Adversary proceedings vs. Brother for $50K?

[BrokeinMD]

Vulk - Did you ask your brother directly what his intentions were regarding the money you gave him before he filed BK? Did he list you as a creditor in the filing? Did you brother have his 341 yet? That's not really clear to me from what you wrote.

[vulkrypse]

Well I've talked to several attorneys now and all said I have no adversary case. So, I can do a reaffirmation which could be rescinded in 60 days (even after discharge). Or hope the BK falls through and then try to get a lien on the property ASAP. I'm kinda hoping for the latter.

[SweetGeorgia]

All those points you listed would be great arguments in a case to impose an "equitable mortgage," but at this point it's too late. It's unrecorded, and the trustee won't honor unrecorded security interests. And you're brothers, so to the trustee you're an "insider." If your brother HAD signed over an interest in the property, it would be getting investigated right now.

I'm more interested in the liens you said he had. On his own property?

If they're undisclosed, maybe best to leave it that way. Liens on your own property aren't valid, and they look a lot like asset-shielding. Trying to foreclose a lien on your own property in order to short-circuit a mortgage is straight-up fraud. It sounds like something from a "get rich quick in real estate!" scam, and it's a dumb move. If he didn't disclose them, maybe he's come to his senses. Disclosing them now might blow up the BK, but then what? After his other creditors pick him apart, there won't be anything left.

My thinking is that it's better if he keeps the property, because then there is some chance of selling it and repaying you (voluntarily, on his part). You don't have to forgive & forget, but maybe you don't need a court order to get paid, either.

I have these situations in my family. Really close relationships have been ruined over an illegal lien placed by a jerk in-law. On the other hand (and the other side of the family), I don't miss the relatives who used to ask me for money at every family gathering. Every situation is different; do what you think is best.

[Dewey]

Just my opinion from what I've learned.....You're only hope is proving fraud since you're not on the title. Otherwise it's just business gone bad and it will be discharged.

My husband's brother stole my husband's identity to access his credit to get credit. He tried to get $100,000, but Thank God my husband's credit wasn't THAT good. He got a little less than what you're out, though. He kept up on payments for four years then defaulted. Then the bank came after us for a loan we had no idea existed. We filed a police report, got a lawyer, and a Promissory Note Secured by a Deed of Trust. Then they went and filed Chapter 7. We promptly filed an Adversary Proceeding pro se. It wasn't worth paying an attorney and throwing good money after bad after all they'd stolen let alone we knew there was almost no chance of getting anything back. They filed pro se, so I figured it was easily a risk worth taking since we were on equal footing legally. We won the Adversary Proceeding and our debt is non-dischargable because it was fraud. I know they've been denied many employment opportunities due to the finding of fraud in their credit inquiry. Not sure how they thought this was worth it. Let alone what a brother did a brother.

There will never be a relationship again. We've been there done that with these family members EXPECTING you to let such betrayal go just because you're related. Expecting to later depend on such a person in another "tragedy" is ironic. This IS the tragedy and they've proven worse than undependable. If these are your family members, you're better off with enemies.

[vulkrypse]

I doubt I can prove fraud completely, but the judge may reinstate the loan, based on the following proof:

1. I have scores of emails where he consulted me on repairs, strategy, marketing.

2. I have canceled checks where I pitched in money to keep the property afloat during high vacancy.

3. I have canceled checks where I pitched during a lawsuit vs. the seller's estate in probate. The lawsuit wasn't filed with my name inclusive but billing was sent to me and I tried to negotiate the bill for us.

4. I don't want to, but can call in members of the family to testify under oath that he and I were partners in this venture.

5. I can show owner's disbursements sent to me on a monthly basis. They were also sent to him, and he didn't indicate that income on his filing.

So I can ask the judge to reinstate the loan and set up monthly payments. I'd rather not have a lien in place because I get the feeling he'd just foreclose out of spite.

[helpmeout]

You won't win an adversary proceeding. You would have to prove fraud, and it can't just be you said he said. Even if there was a 3rd & a 4th lien on the property, there was nothing stopping you from putting another lien on the property.

[vulkrypse]

I'm perfectly willing to forgive once I've tried all avenues of recovering the money. Lets not forget, he jacked me without warning. He seems to have omitted income that wasn't filed on the paperwork, and lied to me about liens on the property (saying he had a 3rd & 4th, and title shows nothing) to keep me from having a true 3rd lien.

I did have several conversations with him on the phone and sent some emails after getting the notice - stupid me. However he initiated the contact (after about a year of no calls & having changed his number) after the notices were sent out... so maybe the judge will look neutrally upon the subsequent conversations.

TCREEGAN - thanks for the info about rescinding within 60 days. I would've gone merrily along until he sideswiped me again. The adversary proceeding's looking better. Now if there was a way to do it myself, without shelling out another $10K which may not be recovered.

[helpmeout]

While I understand every situation is different and depends on what transpired to cause the rift in the first place - when it comes to money, to me its not worth losing someone over or writing someone off thats been a part of your life since birth, but again, thats my opinion on the matter.

Forgiveness is not about forgiving the other person, but to release yourself from the anger/hatred/whatever the reason was/is that caused the rift to begin with. I liken it to a type of "self medicating" that helps you move forward & heal.

One can forgive a person and the bridges still be burned. $50,000 was a lot of money to loan a family member (and something I wouldn't do if I had that type of money). It's one thing to declare bankrupcty on debts owed to a business. It's completely different when it's a family member. I'm not saying that a person shouldn't be able to discharge the debt, but that a person should think real hard before they do. Because they could lose a relationship with a family member over it. Especially when the amount isn't peanuts.

Personally, I would forgive the person. But the bridges would be burned. I simply don't have time for someone who would do that to a family member.

[BKOnce]

Let's unspoken KARMA rules !! Btw, I hate this "scrolling" features .. of this forum

[Pandora]

Maybe for you. I have family members that I don't really have a relationship with at all by my choice (my father is one of them, I couldn't tell you if he was dead or alive). There's no hatred. No "If only" about it. I simply accept that the bridges have been burned and there is no turning back. And I have no regrets at all. Silence can be golden, as well.

While I understand every situation is different and depends on what transpired to cause the rift in the first place - when it comes to money, to me its not worth losing someone over or writing someone off thats been a part of your life since birth, but again, thats my opinion on the matter.

Forgiveness is not about forgiving the other person, but to release yourself from the anger/hatred/whatever the reason was/is that caused the rift to begin with. I liken it to a type of "self medicating" that helps you move forward & heal.

[helpmeout]

What's this question of reaffirmation? You're going to ask your brother to reaffirm the debt?

Apparently. And he would be doing the right thing if he agreed to it.

[justbroke]

Is there a generic REAFFIRMATION form, or do I need to get one from my brother's BK attorney?

What's this question of reaffirmation? You're going to ask your brother to reaffirm the debt?

[tcreegan]

Hello again vulkrypse,

Go to the BK court website, they may have a blank form you can use. ...but is more complicated than you might think....reaffirmations need some specific disclosures and either his attorney or the BK judge have to approve it. And he can rescind the reaff within 60 days.

Wish you the best on this, hopefully you can work it out,

Tom in Colo

[vulkrypse]

the howtoinvestigate.com info came back. It was a very weak report.. won't help.

Is there a generic REAFFIRMATION form, or do I need to get one from my brother's BK attorney?

[newbie2]

Thanks for all the advice, I really appreciate it.

I WAS doing the forgive/forget thing when I thought he was losing the property in the BK, but then I downloaded a PDF of the filing from the BK court two days ago and found that he's KEEPING the property... So now I'm mad.

I also discovered that he has liens (mechanic, about $65K) on the property that he didn't disclose as assets on the filing. I'm considering an asset search to see if there is more hidden stuff. Anyone have a search company in mind? I found howtoinvestigate.com and may use that one.

If I were to inform the court of any undisclosed assets, would the BK fall through? I may be able to put a lien on the property then. Of course, then he might just foreclose on it, and I'd be out the money again... unless the court wipes out his liens and I'd be in a higher position.

PS. I know this sounds awkward because brothers are involved. However I'm trying to be very realistic about my options.

Liens aren't assets.