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Creditor contesting on Chap 13

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    Creditor contesting on Chap 13

    We just signed a few days ago our Chap 13 papers. The bank where our accounts are is one of our largest creditors. They received there papers this morning. My wife went in at lunch to speak with our banker out of respect and let him know what was happening ( we did not realize they had received the paper work so quickly). They had a pleasent discusion keeping friendship and business seperate. The banker stated that they would have to argue the provisions on our cow/farm loan. The loan states as collateral 28 cows, tractor, harrow, water wagon and cow trailer. We have everything but the 28 cows. We only have 4 left from the herd due to deaths, selling for feed and to make bank payments, etc. We have paid approx. $50,000 in interest and $700 on a $51,000 note. It seemed that every year the interest increased and due to drought, market prices, bad timing and added expenses we fell more behind. This along with medical bills and 10 year old zombie debt was sinking us. What options may happen since the bank intends to contest the provisions. Thanks

    #2
    It is unlikely that the bank will contest that the cows are gone. It may argue that the remaining collateral is worth more than you are proposing to pay through the Plan. It is all a negotiation so don't lose sleep over it. Let the process move along.

    You operated a farm. Are you still farming either the land or by way of cattle? If you are still operating as a farm, just out of curiosity, did you look into filing a Chapter 12 instead of a Chapter 13?

    Des.

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      #3
      At this time we are getting out of the cow business until we can start over small without debt. We did look into the chap 12 but we did not fit the profile for it. Just concerned because the bank is getting very little as the plan is stated now. Our lawyer said she worked our plan for our best interest to give us the best fresh start possible. The equipment listed is worth very little ( maybe $2500) as it is really worn out. The 4 cows we are surrendering are worth approx. $3400

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        #4
        Let the attny handle it. You may end up paying a few bucks more but, in the grand scheme of things, it will work out.

        Des.

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