1st Mortgage was avoided due to unperfected lien. Mortgage company did not record deed of trust for over four years after loan was made. Judge signed Judgment by default avoiding the lien as preferential transfer due to the fact that the mortgage company finally filed the deed of trust, but was within 90 days of my BK filing. Mortgage company also did not file a proof of claim by the bar date. Also a few other creditors did not file by the bar date. All creditors were listed as disputed in the initial BK filing
Chapter 11 Bankruptcy Attorney
Yes. However, the late-filed claim may be subject to an objection on the basis that it was late filed. Acknowledging that this is a chapter 11 case, you should be mindful of the possible application of Section 726, which under certain circumstances permits payments to creditors who filed claims after the bar date. You should consult with an experienced chapter 11 attorney.
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I agree with my colleague and I would like to add that this impacts your liquidation analysis so plan accordingly.
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I concur with my colleagues above. You should know that the United States Supreme Court set a very high standard for a creditor seeking to have their late filed claim deemed timely, or for its impact to change the course of your plan in your case. Basically that standard is the "excusable neglect" standard...which sounds benign but sets a substantially high bar. If your lender seeks redress, do not go quietly into the night...seek competent counsel.
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