A Thought About Bankruptcy Petitions: Creditor ID

Upon finding that a portion of those payments should be applied to the subject loan, the declaration of default would be invalid because it would either be wrong inasmuch that the third party payments would at least be prepayments of future monthly payments, or wrong because the third party payments reflected an inaccurate accounting of the principal due.

OK let’s be clear that I don’t know bankruptcy well enough to even have an opinion, but I do have an idea and I would like this post forwarded to bankruptcy attorneys to get their reaction.

Here is the proposition: A Petitioner files for bankruptcy where one of the issues is a securitized loan. My idea is that the schedules NOT show the any of the known parties as creditors, because they are not. Especially if you have an expert opinion that describes the creditors as being unnamed but readily identifiable investors if the servicer will respond properly to the Qualified Written Request.

Upon reflection I don’t see why we would name the pretender lenders as creditors at all. I would leave them off the list of creditors (on any new cases filed) because they are not creditors. Maybe file amended schedules removing them. I would disclose the non-judicial foreclosure attempt wherever you can do that of course. Show the house as an asset with undetermined value. Wouldn’t that force them into being proactive? They would have to say “Hey! We are creditors secured by this property.” That would force the burden of proof onto them even as to standing, wouldn’t it?

Can someone who is not a creditor on the schedules file a proof of claim? What happens if you deny the claim and deny they are creditors? Do THEY have to file the adversary? Your position would be that you have this Expert Declaration that identifies the creditors, at least by description, and these would-be foreclosers don’t meet the description. So you disclosed the fact that they were claiming a default but you deny they are even creditors, much less secured.

It would seem that this would force them into proving to a bankruptcy court that they actually have authority which in turn would require them to produce all the documents granting them that authority. It also seems to me that they would have to come up with a full accounting for all payments from all parties, including from credit default swaps, insurance and Federal bailouts.

In the course of the proceedings, your allegation would be that they did in fact receive third party payments as has been widely reported by the press. They would probably answer something like those payments are irrelevant.

Your response to their assertion is to ask the court, who decides whether third party payments are relevant or not — the court or the creditor? The court would most likely order them to disclose all such third party payments along with documentation thereon so that the court could determine whether the payments should be applied to the pools in which the subject mortgage loan is Located” (assuming the assignments are valid), and then in turn determine what percentage of the payment should be allocated to the subject loan.

Upon finding that a portion of those payments should be applied to the subject loan, the declaration of default would be invalid because it would either be wrong inasmuch that the third party payments would at least be prepayments of future monthly payments, or wrong because the third party payments reflected an inaccurate accounting of the principal due.


32 Responses

  1. Dear Miles: Your message of 19 December just came through the Disqus system today, so this is not really a good forum in which to try to dissect specifics of your Filing. You indicate you filed a Chapter 7 in Northern Cali. there can be no sale, judicial or non-judicial, of your property with the Filing in place, due to the provisions of the automatic Stay, Sec. 362(a) of the BK Code. They would have to file for “relief from Stay” and you can expect that Filing very shortly; it is the single most common Filing done in the BK Court system. In a “7,” [not my first choice for a BK Filing], you do not retain control of your assets, they go to the Ch. 7 Trustee, and he has the right to litigate. He probably will not. Secured claims will pass through the “7” in most cases. Contact me directly through “lounsburylegal@gmail.com” and attach as pdf scan if possible all the papers in your case so far. Let’s take a look and see what can be done.

  2. Mr Jan Van Eck, I have taken your advice on completing the BK schedules here in the Northern District of California under a Chapter 7 and would like to know: 1) Will a proof of claim be required by the court or do I need to be more proactive as a debtor to move the pretender servicer Chase to file one? I have completed the meeting of the creditors, no creditors showed. 2) Should I also list the trustee, California Reconveyance, who is conducting the non-judicial sale, on the schedules so they are also noticed?

    Please advise at your earliest.

    Happy Holidays!
    Best Regards, Miles

  3. Pat:
    I forwarded your post to Mr. Van Eck.
    To follow is his response:
    “Pat” has 30 days to file an Adversary Proceeding. I see a Gold Mine. tell Pat that she can clean their clock for at least 4750,000 plus probably treble damages of the value of the house. But she has to get moving. Since Attorney Fees will be tacked on to the judgment against the debt buyer, any decent BK attorney can do this. If not, she should proceed on her own, this is NOT an opportunity to miss.

    Unfortunately it has a messy case history. Nonetheless, a debt buyer cannot possibly buy a debt that is on a lost note. Cannot happen, that is a contradiction in terms. So sue them all. You have several different Adversary Proceedings to file here, against all the parties, but I would do them individually with different tort and possibly contract claims.

    Again, cases like this where there are colossal screw-ups on the part of the collectors are gold mines. Meanwhile keep in mind and your friend Pat should claim that the Note in controversy was actually Paid consequent to the insurance proceeds from a credit-default swap, and this is hidden from both the debtor and the Court. And that brings in yet another set of fungible claims.”

  4. Help…need objective opinion please

    My mortgage loan was discharged in Chapter 7 in mid 2008 or so we thought!

    We named servicer as the creditor and our attorney did not know or suggest to object to the Motion for Relief of Stay so it was granted by the court. I doubt trustee or attorney or anyone even looked at note provided. It clearly shows they were not the party of interest!!!!!!!

    Income was reduced but we continued to pay as we could using all of our savings while trying to negotiate a modification and looking for employment.

    Fast forward 2009 NOD sent after second lump sum payment was made to bring loan current. As soon as check cleared we received NOD servicer had added undisclosed fees which made one payment short so they put the funds in a suspense fund and the rest is history. Refused payments from then on.

    Now 2010 I am told I am in active foreclosure but still in home. No payments in 18 months. Loan has changed servicer two times since Chapter 7 discharge and NOD.

    Lost Note Notice arrived by certified mail in 12/09 from banks attorney
    QWR sent to all parties no response
    Substitution of Trustee filed at County Clerks office in 2/10 non-judicial state
    stating MERS naming US BANK, NA as nominee for Trust blah blah blah!
    New Servicer again and now Loan Number Change 3/10
    I immediately disputed debt with debt collector/ servicer and had QWR sent
    Response did finally come from new servicer – QWR lame but did give me copy of note and closing paperwork.
    Debt calls for 45 days until cease and desist letter sent by attorney.
    Next 5/1/10 Debt Collector/ New Servicer starts reporting me late 180 days (say what try 18 months) on my credit report on a debt that was discharged trashing my reestablished credit!

    I dispute debt again and Debt collector/servicer and credit bureau both respond debt is valid!! There is no way this debt collector can show proof of claim.

    I call my BK attorney and he assures me debt was discharged and requests of the BK Court to reopen BK 7 file with Motion for Sanctions . Also files FCPA and FCDCA on both the bureau and the servicer/debt collector. I meet with him and he does NOT ” GET IT” on this mortgage mess!

    I received letter from US Bankruptcy Court saying this matter came before the court on Debtor’s Motion for Sanctions and to Reopen the case and no response having been filed by Servicer and it seeming right and proper, after notice and hearing , to do so, it is hereby :
    Ordered that this case is REOPENED, it is further
    Ordered that NO Trustee shall be appointed
    Ordered that Debtor has 30 days in which to file an Adversary Proceeding.

    Needless to say I want them to stop reporting and grant me the fresh start the court granted.

    My bigger concern is is this an opportunity to show the judge the first servicer lied to the court when they submitted false statement to the court in Motion for Relief? With everything in the news maybe he would look at the hanky panky going on…

    The copy of the mortgage note I received in the QWR from new servicer/debt collector on 4/10 shows one Pay to the Order of endorsed in blank form orginial lender ( out of business to Servicer / pretender lender)!

    Yet the paperwork the first servicer (pretender lender) sent to the court for the Motion for Relief in BK 7 discharge 16 months earlier clearly shows two Pay to the Order of Stamps one from Orginial Lender to Servicer and one from Servicer to Endorsed in Blank. The first servicer also told me my loan was securitized but I did not know what that meant back then.

    Seems to me the Debt Buyer got sold a defaulted loan 13 months after default and 11 months after NOD and 3 months after Lost Note Admitted by Banks attorney and 1 month after Substitution of Trustee was filed.

    I almost feel sorry for the debt buyer ;-(

    How can you assign,sell or transfer a lost note?

    Does this raise anyones eyebrows?

    I have a foreclosure attorney who “Gets It” and we are ready to fight but I am not in foreclosure yet and he does not know much about BK. I have a BK attorney that DOES NOT “GET IT” but is going after the fresh start I was promised.

    I am just trying to make sure I do not miss an opportunity since I am the mova


    Maybe I am over thinking this…

    Any thoughts if this was your situation?

    Any observations would be appreciated especially from Mr. Jan Van Eck.
    I wish he worked in my area!! I am sure I am not the only one going through this!


  5. to HKCon:

    I only saw (and became aware of) your Post of 6/13 this afternoon. No case is ever hopeless. there is always a new wrinkle to explore. How did you make out with your Hearing on relief from stay? Did Wells Fargo file a proof of claim? What grounds did they present for being relieved of the automatic stay?

  6. to Jan or anyone else who can answer:

    “Now what happens is that the Indorsed owner and the pretender lenders then have to file a Proof of Claim, which has to have complete documentation attached. if it is incomplete, or fraudulent, (and they all are), then you file an “Objection to Proof of Claim” and then a Hearing is set. In the interim you file for Discovery, and they have to produce all the documents, including everying on the QWualified QWritten request. If you show up for the final Hearing (no more continuance, expect that to be about 6 months into the cae) and they have STILL not produced the stuff, then at Hearing you ask for the Proof of Claim to be vacated. Poof! The proof of claim is struck, and bye-bye creditor.”

    So discovery can be done outside of an adv. proceeding & prior to the motion for relief? That’s huge!

    1. Debtor files Ch. 7
    2. Servicer Files Proof of Claim
    3. Debtor Files Objection to Proof of Claim/Points and Memorandum
    4. Servicer Files For Motion From Relief of Stay
    5. Debtor Files an objection to motion for relief from stay and notice of hearing/memorandum in support of objection to motion for relief from stay and notice of hearing

    where would the filing for discovery be located in the above mentioned sequence?

  7. Mr. Van Eck,
    I am in a 7, and so have no plan, I filed my petition listing the “creditor” as a unsecured non priority debt and listed the property as an exemption on my schedule c. Wells did not show up at the 341 hearing. What would you consider “solid ground”? Can I also file my opposition to relief motion at the same time, (hearing is 06/30/10 and I believe the opposition motion needs to be filed 14 days prior to hearing). I will totally understand if you feel answering would be going to far or would need to be compensated.

  8. to HKCon:

    Nope, not too late, unless your Plan is Confirmed, or other factors. Go right ahead and file your Objection to Proof of Claim. Just be sure you are on solid ground.

  9. oh man I am hoping someone is going to tell me it is not to late to object to the proof of claim after the 341 meeting…

  10. To touch upon what Jan has been saying. These are just samples from a case to get an idea of where you have to go to make it happen for you.


    When the creditor files a motion for relief from stay, you file an objection to motion for relief from stay and notice of hearing.


    You follow that document up with a memorandum in support of objection to motion for relief from stay and notice of hearing


  11. to WRPinda:

    Sure, that works iwthin a 7. When the opposition foles a Proof of Claim, the burden to disprove it then shifts to the Debtor Petitioner. You then file an Objection to Proof of Claim (and/or an adversary proceeding) and then you go slug it out. If the alleged creditor then is found not to be the creditor, then uder the principles set forth in “In Re Noyes” [Mass / Worcester USBC, Judge Rosenthal] you go collect some $750,000 from them as sanctions. Makes the debt on the house rather trivial.

    And this is the big spear with which you pierce the pretender lenders. Force them to file a Proof, and then demonstrate that the Proof is false, or at least inaccurate, and you are way ahead. You can assume that the pretender lenders will File anyway; greed is their maxim. Your job is to make their greed work against them. But you have to be doggedly persistent, and set up a good game plan. remember that these louts steamroller people all day long, so they anticipate (with some impunity) that they can do it to you, also.

    A smart pretender lender, when seeing stiff resistance, would fold his tent, withdraw the Proof, and walk. But not many are smart enough.

  12. Do the above mentioned tactics also apply to chapter 7, if not any other suggestions for a chapter 7?

  13. to “tendingJackson” :

    This is a very interesting question. Personally, I think so. the reason is that it puts the lender (or pretender) into the case, and forces him to file his own Proof. The question tactically is do you file it as a secured or unsecured claim.

    I cannot give you advice on this as the tactic is so new. If you put it in as unsecured and they do nothing, then you have a minor unsecured claim to deal with. If it is a secured claim filing then you cannot cause mitigation of that claim within the structure of a Ch 11 or 13, if it is the primary residence. Note that once the creditor files his own Proof of Claim then the presumption inside BK law is that his Proof is valid and the burden shifts to you to disprove it. And that is a typical problem. You would have to do that with an Objection to Proof of Claim or perhaps an Adversary Proceeding. But the burden shifts to the debtor.

    An equally interesting tactic is to find some fraud or flaw inside what the lender has done, ie a forged notarization or false signature, and then file for equitable subordination under Rule 510(c). When you create your Plan you provide a section for subordinated claims and mark them for payment at some fraction. then if the claim gets moved in effect you should be able to pay it for say 6 cents on the dollar. try to remember this tactic; it remains little used.

    Also remember that in a Ch 11 you have “votes” on each group of claims and you need to carry each group or sector according to strict rules as to number and dollar amount. So you have to make your peace with the less important members of each group to be sure the votes are loaded in your favor.

    If you do not list a creditor then unless they develop “actual knowledge” then their claims are not disposed of by the bankruptcy. So putting them in as unsecured for 410 or as secured for $10 (as your tactics determine) sounds like a great starting point.

    But make sure you have the votes, because unless you can convince your court to do a bradsher cram-down, you are going to end up paying 100 cents on the secured property claim. And that hurts. Either taht, or push the claim into a 510(c).

    Does that help?

  14. Jan,

    Suppose the pretender lenders don’t file a proof of claim. Should the Debtor file it for them? And if so, should they file for value of $10?


  15. Dear Don-CA,

    Please send on the transcript of In Re Paredes and Re Yellowstone Dev if you have them readily available.

    Charles Cox

  16. Good stuff Jan, Neil and others. Keep the information coming.

    Steve Vondran, Esq.
    California / Arizona Offices
    (877) 276-5084

  17. “For an example of the Objection to Proof scenario, look at In Re Paredes, USBC, S.D> NY, done by Atty Shaev. I have a copy of the transcript and can PDF it over. For an example of the subordination result, look at In Re Yellowstone Development, USBC, Montana, you can find the Order on the Web (I also have that one somewhere, have to dig it out).”

    Jan, when you have a moment, can you pdf it to me at dnd1190@gmail.com


  18. to Kevin Atchison:

    Sure, you can procedurally file an Adversary Proceeding as you suggest. It is typically not done for cost reasons. Debtor’s counsel has to run two concurrent dockets, and the debtor typically does not have much money to pay for it.

    The “Objection to Proof of Claim” remains directly within the Docket as a Core Proceeding. So that means that the case docket cannot be closed as to that creditor (and, possibly, a Plan not be confirmed or paid on) until the issues are resolved. It puts the Hearing BK Judge on notice that there is a big problem with who the lender really is.

    In some Courts, the Adv. Proc. is not heard by the Docket Judge. Sometimes that is an advantage, sometimes not. there are probably some other very subtle nuances that I am not thinking of at this moment. One of them might be the matter of obtaining heavy Sanctions inside an Objection to Proof. See: In re Noyes, USBC Mass, Judge Rosenthal, where he whacked the Creditor and their attorneys for $750K. It was reduced to 500K by a Court of review, the US District Court. I think all these amounts flowed to the Debtor, not to the Court. So the Debtor ended up with the house for free and a big chunk of cash to boot. Always nice.

    (That was Ameriquest that was screwing around, as I recall).

    In an Adversary, you can also toss in a Complaint for money damages. And that is nice. After all, and Adversary is a Complaint against another, a lawsuit. So if you file an Objection to Proof in the main Docket, and file an Adversary alleging other issues and facts outside the main docket and before another Judge and ask for money damages, then you can really whack away at the pretenders.

    In an Adversary, you might be able to have the case heard by jury. In an Objection to Proof, not.

    Your observation that the State Courts are way behind the cure is, I think, universally true, except for Judge Schack’s Court in Kings County, Brooklyn, New York City. He has done some serious whacking at pretender lenders. I can vouch that, at this point, Deutsche Bank has flatly forbidden its foreclosure sharks from filing anything in that County to avoid getting in front of Judge Schack. I have never met him, but .. ya gotta love him!

    Note also that in Kentucky, the Legislature by Statute will not permit a foreclosure for more than the value of consideration paid at the last transfer. So if no consideration is recorded (common enough), then the property owner is home free. Unfortunately, some KY State CT Judges are ignoring the Statute, even when the Defendant pleads it. Sad.

  19. to Matt Weidner:

    As to listing and then Objecting to the Claim: in theory, probably nothing wrong with it. BUT you have to be absolutely sure to list the claim as “Disputed.”

    See, here is the rub: suppose the other side does nothing. And you end up doing nothing. In theory, a disputed claim in which there is no filed Proof of Claim is barred by the bar date. But that is up to the Judge. If you did nothing, and they did nothing, what assurance do you really have that the Judge does not take the discretionary position that the listed claim will just be treated as an assigned claim?

    The Judge is not supposed to do that, but it might end up that way.

    If you list the secured creditor, the last one you can identify by Indorsement on the actual Note, as a ten dollar secured creditor, and mark it disputed to boot, then in the event you do nothing and they do nothing you may end up paying ten dollars to that party. So What?

    But you list the pretender lenders in the unsecured section and list them all as $10 lenders, and disputed, and then if they want to move over to the secured section, then they have to file a Proof, and you file the Objection, and so forth.

    Where attorneys are going to get into serious trouble “down the road” is in filing the Schedule with the pretender-lender as the secured creditor and listing the full amount of the pretend loan as a debt. Now if the Note was actually paid off by a credit-default swap insurance policy (probably non-recourse to boot), then the atty for the debtor is open to suit for malpractice. Why? Because then the debtor is stuck with a secured debt which someone else had already paid. And in BK Court, if you list it, you “own” it.

    Again, remember that it all hinges on the practice in your specific Court. In theory, the rules are uniform. In practice, …

  20. to Nye Lavalle:

    a Servicer is just a Servicer – not a real party in interest. A Servicer cannot file a proof of Claim listing itself as the Owner of a Note. That is nonsense.

    If a Note was introduced to ANY COURT and there was no Indorsement (or allonge) and then later the same note turns up with an Indorsement or Allonge and there is no dating showing that it happened after the first Showing, then you have their rears nailed for fraud.

    Notes indorsed “in blank” are always a problem. there is a difference, subtle to be sure, between “blank” and indorsed “to bearer.” A “bearer” Note is, in theory, enforceable by anyone who can demonstrate good ownership. Although there is some dispute on this, I would argue that a bearer Note that is stolen cannot be enforced by the possessor as that would be against public-policy.

    Moving on, a “blank” Note I would try to attack on the grounds that the “blank” is done in contemplation of setting in forth a pattern of deceit, and that is against public policy. Probably would not get far with it, but it might muddy the waters a bit with some Judges.

    The reason I would put down the last Indorsed party on the Note as a “secured” creditor and then post his value at $10 and then mark it “disputed” is that you have a property and you have to set up a class for secured creditors, even if there is only one. In the best case, you pay ten bucks in the BK procedure and you have discharged the Note, or at least the security. For that, I will fork over the ten-spot.

    By definition the Servicer never paid any money for the Note so the purported Allonge is a fraud. Also be sure to check other posts on how the allonge is supposed to work, and how these clowns screw around with them. It is very technical and if the party claiming to be the owner of the Note has screwed around with the allonge then the allonge is Invalid.

    You list the other clowns as unsecured non-priority debts in some nominal amount, again say $10, just to avoid having them do a non-judicial foreclosure and claim that they were not notified. There seems to be some (a scattering) case law that suggests that a party not on record that ignores the automatic stay, sells the property, and then the new buyer (an innocent) goes and registers his purchase on the land records, cannot be attacked; the sale might not get set aside as void or voidable. that would be a problem for you. So you toss them in, mark it disputed, and let them file their Proof of Claim, and then you file an Objection to Proof of Claim. And then you see where it goes.

    Anyway, those are just my tactics. everybody has their own. Keep in mind that you do have to tailor your tactics to mesh with the mental set of your Judge. And that is always a challenge. Hope this helps.

  21. Jan , wish you had been my bk atty awesome.

  22. Those in VA/DC facing issues discussed here are encouraged to contact bankruptcy attorney Greg Bryl through bryllaw.com

  23. Another reason why it is important that we force lenders to properly identify themeselves in Foreclosure, not just “USBank” or “Duetsche Bank”, but US Bank a National Association, headquartered in Virginia….we need this in order to properly list them on creditor schedules. What’s the harm in listing the pretender lender then objecting to claim? And also listing all unknown beneficiaries of the trust if you know the name.

  24. Jan,

    Will not file an sdversary under 7001 to determine the “extent, validity or priority of a lien?

    At least here in Arizona it seems the bankruptcy courts are much farther along in considering, and understanding, the issues of securitization than state courts.

    Kevin Atchison
    Joseph W. Charles, P.C.
    Glendale, AZ

  25. jan, I agree totally with your direction. Only question I have is why not list the debt as unsecured, rather than secured?

  26. What we’ve been suggesting after our investigation is that an “unsecured debt” of an “unknown amount” may or may not be owed to “unknown creditors” who are Does 1 to 1000.

    Make them prove their case. Recently, in a commercial bankruptcy, the servicer provided an affidavit stating the note to be a true and genuine copy of the NOTE IN THEIR POSSESSION. Problem was, NO INDORSEMENT OR ALLONGE ATTACHED showing they were note owner.

    The POA from the FDIC they provided instructed them to endorse the notes “in blank.” Then after stay lifted, they moved for foreclosure and we file suit and they produce an allonge 4 months after the bankruptcy and the allonge is endorsed to the servicer.

    I can’t get into more details prior to deposition, but the assignments and allonges are forgeries etc… Will keep you posted!

  27. Basically I need a bankruptcy atty in FL with van Eck’s keen eye. Any suggestions? I live in Tampa Bay.

  28. Attorney Jan van Eck, where do you practice?

  29. I would suggest that this procedure is extremely dangerous. If you fail to list a “creditor” or a pretender lender than you lose, or risk losing, the protections of the automatic stay, Sec 362(a). While “actual knowledge” of the Debtor’s filed Petition precludes action under 362(a), demonstrating actual knowledge is perilous.

    Better practice: list the Note obligation as to the last proper lender-holder, presumably on the Note Paper itself with a proper Indorsement, as the creditor. If you think the Note has been paid by a credit-default swap or other arrangement, then list the secured party (the last Indorsed holder) for a value of $10. You mark the claim as “disputed”. that is a letter code in the adjacent column. You list the “pretender lenders” as unsecured creditors with a value of $10 each, and mark the claim as disputed.

    Now what happens is that the Indorsed owner and the pretender lenders then have to file a Proof of Claim, which has to have complete documentation attached. if it is incomplete, or fraudulent, (and they all are), then you file an “Objection to Proof of Claim” and then a Hearing is set. In the interim you file for Discovery, and they have to produce all the documents, including everying on the QWualified QWritten request. If you show up for the final Hearing (no more continuance, expect that to be about 6 months into the cae) and they have STILL not produced the stuff, then at Hearing you ask for the Proof of Claim to be vacated. Poof! The proof of claim is struck, and bye-bye creditor.

    Outside the BK Court, you then take a certified self-authenticating copy of the Order to the State Court and file suit to Quite Title. Now the title claim (the mortgage or trust deed) is stripped of the land title records. YOu can sell the house, or whatever. No more mortgage.

    This does leave the issue of the actual Note. If the owner (or holder, depends) of the NOte then screws around with his Proof, then you file an Adversary Proceeding within the BK Court as Plaintiff and ask for relief by “equitable subordination” under Code Sec 501(c). That puts the Note at the very bottom of the food chain, stripped from the property, and then you either do not pay it or pay around 1 cent on the dollar, or whatever your Plan provides.

    And that is how you sock it to them.

    For an example of the Objection to Proof scenario, look at In Re Paredes, USBC, S.D> NY, done by Atty Shaev. I have a copy of the transcript and can PDF it over. For an example of the subordination result, look at In Re Yellowstone Development, USBC, Montana, you can find the Order on the Web (I also have that one somewhere, have to dig it out).

    Either way, you win, they lose. And that makes for a really great day.

    And then when you are all done in the BK Court, you go sue their rears off in some other court for their fraud, and ask for 50 million in damages. Put six homeowners on the Jury, show how they screwed around, and watch the fireworks.

  30. The logic appears sound to me as a client , not an attorney. I would however be shocked if the creditor opens themselves to discovery and a full accounting (which of course is the point of the exercise).

  31. My take on this as a paralegal …

    I would put John Does 1-1000, as investors of ABS (name/# of ABS) c/o the pretender lender, as true holders in due course.

    With the bankruptcy courts looking a fraudulent behaviors on the part of both claimants and creditors, I would think that being THIS HONEST will at least have your court trustee asking questions. My thought is that in bankruptcy court, you have two potential allies … the trustee in bankruptcy and the judge.

  32. Sounds pretty good to me as a client, not atty.

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