Served with Lawsuit
Hello, I need some help! I thought we were candidates for BK or other relief and had in fact gotten to the point of retaining a lawyer and filing, but now I am thinking differently.
We have one debt that we are having problems dealing with. All of our other credit is good, we have less than $5000 in cc debt. Our income is finally getting back to normal.
We are in a very unique position whereby we are owed a large sum of money FROM a creditor on some land we sold two years ago. The funds were due to come in December 2010, but the creditor defaulted and has since filed chapter 12 BK.
A large portion of the monies that were due to be paid to us were allotted to be paid to one of our creditors on a HELOC loan that rolled into a "collateral" mortgage assignment since the equity in the home was not there to establish the lien any longer.
We had been paying interest only on this loan to our creditor, it matured in January 2011, but we did not get the funds from the creditor who owes us money. We started foreclosure proceedings and prior to sale date they filed BK. The lender we owed the money to, extended the interest only loan for 90 days, which matured 4/30/2011.
We had never been late with a payment to them until this loan matured. Since the note was now in BK that was securing this loan, we were not in a position to continue to assign said "collateral", as we didn't really have any control over it any longer.
In the meantime, we hired a big law firm to handle a "mitigation" with them to hopefully see if they would settle or work out some type of more attractive payment plan to help us try to get this loan paid down until we were able to get the funds to pay in full.
This lender we owe the money to has always been friendly with us and to be honest, I was just over it with the stress this situation has caused us and the expense in attorney fees to do a foreclosure and then represent us in bankruptcy.
The firm we hired sent the generic "poa" letter to the lender. The lender contacted me like two to three times asking if we had received the "renewal" loan docs that were sent to them to renew the interest only loan....they were supposedly sent to this lender. Again, we did not think we could renew assign a mortgage that was tied up in foreclosure and this firm was supposed to be mitigating a better deal for us.
The lender finally kept calling me, who is a friend of mine, and I just did not call her back. I sent an email to the law firm and asked them to please call her and tell her that she needed to communicate with them. The law firm sent me an email back and said she told her about not contacting me and that we were not going to sign the renewal loan docs and wanted to work out a "settlement" or better payment plan.
Well, evidently, that really ticked said lender/creditor off...that was basically end of June.
They filed a civil suit against us in early July and we were served July 25th.
Now I am freaking out. This is the only loan that is a problem for us, yes it is big $114K, but we can afford to make reasonable payments until our money is finally rec'd and we can pay it off.
I don't understand how we went from asking to "work" something out to law suit. I never rec'd copies of the docs that were sent to said lawfirm, I don't know what communication really went on between them and have never ever rec'd a demand letter of any type from said creditor prior to this lawsuit being filed.
Law Firm suggested we file chapter 13 bk and take care of this there, well, this just is not an option.
We are basically, land poor, mortgage receivable poor and I am a independent contractor working at a title company doing closing, do side closings and also have a horse/breeding business on the side....Just cannot have my life dissected by a Bk trustee....I would rather suffer through a wage garnishment until our money is rec'd before having to live through bankruptcy.
I sent an email to said lender/friend Friday night late, after having my head swoon over how we got into this mess in the first place....by listening to attorney's who were not looking out for our best interest at all and just wanted to put money into their pockets.
I basically begged her to drop lawsuit and work out a payment plan with us until this can be resolved within hopefully the next 12 months, the term the bankruptcy is due to run for the people who owe us the money. She is the one who signed the summons and complaint for the lawsuit and we have been personal friends for over 30 years....I was just so embarrassed and I pray she will work with us on this.
If not, what if anything, do you see we can do? If I had known they were going to go straight to lawsuit after being delinquent only a little over 60 days, I would have stepped in sooner....they did take $500 that we had in a cking account prior to filing lawsuit...at that point we owed them $1200 in interest. We have the funds to catch it up and pay them something now.
Should we have rec'd some kind of demand letter before this lawsuit was filed so I would have known this is coming? I mean, I had no idea they were not going to work with us through the attorney? OMG, what a mucked up mess this is now.
Any thoughts/suggestions you may have for me on this mess is greatly appreciated.
Thank you
We have one debt that we are having problems dealing with. All of our other credit is good, we have less than $5000 in cc debt. Our income is finally getting back to normal.
We are in a very unique position whereby we are owed a large sum of money FROM a creditor on some land we sold two years ago. The funds were due to come in December 2010, but the creditor defaulted and has since filed chapter 12 BK.
A large portion of the monies that were due to be paid to us were allotted to be paid to one of our creditors on a HELOC loan that rolled into a "collateral" mortgage assignment since the equity in the home was not there to establish the lien any longer.
We had been paying interest only on this loan to our creditor, it matured in January 2011, but we did not get the funds from the creditor who owes us money. We started foreclosure proceedings and prior to sale date they filed BK. The lender we owed the money to, extended the interest only loan for 90 days, which matured 4/30/2011.
We had never been late with a payment to them until this loan matured. Since the note was now in BK that was securing this loan, we were not in a position to continue to assign said "collateral", as we didn't really have any control over it any longer.
In the meantime, we hired a big law firm to handle a "mitigation" with them to hopefully see if they would settle or work out some type of more attractive payment plan to help us try to get this loan paid down until we were able to get the funds to pay in full.
This lender we owe the money to has always been friendly with us and to be honest, I was just over it with the stress this situation has caused us and the expense in attorney fees to do a foreclosure and then represent us in bankruptcy.
The firm we hired sent the generic "poa" letter to the lender. The lender contacted me like two to three times asking if we had received the "renewal" loan docs that were sent to them to renew the interest only loan....they were supposedly sent to this lender. Again, we did not think we could renew assign a mortgage that was tied up in foreclosure and this firm was supposed to be mitigating a better deal for us.
The lender finally kept calling me, who is a friend of mine, and I just did not call her back. I sent an email to the law firm and asked them to please call her and tell her that she needed to communicate with them. The law firm sent me an email back and said she told her about not contacting me and that we were not going to sign the renewal loan docs and wanted to work out a "settlement" or better payment plan.
Well, evidently, that really ticked said lender/creditor off...that was basically end of June.
They filed a civil suit against us in early July and we were served July 25th.
Now I am freaking out. This is the only loan that is a problem for us, yes it is big $114K, but we can afford to make reasonable payments until our money is finally rec'd and we can pay it off.
I don't understand how we went from asking to "work" something out to law suit. I never rec'd copies of the docs that were sent to said lawfirm, I don't know what communication really went on between them and have never ever rec'd a demand letter of any type from said creditor prior to this lawsuit being filed.
Law Firm suggested we file chapter 13 bk and take care of this there, well, this just is not an option.
We are basically, land poor, mortgage receivable poor and I am a independent contractor working at a title company doing closing, do side closings and also have a horse/breeding business on the side....Just cannot have my life dissected by a Bk trustee....I would rather suffer through a wage garnishment until our money is rec'd before having to live through bankruptcy.
I sent an email to said lender/friend Friday night late, after having my head swoon over how we got into this mess in the first place....by listening to attorney's who were not looking out for our best interest at all and just wanted to put money into their pockets.
I basically begged her to drop lawsuit and work out a payment plan with us until this can be resolved within hopefully the next 12 months, the term the bankruptcy is due to run for the people who owe us the money. She is the one who signed the summons and complaint for the lawsuit and we have been personal friends for over 30 years....I was just so embarrassed and I pray she will work with us on this.
If not, what if anything, do you see we can do? If I had known they were going to go straight to lawsuit after being delinquent only a little over 60 days, I would have stepped in sooner....they did take $500 that we had in a cking account prior to filing lawsuit...at that point we owed them $1200 in interest. We have the funds to catch it up and pay them something now.
Should we have rec'd some kind of demand letter before this lawsuit was filed so I would have known this is coming? I mean, I had no idea they were not going to work with us through the attorney? OMG, what a mucked up mess this is now.
Any thoughts/suggestions you may have for me on this mess is greatly appreciated.
Thank you
Comment