Currently Self Represented in a Chapter 13 Plan, but Need Understanding

[Fambam]

Good morning, everyone. I'm currently representing myself in a Chapter 13 Plan after letting go of my counsel and not being able to afford new counsel at this time. Due to medical issues, legally and on paper, I should not be representing myself, but here we are. I have a small support circle that is helping me uncover the basics of my Chapter 13 Plan. As we are in the beginning stages of reviewing the bankruptcy filing history, there have been several "uh-oh"s uncovered (totally separate from the reasons I let go of counsel). What's been uncovered is very hard to swallow. Below are several questions I have in hopes that I could get some guidance/feedback/wisdom/suggestions. I am a Bucks County, PA resident whose case is with the Eastern District Bankruptcy Court in Philadelphia. I also have sole member LLC separate from this personal bankruptcy that owns investment property (non performing, no rental income, as each property is uninhabitable at this time). I thank you for your time and commitment in advance, truly.



1) I now have a Pacer account and was wondering where do I find the entire list of creditors who filed claims?



2) During hearing, Judge read off some creditors that I am not familiar with and she mentioned some figures filed be these creditors that absolutely did not make sense to me. Numbers seemed way too high. How do I find this information to review for myself?



3) How do I know which creditors are being paid and which ones aren’t? On the actual Amended Plan dated for 6/15/23, there are only very little creditors mentioned, but the complete list of creditors that I know I owe are not shown on the Plan.



4) If a commercial mortgage lender for a property in LLC name files a claim in personal bankruptcy, what happens next? Can that lender go on and file foreclosure even if made a claim in my bankruptcy? Does that lender have to request a Motion of Relief just like 2nd commercial mortgage lender was instructed to by my former counsel? Before letting go of former counsel, he mentioned that the lender most likely went after my LLC and not me personally although this lender made a claim in my bankruptcy.



5) We came across the following insert in the Amended Chapter 13 Plan and this is for 2nd commercial lender for a defaulted mortgage against my sole member LLC. There are 2 investment properties that the below language pertains to. Please see below...



If "None" is checked, the rest of § 4(e) need not be completed.

1. Debtor elects to surrender the secured property listed below that secures the creditor's claim.
2. The automatic stay under 11 U.S.C. § 362(a) and 1301(a) with respect to the secured property terminates upon confirmation of the Plan.
3. The Trustee shall make no payments to the creditors listed below on their secured claims.*** What if I never agreed to surrending my real estate to this lender? Isn't someone supposed to discuss this action with me directly or not? Also, the Plan lists a property that the lenders fraudulently filed a deed in lieu of foreclosure on in September 2022, well before I even filed for bankruptcy (November 2022) and these same lenders sold this same property April 2023, after filing for Motion of Relief in January 2023 and prior to this Amended Plan of June 2023.

*** If this is in fact true that there was an automatic stay in place (lenders requested Motion of Relief in January 2023 and this Plan that lender is listed in was amended for June 2023, can the lenders take foreclosure action anyway before the automatic stay terminated? This is confusing since same lender requested Motion of Relief months prior. The lender since assigned all mortgage matters and documents to my 2nd position lender on the same property, which he now holds and is wanting to see what I'd like to do with property.

6) There's another commercial lender that I really wanted to have included in the Chapter 13 to save this property, but former counsel said February 2023 that my loan matured with this particular lender and that I'd have to show an additional $2K in income and increase Trustee payments by same amount to include this lender. Just found out about 1 week ago from lender that my loan has not matured and won't until 2026 and that the only reason that they are looking for full payment is due to the fact that I'm 18 months behind on payments. When I sought to include lender in Plan February of 2023, I was approaching 6/7 months past due in payments that I was hoping to catch up on in Chapter 13 Plan. The problem is, I was misled by attorney in that I thought the loan matured and that there was no other recourse. Former counsel had me communicate directly with this lender, and maybe things would have turned out better if attorney communicated with lender directly. Lender had told me since last year that the only recourse was to sell the property and he's still giving me that option even now. This lender did file a claim as well in my bankruptcy.



I know this is a long one, and thank you for your patience and reading this ahead.

Bankruptcy Judge has suggested that I amend my Bankruptcy Plan. I just don't even know where to start because this is all new to me and cognitively, it scrambles my senses and leaves me one confused, anxious mess. I do have a free consultation meeting coming up with an attorney to see how much he'd be willing to help me file a new Plan.

[justbroke]

Welcome to BKForum!

You have a complex Chapter 13 case. As a former Chapter 13 debtor who filed Pro Se, I can only tell you that you are in way over your head. We can't provide legal advice and nearly every single one of your questions is legal advice or legal strategy. It reads as though your former bankruptcy attorney was correct in many areas. I believe that you were not misled and you must understand that a Chapter 13 plan of your type is highly complex. It's not as simp.el as saying this loan hasn't matured.

Without giving any legal advice, consider the following.

While a Chapter 13 bankruptcy allows a debtor to keep all their property, the debtor must be able to afford to keep all that property. That statement is way more complex than it reads. For example, if you keep non-homestead property you must pay that amount to the bankruptcy estate (the Trustee) in order to keep it. Your attorney was 100% correct on what is required to keep property in a Chapter 13 bankruptcy.

• I now have a Pacer account and was wondering where do I find the entire list of creditors who filed claims? There's a link in PACER that actually reads "List of Creditors." There is also a link titled "Claims Register."
• How do I know which creditors are being paid and which ones aren’t? On the actual Amended Plan dated for 6/15/23, there are only very little creditors mentioned, but the complete list of creditors that I know I owe are not shown on the Plan. You have to read the original confirmed plan and the amended plan. Attorneys have software which manage this. You may be able to use the National Data Center (NDC) at some point, but you are now in charge of the case and you will need to maintain excellent records of everything.

[Fambam]

Thank very much for the warm welcome and thank you for your input! I totally understand in terms of not being able to provide legal advice.

- Just to clarify some things, with regard to adding the investment property in to pay that lender, former counsel told me that the loan matured, so I would have to pay about an additional $2K in Chapter 13 Plan. I took his word for this and thought my only recourse was to sell the property since I couldn’t afford that much to include additionally in the Plan. As per lender of commercial mortgage and my recent discussion, he says my loan has not matured. I just wish I had known this a year ago because I would have been able to work a payment amount with lender and have this added to the bankruptcy Plan. Lender is currently giving me the opportunity to sell this property although he’s listed as a creditor in my bankruptcy. He believes his attorney may have filed a Motion of Relief, but my circle of support and I could not find a Motion of Relief filed for this one.

- I just wish that my former counsel would have communicated directly with the commercial lender instead of me being required to get information from lender and maybe it would have been a different outcome. I still must be thankful that lender is even giving me this opportunity at all instead of foreclosing on me/my LLC.

- There are very serious matters that I won’t disclose here as to why I was encouraged to let me bankruptcy counsel go. I don’t ever wish to throw his firm under the bus, but it’s definitely obvious that my bankruptcy case was saved by releasing him and his colleagues as my counsel (I had 3 different attorneys corresponding with me during the attorney-client relationship).

- I was not aware that my Plan was confirmed until I spoke with another bankruptcy firm that informed me of this. I personally asked former counsel the status of my bankruptcy case prior to withdrawing his firm as representing me and never once was told my Plan was confirmed. I thought it was still in the works until I was told last November that my Plan confirmed August of last year.

- From what we are unraveling now, there was only one confirmed Plan and that was the Amended Plan that was drafted June 2023. The first Plan former counsel put in place in November 2022 was never a confirmed one.

- I don’t recall former counsel telling us what was needed to keep property in bankruptcy besides that $2K figure for property #1 which is personally guaranteed, but is a commercial mortgage via my LLC. Attorney did say that each lender would have to file a Motion of Relief and go after my LLC instead. Only concern I’m seeing so far here is that there’s one lender who has not filed a Motion of Relief who is a named creditor, and I’m not sure if that lender is getting paid through the Plan or not.

- I also have to amend Plan because there are creditors listed that I absolutely have no balances with. We addressed the matter after letting go of former counsel and that creditor has provided updated balance information to the Trustee and Bankruptcy judge. This is a priority creditor listed on the Plan, and that’s how we caught that error regarding the balance.

Thanks tremendously for your time! I absolutely agree that I must get a new attorney in place. I have no idea what I am doing, and I’m thankful for my support circle and personal rep who are helping as best as they can.

[shipo]

Fambam, welcome to the forum,

FWIW, you got a great reply from despritfreya in the other forum, you can expect pretty much the same response here.

[despritfreya]

Fambam, welcome to the forum, FWIW, you got a great reply from despritfreya in the other forum, you can expect pretty much the same response here.

I was actually going to suggest that OP post on this Forum but it looks like she found us. Fambam Welcome to the Forum.

Des.

[justbroke]

I'm just going to say this again. This is a complex case. You are operating a single-member LLC which owns real property. I can't tell you why a creditor has or has not filed: notification could be at issue. However, in Chapter 13s the order confirming a Chapter 13 plan will also state that the order lifts the automatic stay for any secured creditor "not provided for by the plan." (They are limited to in rem actions only, such as foreclosure or repossession.) Many creditors will file a motion for relief only to make sure there are no issues.

I don't know if a Trustee will let you pay out of your pocket for LLC property... unless you pay that same amount into the plan to go to the unsecured creditors. Yes, complex. It is more complex because the property belongs to the LLC (not you) and your personal guarantee is dischargeable in the bankruptcy. Why should the personal-bankruptcy creditors suffer because you want to fund a (separate) business entity? If you want to do that--fund the commercial property--then you have to give the same exact amount of money to the unsecured creditors. If you do not understand that concept, then you really need to go back to an attorney.

I don't know what despritfreya wrote in the other response, but that's about all I can say on this.

I know it's frustrating, but you were probably in good hands when you had an attorney. You are in what I would call a highly complex Chapter 13 that probably should have been a Chapter 11 for the LLC entity/entities, and a Chapter 7 or 13 for yourself.

(Just adding that I don't know how a personal Chapter 13 bankruptcy can cure arrears on a commercial mortgage held by an LLC. This reads like there is a complete misunderstanding as to what a personal Chapter 13 can do for LLC-held property.)

[Fambam]

Hello, shipo, despritfreya, and justbroke. Thank you for welcoming me to the forum. Thank you all for your wonderful input. I will take this to my personal representative to discuss for sure.

justbroke , this is good information to know. Please forgive me if this is a legal question ahead of time and I understand if you’re unable to answer it…how can I find this language about any automatic stay for a secured creditor not provided by the Plan?

justbroke , yes I see, and my former counsel told the commercial lender #1 that they’d have to file a Motion of Relief. Which they did early last year. Thing is I didn’t even own one of the properties that they filed a Motion of Relief for, and the other, the 2nd position lender bought the first lender out and is now giving me options as to what I’d like to do with that property.

justbroke, of course I wouldn’t want to cause any disadvantage to personal bankruptcy creditors as they deserve to get paid absolutely. It’s just that former counsel told me that any commercial mortgage held in LLC that was personally guaranteed could be included in Plan if that lender agrees and if debtor could afford it. It’s just former counsel gave incorrect information regarding the mortgage, which prevented me from including said lender. This is all in written communication, so this is how I’m able to remember the exact conversation about the lenders.

I definitely agree that I need counsel, this I know without a doubt. Cognitively, this is not something I’m able to understand on my own and even with my circle of support in place, it’s still a very huge challenge. I’m very thankful for the Bankruptcy Judge and the Trustees as well, as they’ve been extremely patient with me and assisting where they can without providing legal counsel (which I understand why they are not able - it was explained to me during my hearing a few days ago).

Thanks again tremendously, everyone! It’s really good to get to see the different takes on this and to be able to understand the ins and outs better. My county does not have Legal Aid services that include bankruptcy attorney to assist, so we’re speaking with different private firm attorneys to get their take. I have one upcoming meeting with a bankruptcy attorney to get his input. I have 30 days to develop a new Chapter 13 Plan that I have to present to the Trustee.

justbroke, oh and if I may ask, if there were priority creditors that I’ve been paying that I should not have been paying, what happens to the funds they received from the monthly plan? Would those funds be redistributed to the other priority creditors that are actually supposed to be paid? If you’re unable to answer and if this considered legal asking, I apologize in advance.

[justbroke]

In our district, it is by court order and is in the Model Plan for Chapter 13s. The stay still remains to protect the debtor from in personam collection activity, but it ends for in rem relief. That in rem relief allows the creditor to foreclose. One of the judges in Florida calls Chapter 13s a pay-to-play system. To get the protection of the court, you must pay (adequate protection at minimum) or propose a plan to pay the arrears and current amounts coming due to the secured creditor.

Termination of the Automatic Stay. If the Plan (a) provides for the surrender of collateral to the secured creditor or lessor, (b) provides for payments to be made by Debtor directly to the secured creditor or lessor, (c) provides that Debtor does not intend to make payments to the creditor, or (d) fails to provide for the claim of the secured creditor or lessor, such secured creditor or lessor is granted in rem relief from the automatic stay to pursue its remedies against the property that is security for the claim or the subject of the lease and both in rem and in personam relief against any codebtor.

Bankruptcy is hypertechnical and there are rules and code sections that build on one another. This is why one would need an attorney to navigate a complex issue such as "does the automatic stay automatically end upon confirmation for a debt/claim not provided for by the Plan of Reorganization."

As for personal guarantees, they become dischargeable in a Chapter 13 and are treated as unsecured creditors. They would not be "provided for" in the plan as far as I know. Perhaps that the misunderstanding that requires clarification. Yes, a Chapter 13 debtor, as an individual, would list the "personal guarantee" that they have on the LLC's debt so that the debtor can discharge that personal guarantee. That doesn't mean that the Chapter 13 is going to treat that as a secured debt; the debtor doesn't own the property. I don't see how a Chapter 13 debtor cures the arrears for an LLC's property... without paying the same amount to the unsecured creditors. In that case, I would highly suspect that it would be a 100% plan.

I can't help you on your priority claims. Your confirmed (or order amending your) Chapter 13 Plan of Reorganization defines what the Trustee is to pay to the various classes of creditors. You amend that plan if there are changes.

You need to engage an experienced Chapter 13 attorney. There are too many moving parts here and some things you are not understanding and I get that. A Chapter 13 can be highly complex like it's cousin, the Chapter 11. You will not get too far posting on various forums because there are two competing issues happening at the same time: (a) you don't have an attorney, and (b) you misunderstand a lot about the Chapter 13 process. It's not your fault that you ended up here, but I believe that your questioning may be hindering you from doing what you must do: hire a Chapter 13 attorney now.

Now, as someone who has been through bankruptcy and held property (in my own name), I say to take heed to the words of a very wise woman; let it go. I was much happier when I just let it go.

[Fambam]

justbroke , thank you truly. I appreciate all of this. Yes, I have an upcoming appointment with another bankruptcy attorney to get feedback. I’m definitely not opposed to getting new counsel, just have to find that one who wouldn’t require me to dismiss and refile. But, if that is the only recourse available to me, to start this process over again and file a New Bankruptcy , then we’ll have to go that route. One of my partners requested that I ask questions online to get an understanding because he too is very confused what when on with my Plan. Of course, he considers this preliminary feedback while I wait to see the other bankruptcy attorney next week. But, I believe this is really good input that I’m getting because I’m learning things I did not know.

This has been insightful, thank you!

Oh and yes, regarding the priority creditors, certainly understand. One (IRS) should not have ever been included with the balance that was reported and I made this known a few times to former counsel. Nothing was done sadly and I did not know I had any recourse other than to wait for that creditor to amend its claim. After letting former counsel go, I reached out to creditor directly and it immediately remedied the erroneous balance reporting and sent same acknowledgment to the Bankruptcy Court and Trustee Office. It felt nice to have one issue corrected, just gotta work on the several others now.