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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9775
Experience:  Licensed to Practice Law
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Im sitting in utter shock. I am writing my complaint to be

Customer Question

I'm sitting in utter shock. I am writing my complaint to be filed on Monday for "Deadline to File a Complaint to determine the dischargability, which is also the court appointed deadline to do so. My debt was listed as unsecured, but I am entitled by law to be able to point facts supporting it's secured. (WHICH I HAVE DONE).

As I check the clerk of courts to verify info and dates, I see that the Debtor has taken out a Mortgage against the very property my debt is secured by (although not listed as a lien).

How is it possible that a person seeking Chapter 7 on 3/7/09 can take a loan out on 5/19/09 and still not have waited for court appointed deadlines and an actual order from the Bankruptcy Judge approving or denying the voluntary petition.

This says to me she's just committed fraud, and for ME ... I've just been denied due process as a creditor.

PLEASE give me some insight.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 5 years ago.

Hello and thank you for allowing me the opportunity to assist you.

I’m sorry to say that the mortgage is likely lawful. If a lender is willing to provide credit to the debtor, it may do so even if the debtor just filed for bankruptcy protection. Of course, that debt won’t be discharged, and the lien will probably even come after unsecured debtors to the extent that the property could be lawfully sold to repay such debtors.

Your lien’s priority could have been protected by filing a lis pendens, which serves the purpose of notifying the general public of your interest in the property. Therefore, any subsequent mortgages or other encumbrances would come after your claim if you prevail in your lawsuit to establish your lien.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

If the information that I provided was helpful, then please remember to click the green accept button so that I will receive credit and compensation for my time. Positive feedback is always appreciated as well. Thank you and good luck!

.

DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

 

Customer: replied 5 years ago.

Thank you very much for your response. It doesn't, however, help. I believe too that it is up to the individual creditor as to what their risk level is.

 

What I was looking for is more along the lines that it does not seem right that DURING the Voluntary Petition, especially, in a chapter 7 (THE CRY/PLEA for HELP) that at the very moment the Debtor is begging to have all their debt wiped away, THAT DEBTOR infact is out aquiring more debt BEFORE their chapter 7 has been approved or denied.

Expert:  TJ, Esq. replied 5 years ago.

Hi again.

Question: “What I was looking for is more along the lines that it does not seem right that DURING the Voluntary Petition, especially, in a chapter 7 (THE CRY/PLEA for HELP) that at the very moment the Debtor is begging to have all their debt wiped away, THAT DEBTOR infact is out aquiring more debt BEFORE their chapter 7 has been approved or denied.”

Answer: Well, as you pointed out, that is up to the individual creditor and the risk he’s willing to take. As I pointed out, the debt would not be discharged, so the debtor is not asking for help with regard to that specific debt. And that creditor’s claim to any asset would not take priority over the creditors that existed prior to the debtor acquiring the new debt. However, in your case your lien may not take priority because it was apparently not recorded.

I also understand that my answer is unhelpful to the extent that it does not provide you with a method to get your lien prioritized over the new mortgage. Sometimes we have to give customers bad news. Trust me, I really wish I could honestly tell you something good. Perhaps you should consult with an attorney in person since he’ll be able to review all the facts in this case. He may find something relevant that I am unaware of and that you didn’t realize was important enough to share with me. That’s why my disclaimer specifically states in part: “[…] the limitations of this setting may prevent your legal issues from being thoroughly addressed.” This website is helpful for obtaining general information about the law, but it just can't take the place of an in-person consultation with an attorney who can (1) review all the relevant evidence and (2) spend hours researching for loopholes that may apply based on some specific detail in your particular situation. If you stand to lose a substantial amount of money, then I definitely suggest you see a local attorney.

I truly wish you luck!

Although my answer was unfavorable, please understand that my goal was to provide you with honest information. With that in mind, I hope that you found my answer useful. If so, then please remember to click the green accept button so that I will receive credit and compensation for my time. Positive feedback is always appreciated as well. Thank you and good luck!

.

DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

 

TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9775
Experience: Licensed to Practice Law
TJ, Esq. and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.

Rest assured, that although your answer was not helpful, I do agree that it was fast and accurate. There are special circumstances to this case. It's one for the books. I'm seriously considering offering it as a case study for Law Students.

 

I'm still in disbelief that the Law will allow an individual to claim that they have no assets to pay creditors, especially me (which has a purchase money mortgage) and prior to the deadline of objection AND prior to Judge's Ruling, the law allows the Debtor to apply for more loans. As there is a Stay for Creditors to not seek collections, during the filing of the bankruptcy --- there should be some law that keeps the Debtor party from taking out loans. There should be a time out of somesort. ????

 

Regardless , thanks for the advice and I already left you possitive feedback.

 

Best Wishes! Happy Independence Day. :)

Expert:  TJ, Esq. replied 5 years ago.
I suppose the law doesn't prevent the debtor from obtaining a new loan prior to a Chapter 7 discharge because it really doesn't affect the bankrutpcy. For purposes of a Chapter 7 bankrutpcy, a debtor's assets and liabilities are generally frozen in time on the filing date. Something that occurs after the filing doesn't generally have an impact on the bankruptcy (though there are exceptions).

In a Chapter 13 bankruptcy, the debtor must get permission from the court before acquiring new debt, but that's because the debtor's ability to pay into his Plan can be directly affected by new debts.

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