[WSBARP] Off Topic Referral - Creditor representation in bankruptcy

[Kary Krismer]

We don't know the facts, or even the plan language, or whether the plan 
is confirmed.  Assuming the Act didn't change the law in this area (I 
don't remember), it would be perfectly acceptable to bifurcate 
non-residential property debt into secured and unsecured portions, or 
even treat it as completely unsecured if say there's a prior encumbrance 
that exceeds the value of the property.

Jeff raises another issue though.  In the event that an improperly 
proposed plan was confirmed the creditor might be out of luck (I don't 
remember the law on that).  I would think though the trustee would 
possibly object if the property were residential property.

Kary L. Krismer
John L. Scott, Inc.
206 723-2148

On 12/4/2019 3:21 PM, Jeff Davis wrote:
>
> Kary raises an important point.  Where are they at in the plan 
> confirmation process?  The creditor needs to review the plan and the 
> basis for the proposed treatment of the DOT.  It is odd to simply have 
> it avoided, it is not like a judgment lien.  I have crammed down on 
> DOT secured debt that is underwater, but we don’t know the facts.
>
> Jeff
>
> *From:*wsbarp-bounces at lists.wsbarppt.com 
> <wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Kary Krismer
> *Sent:* Wednesday, December 4, 2019 1:30 PM
> *To:* wsbarp at lists.wsbarppt.com
> *Subject:* Re: [WSBARP] Off Topic Referral - Creditor representation 
> in bankruptcy
>
> I haven't practiced in over 12 years, and not at all under the current 
> Act, but for property that is not the debtor's residence I don't see 
> why they couldn't deal with both the secured and unsecured claim of a 
> deed of trust in a Chapter 13 plan.  If the mortgagee didn't object I 
> think they may be out of luck
>
> Kary L. Krismer
> John L. Scott, Inc.
> 206 723-2148
>
> On 12/4/2019 12:21 PM, Doug Owens wrote:
>
>     Dear Greg, I believe that is nonsense.  A deed of trust cannot be
>     “avoided” or eliminated through bankruptcy.  Perhaps your clients
>     should attend the creditors’ meeting and talk to the trustee.  I
>     hope this is helpful.  Yours truly, Doug Owens
>
>
>
>         On Dec 4, 2019, at 12:03 PM, Gregory L. Gilday
>         <cole-gilday at stanwoodlaw.net
>         <mailto:cole-gilday at stanwoodlaw.net>> wrote:
>
>         I have some clients who are the beneficiaries on a DOT on a
>         property where the owners/borrowers are currently in Chapter
>         13.  They list my clients in the Plan under the "Non-standard
>         Provisions" section, and state the the DOT will be avoided and
>         the claim will be paid as a general unsecured claim. 
>         Obviously, my clients are not happy with that portion of the
>         Plan, and they are looking for someone to help them through
>         this process.
>
>         Any referrals would be appreciated and passed on to the clients.
>
>         Thank you all,
>
>         --
>
>         PLEASE NOTE THAT OUR OFFICE WILL BE CLOSED FROM DECEMBER 21,
>         2019 UNTIL JANUARY 2, 2020. HAVE A VERY MERRY CHRISTMAS AND A
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>
>         Gregory L. Gilday
>
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