of a letter and the attorney I worked for quickly knocked those out when the objection was heard because they didn't contain proper information and the basis for their allegation of "false pretenses" didn't apply since the Bankruptcy law basically trumped whatever provision in their contract they were referring to. There was another situation in which a client was employed by a bank, and was accused of using a code to force through a check from a relative of hers that was actually no good, and then turned around and got a certified check from that same bank and sent it back to the relative. Of course since the check was no good the bank was out the money for the certified check once it was cashed. The bank filed an objection to dischargability, but this was a chapter 7, and I believe after extensive filings and hearings the debt was ruled dischargable. I know the attorney I was working for spent a lot of time and money defending that client, and I imagine it cost the bank a pretty penny as well because they had to send their attorney to Court every time we responded to their objections. The only debt that I have seen ruled not dischargable was a debt that exceeded about $750 and was obtained less than 60 days prior to the filing of the case. I believe the only reason the Court ruled in their favor was because the Bankruptcy code clearly provides for the non-dischargability of such debts obtained right before the filing of the Bankruptcy.

Thanks so much! Now I can fully understand why people need attorneys to do this stuff as it is COMPLEX, but I'm reasonably well-researched and am pretty good at figuring things out for myself...I'm beginning to think I have nothing to lose and maybe something to gain if I try to tackle this project unrepresented and follow all the rules and procedures to the letter.

Complex, yes, absolutely. More than anything though it is tough because their are so many different aspects to a Chapter 13, and so many different things that can occur in the case. If you have the time and energy to put into the research, and make sure to format your documents properly and make sure they contain the necessary information, then sure, you can go it on your own, but to be completely honest with you I don't see it working out too well for you. Your chances would be much better with an attorney, but I still don't see it going your way unless the Debtor's attorney doesn't dispute your objections, which I can't imagine. Of course if this guy is a habitual filer then there is probably a good chance his case will be dismissed pretty quickly, and then you can go right ahead and try to collect on your judgment.
BTW, you can check to see how many previous cases he has filed. It is public information, but you may end up paying for the info unless you know every district he may have filed in. Here is a link to a national record of Bankruptcy filings: http://pacer.psc.uscourts.gov/ Here you could see everything under a person's name or SSN, but you have to register and pay a "per page" fee to access the info. If you think they've all been filed in Indiana you can find contact info for the Northern & Southern district Bankruptcy Courts here: http://www.in.gov/judiciary/courts/federal.html

Tough situation, and I wish you the best of luck whichever way you choose to go.

[crazecars]

I did call and speak with his case manager this morning, and she was quite helpful. Explained the pacer system, etc, and I went ahead and logged on to view the entire case. Probably spent $20 obtaining 8 cent pages! But worth every penny if only for the entertainment value...

In my opinion, what I found was STUNNING. This situation is MUCH bigger than I anticipated it to be...

He has $214,000 of unsecured debt listed from more than 20 creditors. His plan stipulates paying $16,000 (minus attorney fees, minus secured debt) to be pro-rata distributed. So it doesn't take the sharpest pencil in the box to figure out how much I stand to receive out of my $2,000 judgement...about 20 to 50 bucks maybe?

Even better: He has filed for Chapter 13 and Chapter 7 bankrupcy SIX times since 1994. He was granted 13 twice, and 7 once. Two of the remaining six attempts were dismissed, or closed by the debtor, immediately following objections from a creditor, which I found to be VERY interesting. One of the previous filings was actually shut down by the Trustee, who did not accept his plan. So he's 50% on his bankrupcy filing attempts, and he clearly is INTIMATELY familiar with the system and how to use and sometimes abuse it.

According to his submission, he has a "job" now for only 3 months, 100% commission, earning $600 per month, and supposedly for a remodelling contractor I can find no current or historical information on (again). He's clearly living off his wife who has a steady job and income of about $70K per year and all of her paystubs and finances are disclosed in there as well, though he is not filing jointly. He is however, apparently using her income as proof he can afford to pay the plan. EVERY asset is naturally in her name, as he is clearly practiced at hiding his assets. And yet somehow this family of five has managed to build themselves a brand new 4 bedroom, 2.5 bath home in an upscale neighborhood near Indianapolis about 18 months ago...it just doesn't add up.

The case manager explained to me that since I am not represented by an attorney, I am welcome to object via a simple business letter and share my documentation. I am going to go ahead and do this. I also recognized MANY of the creditors on the list, and about three of them I happen to know personally! I'm thinking maybe a quick letter brigade and a few phone calls will help prevent him from succeeding in this filing attempt. But not exactly sure what I would gain from that other than helping to make is life a little more misearable than it already is. A few of the other debtors listed are owed $40,000 to $70,000, and almost ALL of them are relatively small local businesses.

My favorite creditor on the long list had a familiar name, and after doing a little research I remembered that it was the name of the Deputy Attorny General for the State of Indiana who helped me when I had filed a complaint on this same person last year!

Based on all of this, I am frankly expecting a fairly substantial amount of action to take place on this particular case, and will certainly spread the word among the fellow debtors who I have a working relationship with, and will encourage all of them to eithe file objections or attend the creditors meetings...for no other reason than to make myself feel better!

It is now clear that I am a VERY small french fry in the big picture here...and likely will never see a penny of my money out of him. BUT, just maybe I can take some action to help prevent him from continuing this never-ending cycle of leaving a path of destruction everywhere he turns...

It just amazes me how some people can live with themselves. I certainly understand that there is a time and place for bankrupcy, and will never hold that against someone...I've known a few people over the years who have had to file, and they had good legitimate reasons and were using the bankruptcy system for it's intended purpose...to help get their lives back under control and on track.

But THIS guy? ABUSING the system, without a doubt. I will lose a great deal of faith in our bankrupcy system if this filing is permitted to go through without some SERIOUS modifications...but that's another topic altogether.

Thanks again SO MUCH for your time and attention. You really did help get me guided in a certain direction, and you've offered me some much desired insight to how the process works.

I have no more questions. I think I have a pretty clear picture of where I need to go, and will attempt first to garner some support from fellow creditors in the area...maybe latch onto their attorneys (I'm sure th larger ones have them) if I feel it is in my interest. But my first phone call will be to that Deputy Attorney General who is listed as a creditor...he may have some significant insight to what's going down here and how to handle the whole situation.

Over and out!

[AmieRenee1980]

Based on his history of being a habitual filer (which I can call him now that you know how many times he has filed), and the fact that 50% of the cases were dismissed, there's a really good chance this one will be too, either because he doesn't make the payments, or because many of his creditors especially the ones owed $40k and up are very likely to have attorneys as you said, and I imagine they'll be filing everything they can to dismiss or modify the plan considering the circumstances you have uncovered.

Sadly there are many who abuse the Bankruptcy system. On a good note the reform that took place in '05' does cut down on some of it by limiting the number of years between not only Ch 7 discharges, but also Ch 13 discharges, and also makes a provision for the automatic stay to lift "automatically" within a certain period of time after a case is filed by a Debtor who had a case dismissed within one year prior. So, the laws are slowly catching up with the abusers, but unfortunately some of the these same laws are making it tough on people who truly need the relief and have bad luck with medical crisis, etc.

Good luck to you!

[crazecars]

Well...here's what I've done. Good or bad I don't know. Feeling as though I have much information of great value, I obtained the addresses of all fellow creditors (20) and their attorneys (9 appear to be represented), and I mailed the same letter to each of them, outlining all the key written evidence and documentation I have uncovered about his long history of what I feel to be fraudulant business dealings. I've invited them to contact me if they feel they want copies of any of this information or if they want me to testify on any of their client's behalf. I also encouraged anyone who has the means to use my information to file criminal charges if they feel they are warranted. I enclosed a copy of the creditors list which I obtained from PACER. Given that this man's creditor list includes the names of the Attorney General deputy prosecuter, a local County Sheriff, and a known-to-be-aggressive local county prosecutor, I think maybe it will inspire some of them to compare notes and turn on some lightbulbs. I know we're getting into criminal stuff here and you have little experience there. This is just an FYI. If I buried myself somehow here, oh well...I still feel I am doing good by my fellow citizens in attempting to keep this man from doing future damage. We'll see if I get any response from any of them. And maybe one of these attorneys will call me to compare my situation with their client's, or likely to offer their services. Then I can decide if it is worthwhile.

Getting back to my small judgement, and under the assumption I will go this alone with respect to his bankruptcy proceeding, I do have another question in regards to what is customary in how to properly proceed:

I have decided I will definitely file my proof of claim, and I want to file 2 objections to the plan: 1.) that it has not been proposed in good faith and 2.) that the debtor will not be able to make all payments under the plan. I do have written proof and documentation as to why I believe both of these objections are valid.

Filing the proof of claim is easy...fill out the form and turn it in to the clerk's office. But here's my main question: Is it appropriate and customary for me to also file the objections with the clerk at the same time I file my proof of claim? If so, how much info do I provide up front? Do I simply STATE my objections and briefly explain the evidence I believe I have that will support them (then wait for a later time...like maybe at the meeting of creditors...to be offered an opportunity to present my evidence), or am I supposed to actually ATTACH all copies of my documentation/evidence to the letter which states my two objections? Also, am I required to send a duplicate of everything I submit to the court to the debtor's attorney...in the interest of full disclosure/proper discovery?

Guess that's more than one question huh? Sorry...but thank you again if you have any thoughts. I'm certainly not holding you to anything and I will not become disappointed if you steer me a little awry...I fully accept the risks. But your insight has been quite valuable to me, and I am just curious as to how and in what order you have seen such things customarily done.

[AmieRenee1980]

Well, to address the first thing you discussed which is the letter that you sent to all of the other creditors in this Debtor's case. I am a little bit concerned about how the Debtor's attorney is going to react to this, every attorney is different, but the attorney that I worked for would have been pretty ticked off by something like this, and it would have made him fight that much harder against any objections in the case if for no other reason than to satisfy his own ego. While I see what you are trying to accomplish, other than possibly latching on to another creditor's attorney, I doubt that this will actually do any good because no matter how much all of the creditors believe the guy is a crook, any objections to the plan still have to be founded on evidence that is pertinent to the Bankruptcy case itself. I could be wrong, and maybe some of these higher profile people you've mentioned have some pull with the local BK Judge, but as a general rule it is not a good idea to mass mail the other creditors in the case with negative info about the Debtor. Be careful with this sort of thing, as I don't know anything about defamation/slander laws, and you don't want to open yourself up to a lawsuit by the very same guy you are trying to collect from.

Now as to your other questions:

Filing the proof of claim is easy...fill out the form and turn it in to the clerk's office. But here's my main question: Is it appropriate and customary for me to also file the objections with the clerk at the same time I file my proof of claim? If so, how much info do I provide up front? Do I simply STATE my objections and briefly explain the evidence I believe I have that will support them (then wait for a later time...like maybe at the meeting of creditors...to be offered an opportunity to present my evidence), or am I supposed to actually ATTACH all copies of my documentation/evidence to the letter which states my two objections?

You do not have to file your objection at the same time as your proof of claim. It is actually pretty common to wait to file your objection to confirmation until after the 341 Meeting of Creditors. There are many reasons for this, but the most common are, 1) Typically at the 341 the Trustee or Trustee's staff attorney will address any feasibility issues with that plan that they see, at that time (i.e. the percentage proposed to benefit unsecured creditors is not in accordance with the various formulas used to compute this percentage), 2) The Debtor could change his mind and dismiss his case voluntarily as he seems to have done before, and 3) The Trustee and/or Judge will also address any issues with case at that time that could ultimately affect the Debtor's ability to receive a discharge in this case (i.e. he has received a discharge within the last 4 years from a Ch 7, or he has received a discharge from a Ch 13 within the last 2 years, etc). It is good to wait until 341 to hear if any of these issues are addressed, because any one of them could already potentially result in either the percentage to unsecured creditors being increased, or the case being dismissed.

When you file your objection (which must be filed within a certain number of days prior to the set confirmation date or your objection will not be heard) you will want to cite both of the reasons you believe the plan should not be confirmed in the same pleading, and you will want to attach any evidence that you refer to in this objection as "exhibits" to the pleading. Again be careful that all of the information you submit is factual and relevant to the Bankruptcy preceding, and not just based on your personal opinion or feelings about this guy. Also be warned that the likely defense to you believing that this guy cannot make the plan payments will be that his wife has signed an affidavit of support agreeing to give him the money to make his payment each month, and there is not much more you can argue if that is the case. Like I said it then becomes a "wait and see" game to see if he makes the payments, but it's ultimately up to the Judge. Once you file your objection, the Court will set a time on the docket for this objection to be heard on the scheduled confirmation date. You should be present at that hearing to defend your objection, or else the Judge will likely rule in favor of the Debtor, whose attorney will be there. I still really, really feel like you are best served by hiring an attorney to do this for you... but I understand your position.

Also, am I required to send a duplicate of everything I submit to the court to the debtor's attorney...in the interest of full disclosure/proper discovery?

Yes, you should send a copy to the Debtor's attorney. On the bottom of your pleading you should put "Copy to:" and then list the attorney's name and address. The Court will also serve the Debtor's attorney, and the Debtor with a copy, but you should still send a copy yourself.


Good luck with all of this, I'd love to know the outcome if you'll keep me updated.

[crazecars]

Thanks again, all good info. Appreciate your info on my questionable mass mailing...I had the slander thing in my mind and feel that I was careful in presenting facts only, not making accusations. Then again, I do understand it was a risk and I appreciate your candid comments. If I screwed up I will obviously face the consequences...that letter is already gone!

With regards to waiting for after the 341 meeting date to file objections, my cover letter from the Court specifically states "Any objection must be served on the attorney for the debtor and the trustee at least 3 business dates prior to the 341 meeting date." I presume this is so they can come to the creditor's meeting prepared for the types of objections they will be facing.

So it seems I need to state my objections in advance of that meeting...and I cannot wait until after that meeting.

In the end here I may just go ahead and file my Proof of Claim, skip the whole objection thing, and simply attend the Creditor's meeting as an observer only with my mouth shut. I am not breezing over your advice to seek and/or hire an attorney...I do hear you loud and clear. I don't want to hang myself completely out to dry (hopefully I didn't already), and I still feel I have little hope of getting any substantial amount of my money back regardless of what the outcome is. Will give it some careful thought, and as this all airs out I'll be sure you keep you updated here.

Thanks again!

[AmieRenee1980]

Hmm, sounds like maybe their local rules specify the timeline for filing objections to confirmation differently than here in AL, was not aware that it was a local thing, but then again I didn't go to law school, so every now and then I find something that I thought happened in ALL BK cases, but in fact only applies in my local district. Good thing you are reading everything you get carefully, and definitely abide by any deadlines you receive in writing. Another good tool, in addition to contacting Trustee with questions about the plan and when you may get paid, you can also call the Court directly and ask questions about deadlines, procedures for filing objections, etc. They can't legally advise you, but can answer those types of questions.