LVNV Funding filed a claim for debt that was charged off 20 years ago

[womanonfire]

I can say this about non-standard provisions, at least here in Florida. They cause a lot of extra work and usually the Chapter 13 Trustee objects to many things. For example, in my district they don't let you add a "non-standard" provision if it's obvious or already covered by the law. My 2008 plan was actually one that was used as an example when the model plan was designed in my district. All the attorneys here would add a provision such as "all on-time payments made to the Trustee are to be considered an on-time payment to the secured creditors..." That was deemed "obvious" so it is no longer a standard provision.

I do like your out-of-the-box thinking. Maybe the Trustee will not blink when they see it. Our plans have a checkbox if the plan is non-standard and when that's checked, the plan gets a lot closer look.

Thank you! I was reading another case and I can't remember which one but what happens if an unsecured creditor is not listed on the schedules at all and as such, the distribution would not include payment because there would not be enough to pay it anyway? I forgot what section deals with this specifically, how even if a claim is "deemed allowed" it's get paid in a 100% plan that doesn't provide for it anyway?

So what if the claim does not get discharged? They would have to wait five years to sue me and I would still have the valid defense of SOL. I mean if we can simply ignore the debt outside of bankruptcy and they can't legally collect, why can't we just ignore them in bankruptcy?

[despritfreya]

womanonfire

The BAP decision (penned by Judge Gan - one of my judges) only dealt with that portion of the lower court ruling on the award of attorney's fees. In general, fees are not permitted in bankruptcy unless there is a specific statute/contract that allows them. See the 2007 seminal USSC case of Travelers Casualty & Surety Co. v. Pacific Gas & Electric Co.

justbroke

We routinely put non-standard provisions in our Plans typically because of the unique nature of our cases (more in line with Chapter 11 but client is below debt limits so 13 works better). The trustees and judges are use to this so they give us some latitude. Those provisions usually invite an objection by the affected creditor which ends up in a contested confirmation process, which, most of the time, ends up with a settlement between the parties.

Des.

[justbroke]

I can say this about non-standard provisions, at least here in Florida. They cause a lot of extra work and usually the Chapter 13 Trustee objects to many things. For example, in my district they don't let you add a "non-standard" provision if it's obvious or already covered by the law. My 2008 plan was actually one that was used as an example when the model plan was designed in my district. All the attorneys here would add a provision such as "all on-time payments made to the Trustee are to be considered an on-time payment to the secured creditors..." That was deemed "obvious" so it is no longer a standard provision.

I do like your out-of-the-box thinking. Maybe the Trustee will not blink when they see it. Our plans have a checkbox if the plan is non-standard and when that's checked, the plan gets a lot closer look.

[womanonfire]

womanonfire

I just took a look at the Nevada bk court decision. Do you have a PACER account? If not, get one. Viewing an Order of the court does not cost anything.

Go to the US Bankruptcy Court, District of Nevada. Query case number 17-15277. Go to Docket Report and scroll down to docket number 113. I believe these Debtors had similar (if not identical) facts to you.

If there was a way to attach a .pdf document to this post I would attach the Order for you, but I do not think an attachment of a .pdf file is possible.

Des.

Thank you and thank justbroke for uploading it. I do have a pacer account. This is great but the first link that you posted looks like the fee award was reversed. See the date? Am I looking at this wrong?

https://casetext.com/case/lvnv-funding-llc-v-andrade-garcia-in-re-garcia

I know that plans are standard but you can write specific things into it under non standard provisions and once confirmed, I believe the plan rules. I do not see why writing this language into the plan itself would not work. Maybe instead of writing that "all claims filed that are non enforceable under state law that are deemed allowed under this plan will receive zero distribution."

Here is an example of using non standard provisions and the plan specifically stating "The chapter 13 trustee shall not disburse on a secured claim that is not provided for in this plan." https://www.govinfo.gov/content/pkg/...bk-03607-0.pdf

flashoflight the claim is over 4k.

[despritfreya]

does this mean that, as in many cases, they combine the State non-bankruptcy law should it have teeth to deal with this issue? (Specifically Nevada's fee shifting statute(s)?)

In general, property rights ("property" is broadly defined) are determined under State law.

Des.

[shipo]

Wow, good stuff and a very interesting read; thanks despritfreya and justbroke for looking it up and posting it!

[justbroke]

I uploaded it to this message.

despritfreya does this mean that, as in many cases, they combine the State non-bankruptcy law should it have teeth to deal with this issue? (Specifically Nevada's fee shifting statute(s)?)

Kudos to the attorney(s) that saw that through to the end.

[despritfreya]

womanonfire

I just took a look at the Nevada bk court decision. Do you have a PACER account? If not, get one. Viewing an Order of the court does not cost anything.

Go to the US Bankruptcy Court, District of Nevada. Query case number 17-15277. Go to Docket Report and scroll down to docket number 113. I believe these Debtors had similar (if not identical) facts to you.

If there was a way to attach a .pdf document to this post I would attach the Order for you, but I do not think an attachment of a .pdf file is possible.

Des.

[flashoflight]

I had a POC that wasn't mine rather than a time barred POC, but I'm in a 1% plan. The claim was so small at 1% that it didn't reach the minimum payout amount that the trustee would be willing to cut a check so they didn't even get a dividend. It wasn't worth anybody's trouble to deal with it.

I also agree with JB that you have to be careful about incurring legal fees. You can't pick a fight on everything. Since I am a debtor who has paid $16k to his lawyer and profited far more than that, I think I have something to say about which fights are worth it. First, you need a slush fund for the upfront retainer while in a tight chapter 13 budget especially during year one. Lawyers don't work for free. I know lawyers are ticked about accepting just $4k-$6k no look and their hourly goes down as debtors demand more work rather than ghost themselves. A 1% plan doesn't give me much room for additional pro-rata for the lawyer fees and some legal fees cannot be put in the plan. So I tend to pick fights that I'm certain I will win and payout much higher than the retainer like my adversary case and avoid time wasting money losers like the junk fees on my mortgage. Being in a 100% plan means you pay the legal fees unlike those who have a 1%-99% plan who can sometimes make PRA, Midland, and Calvary pay the legal fees by slashing their dividend.

[justbroke]

I don't think one could just write such a condition in the plan. Most districts use a model plan which doesn't have any such language. The language that is in all Chapter 13 Plans is that the Trustee will pay "allowed" claims. Since you're in a 100% plan, it may be worth a conversation with your attorney if, and only if, this creditor represents a significant amount of money.

The proper way to get deal with an unsecured claim that is invalid, is to object to it. But, as Des writes, are you willing to pay your attorney $$$ to object to the claim. The issue is likely that being in a 100% plan means there's no money to move around. You see, in a less than 100% claim, the Trustee can just take the money in the pro rata pool and pay the attorney as an administrative claim. When you're in a 100% plan (or a 0% plan for that matter), though, the luxury doesn't exist.

(I don't think sanctions would work since it is not against the bankruptcy code for a creditor that is barred under State non-bankruptcy law from filing suit, to file a claim in a bankruptcy. That is what I learned from my specific case with my creditor.)

[womanonfire]

Des was speaking to your attorney caring about increased fees, to object, and not being able to recover the fee from the creditor. At least that's true in the 9th circuit.

Yeah I will just have to ask my attorney because I do not know what else to do. I looked up an objection with motion for sanctions to cover the fee under Fed. R. Bankr. P. 9011.

I think what Chapter 13 attorneys might do is actually have it written in the plan that no proofs of claims submitted that are time barred under state law will get any distribution at all whether or not objected to or not. Not sure if it needs to defined as some sort of equitable relief from time barred debt and the expenses incurred in objecting them but if this works, it could be standard in plans going forward?

We do have to file an amendment to plan so....

[justbroke]

I am in a 100% plan which is why I care.

Des was speaking to your attorney caring about increased fees, to object, and not being able to recover the fee from the creditor. At least that's true in the 9th circuit.

[womanonfire]

They would get paid. The thing is... who cares if you're not in a 100% plan? (I think that is what despritfreya was trying to convey.) They do have a right to payment. The bankruptcy will definitely remove that right (discharge the personal responsibility to pay).

I think the theory is this: in a (substantially) less than 100% plan, the time-barred creditor would get pennies anyhow. In my 0% Chapter 13, the creditors would get nothing, so it's not worth the time to fight over nothing. If there are 109(e) debt limit issues or you're in a (close to) 100% plan, then that could be worth fighting.

But, alas, your attorney isn't going to be happy when they can't recover any fees from the time-barred creditor. That's what that 9th Circuit opinion seems to indicate. That may not be the law of the land, but it is persuasive.

I am in a 100% plan which is why I care.

[justbroke]

They would get paid. The thing is... who cares if you're not in a 100% plan? (I think that is what despritfreya was trying to convey.) They do have a right to payment. The bankruptcy will definitely remove that right (discharge the personal responsibility to pay).

I think the theory is this: in a (substantially) less than 100% plan, the time-barred creditor would get pennies anyhow. In my 0% Chapter 13, the creditors would get nothing, so it's not worth the time to fight over nothing. If there are 109(e) debt limit issues or you're in a (close to) 100% plan, then that could be worth fighting.

But, alas, your attorney isn't going to be happy when they can't recover any fees from the time-barred creditor. That's what that 9th Circuit opinion seems to indicate. That may not be the law of the land, but it is persuasive.

[womanonfire]

Ok I am still not understanding how they would not get paid in a 100% plan without and objection or other motion. Isn't this what they are hoping for, no objection so they can sneak in?

I guess we should wait until all claims in and file omnibus objection because if it is common, there are likely to be more.

Edited to add that after reading LVNV Funding, LLC v. Andrade-Garcia (In re Garcia), that the Trustee could object but why should they in my case since they are working for the creditors? Oh and they hate debtors over here in my state, have I mentioned that before?