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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I have filed chapter 11. My confirmation hearing is in 2 weeks.

Customer Question

I have filed chapter 11. My confirmation hearing is in 2 weeks. I own 4 properties and we negotiated interest rates of 4 and 5 percent about 18 months ago. Since then interest rates have dropped dramatically, and I have been getting calls from the actual loan holders offering me terms of 2 percent.

This is REALLY frustrating because I have paid a ton of money to attys and people are calling me out of the blue offering 1/2 the rates that my atty has negotiated. I have also talked to several people who have been able to get 2 percent loans with the same banks, B of A/Countrywide that I am dealing with. I am pretty sure that the people calling me are legit that they are actually representing the true investor not the loan serviceor

My atty says that we will need to call in experts, etc, to get the lower rates and that it will take another 6 months and $ 50,000 to get lower interest rates.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 6 years ago.

Thank you for your question. I am happy to assist you.

I am a lawyer with 25 years experience. While I am permitted to provide you with legal information, I am prohibited by and various state bar associations from giving legal advice, representing you or entering into an attorney-client relationship through this open and nonconfidential forum.

I am confused why your attorney believes it will take 6 months and $50,000 to get lower interest rates. Please explain.
Customer: replied 6 years ago.

This is what he sent me

If you are talking about changing the treatment of all of the creditors, this is what I think would happen if we tried to do that.

First, as we discussed, we would have to get an expert witness to testify to what the current market rates are for similar loans in this region or in the country. The Judge will not allow any testimony from you about what other deals are available, because of the hearsay rule. He also will not allow us to show him documents from other sources about other deals, also because of the hearsay rule. The hearsay rule states that one person can’t testify as to what another person said. There are exceptions, but not to this situation.

We would have to amend the plan to change the treatment of the secured creditors, and disclose to them our expert witness. Then they could schedule a deposition of the expert witness, conduct other discovery, and eventually we would have a trial on confirmation of the plan. Colonial would almost certainly fight any changes to their treatment, and so would Bank of America. They would also argue that we are bound by the previous settlements, and can’t change it now. There is no guarantee which way the judge would rule on that issue.

I think this whole thing would be about a $50,000.00 legal fee project. If that’s what you want to do, we can discuss going forward on that basis.
Expert:  Ellen replied 6 years ago.

I agree that if it is your intention to change the treatment of the creditors and submit a new plan, it could potentially be $50,000 legal fee and 6 months as he has stated. That said, if you dismissed your chapter 11 you would then be able to refinance at 2% without court involvement
Customer: replied 6 years ago.
"That said, if you dismissed your chapter 11 you would then be able to refinance at 2% without court involvement"

Is this based upon your experience or my statement that the loan holders have called me?
Expert:  Ellen replied 6 years ago.

It is my experience that once a Chapter 11 is dismissed that the bankruptcy court is no longer involved. However I am going by your statement that you can obtain new financing at 2%
Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
Have you settled any cases recently? Do you have any experiences recently and what interest rates have you settled ?

Expert:  Ellen replied 6 years ago.

Every loan and every case is different. However before you dismiss your chapter 11 bankruptcy you may want to have written loan commitments