Posted by John Behle on January 20, 2000 at 19:08:46:
…without all the facts. (and lots of dots)
It may be they can pull out of the bankruptcy, come to an agreement the court would approve, etc. We work with people as a lender that way sometimes and making the loan solves the problems. I’ve never worried about the situation of talking with them.
Usually it them contacting me and I am the one that has to tell them that they can’t do anything outside the court. Most of the time it is a potential foreclosure (the morning of) that triggers a bankruptcy and if a deal can be structured with the lender the bankruptcy wouldn’t even be needed.
Just a note as to the secured creditor thing before. As a lender with a trust deed or mortgage, there is not even an issue as to whether I am secured (though in a few rare cases I have seen bankruptcy judges take people’s security away.)
There’s no question. I AM secured. If the court sees that there is a great deal of equity above my lien, they may be very reluctant to release the property for me to foreclose, etc. They will want to use the equity to satisfy other creditors.
If there is little equity above my lien, then the court may be convinced that no one else besides me will be getting anything out of that property. The credit card companies, etc. will have to fight for what is left. The court may then release the property out of the bankruptcy for me to continue foreclosure on.