Results 1 to 8 of 8
  1. #1
    Join Date
    Jun 2018
    Posts
    3

    Default Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    My question involves bankruptcy in the state of: New York

    I won a judgement back in 2004. I put a lien on assets at the time. I was unable to collect due to the fact that he had nothing or was able to hide assets well. The person filed for chapter 7 back in 2011. The person that i sued won a settlement. I recently received a call from the trustee. He claims for me to receive a small portion of my settlement, that I will need to change my settlement from secure to unsecure. Unsecure sounds less of a chance that I receive anything. The trustee wants it done asap because he wants to close out the case.

    Is this wise for me to change to unsecure?
    Whats the process for changing to unsecure?

  2. #2
    Join Date
    Mar 2013
    Posts
    16,063

    Default Re: Secure vs Unsecure Settlement in Chapter 7

    I'm sure the trustee will tell you the process.

    How much money?

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,623

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    The question of how much money is involved is an important question, but it would also be important to know why the liens have not or cannot be honored. For example, is it that the lien was improperly asserted, that it was asserted against assets that didn't exist, that the assets were never part of the bankruptcy estate, that the liened assets that are part of the bankruptcy state are exempt assets, or something else?

    If you can recover more money based upon your judgment lien, then it makes sense to attempt to do so; but if the issues are such that you're going to end up with nothing based upon the lien, but will at least recover something if you put yourself in with the unsecured creditors, then something is generally better than nothing.

    We don't have enough facts to work with, so perhaps you should consult a bankruptcy lawyer with the full story.

  4. #4
    Join Date
    Jun 2018
    Posts
    3

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    My settlement was for $5k. the person I sued settlement is $75k.
    The trustee told me to change my settlement to unsecure. He said, as unsecure, there is a small chance that I can receive 1 to 2 thou. Can I trust the trustee. I am not familiar what a trustee is. Is he partial to person filing bankruptcy?
    Thank you for the replies.

  5. #5
    Join Date
    Mar 2013
    Posts
    16,063

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    The trustee works for the court. His duties are as follows:

    https://www.law.cornell.edu/uscode/text/11/704

    Whether releasing your lien would get you money is anybody's guess.

    You haven't seen a nickel of your money in 4 years so what do you have to lose?

  6. #6
    Join Date
    Sep 2010
    Posts
    462

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    You must have filed a secured Proof of Claim. A trustee will not include a secured creditor in the distribution because 11 USC 726 does not include such distribution. If you do not amend the POC to "unsecured" you will not participate in the distribution.

    What is your collateral and why are you not foreclosing on the collateral? In my State (Az) a judgment lien only attaches to real property and typically, such property has no equity over the consensual liens and any allowed homestead exemption so a judgment lien is worthless. Maybe it is the same in NY and the debtor either has no real property or there is no equity in the real property so the lien is worthless.

    Des.

  7. #7
    Join Date
    Jun 2018
    Posts
    3

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    Thank you everyone.
    I will try to change to unsecure.
    I'm not really sure how that's done.
    The trustee said to fill out the form "proof of claim" and state it is an amendment. He said I can even do it online. (www.nyeb.uscourts.gov)
    Filling the "proof of claim" form, checking amend yes box and checking secured no box is all it take to make it unsecure?
    Is it ok to just say it is not secure

  8. #8
    Join Date
    Sep 2010
    Posts
    462

    Default Re: Secure vs Unsecure Debt Settlement in Chapter 7 Bankruptcy

    The Trustee is correct. You can do it on line but make sure you are referencing that you are amending claim number ___. Do not file a new claim. Amend the one you already filed from secured to unsecured status. If you have questions call the clerk of the court.

    Des.

    1. Sponsored Links
       

Similar Threads

  1. Disputing Debts: Requesting a Validation of Debt After a Chapter 7 Bankruptcy
    By Ethereal in forum Debts and Collections
    Replies: 1
    Last Post: 12-11-2017, 10:54 PM
  2. Replies: 7
    Last Post: 01-15-2012, 10:13 AM
  3. Bankruptcy Issues: What to Do: Debt Settlement or Bankruptcy
    By AshamedinDebt in forum Bankruptcy Law
    Replies: 1
    Last Post: 12-14-2008, 12:33 PM
  4. Chapter 13: Son's Personal Injury Settlement and Chapter 13 Bankruptcy, in Ohio
    By motherof3 in forum Bankruptcy Law
    Replies: 3
    Last Post: 09-17-2007, 09:50 AM
  5. Bankruptcy Issues: Debt Settlement or Bankruptcy
    By tims in forum Bankruptcy Law
    Replies: 1
    Last Post: 08-30-2005, 02:57 PM
 
 
Sponsored Links

Legal Help, Information and Resources