If I can file proof of claim (to make me a creditor) and file the adversary (and prevail which I am sure we would) what type of creditor would that make me? Secured, unsecured, priority?
Unsecured unless your name is XXXXX XXXXX title.
I ask this because I have made $11,400 in payments on the trailer which will be repossessed by his lender and this constitues breach of contract (although breach of contract was evident once we found out he had lien on the trailer). I have contracts with him on the truck and trailer which my guess is that the trustee did not want to keep. The loss of this trailer will cost me and my company a great deal of loss of revenue (and basically I will have no other choice other than to file a chapter 13 myself since this IS my income)
The fraud of the debtor is the basis of your adversary action. It does not change your claim from unsecured to secured.
But I don't really see if this does me any good. I do not know how many other creditors he has or what he owes other than almost $400,000 worth of equipment that he sublet with liens on them. He has given everything back to the lenders except for this truck which was paid off in March, 09 and then the title was transfered 3 times and finally back to him and his sister in law (which were illegal transfers). I do believe however that this truck in question is the only asset in the estate therefore the only thing that could be sold to satisfy any debt. Since I need to purchase this truck and will be making an offer (which my atty says he believes the trustee will accept) would being a creditor be worthwhile. I am sure that I would win the adversary.
It might be worthwhile to file the adversary. Your advantage in prevailing in the adversary is that you will have a judgment and thus be owed money even after the bankruptcy. Most if not all of the other creditors claims will be discharged. You can collect on the judgment at such time that the debtor goes back to work and starts to accumulate new assets.
My atty in MI is going to present our offer for the truck which he has taken into the estate (we already have a deposit in his trust account for this), but according to him, the trustee could order the truck be put into storage and taken off the road until the decision is made on the sale, but he does not think that will happen (given my luck right now I would not want to make a bet!). This truck and trailer is our job; i.e. my income and economy.
I agree with your attorney. If you are adequately insuring the vehicle it is unlikely that the trustee would require it be put into storage.
And then there is the matter of $1050 paid to the attorney representing us in this proceeding....any recourse on that in the adversary?
You may be able to have the attorney fees assessed against the debtor. However be prepared for significantly more fees for the adversary.
I am assuming that I will need to pay him more as he has already been to court twice (341 meetings) so the total may be more. I really feel sorry for the other guys that had contracts with him who did not find out about this and will have their trucks and trailers repossessed on them.
All the stays on equipment have been lifted as of 8/6/09 and the lender for the trailer will not be back into his office until the 12th. We are going to try and work a deal with them, however, I don't think my credit will be good enough for them (Wells Fargo).
WF likely does not want the trailer back. They may thus be more lenient with their credit requirements.
Also, my atty in MI thinks that the trustee may have handed this case over to the US Bankruptcy Trustee for fraud (he left out a lot of stuff, income etc including my contracts with him and he tried to hide the truck we have). Does that help me at all?
No. It could actually hurt you. The result may be that the debtor's discharge is denied. This would mean that none of his debts would be discharged. You would then be one among many creditors after the bankruptcy.
I will check back later in the day.