This is only a motion for relief from automatic stay. It's so they can auction off the property. At this point we don't even know if they will actually pursue a deficiency judgement when they do auction off the property.
If they didn't plan on that why would they have bothered with a more cumbersome and expensive judicial foreclosure when CT allows a nonjudicial foreclosure? The only advantage to them, for a great deal of time and expense, is the ability to pursue a deficiency judgment. If they just wanted to foreclose and swallow the loss, they could have done that weeks or months before the bankruptcy.
You're also assuming a deficiency judgment is worthless. Phil would have to actually get Chapter 7 discharge for that to be the case. That's not looking very likely. Under a Chapter 13, they'd be getting their share in a monthly payment just like everyone else, and if they got a lien and the WAkondo got foreclosed on or sold in liquidation, they'd have a claim on that, too.
And if the bankruptcy gets dismissed entirely, they could collect just like anyone else.
They're not pursuing this because they're just dumb idiots who like wasting their time in complicated multijurisdictional litigation.
@AnOminous or someone can correct me here but I think they're arguing that since surrendering the CT khando in Ch7 would also absolve him of the $50k deficiency, that would amount to a claim by the bankruptcy estate and they want it nullified.
It would not absolve him of the deficiency. They're entitled to that regardless. Phil is also not surrendering the property under Chapter 7, but it's being foreclosed on in a CT state court action.
just a reminder that debts incurred post bankruptcy are not dischargeable
i.e a deficiency judgement from midfirst
A deficiency judgment is an action on the note, not a new debt. The debt just takes a new form.
Doesn't matter what the selling price is. Phil is on the hook for the remainder.
Not quite true. If the property sells for less than the appraised value, the borrower is only on the hook for half the difference between the appraised value and the sale price. So the deficiency judgment would be for the amount owed minus the sale price, minus half the difference between the appraised value and the sale price.
can we assume DSP didn't respond to midfirst because of:
Because it would be an expensive exercise in futility, as he'd lose anyway. He has no good argument it shouldn't be granted.
4) its clear he doesnt want to lose that "business equipment" as he says its at zero risk, he is going to sperg if they take it, it will be fun, he seems so sure he wont lose it and he is too dumb to realize he can make the money to replace it with brand new shit in a single IRL crying scream.
That's pretty safe. This isn't a hypertechnical thing like a home office where if you use anything in it for any nonbusiness purpose whatsoever the IRS will try to fuck you on it if they take an interest. The only real concern is does he use this stuff legitimately to make money at something like a job. They don't want to take away your means to make a living or, more importantly, to them, to pay back your creditors, especially if you get converted to Chapter 13 and need to pay people back.
If the state laws allow the collection activity, then the written order allows it. Unless the judge comes in with a modified order prohibiting certain kinds of collection efforts the debate so far is silly. The real question is does state law allow it?
The stay is on judicial actions, and lifting it only affects those. They're still required to adhere to the other protections of bankruptcy, i.e. they can't call him at all hours of the day and night or dun him for it outside of those proceedings.
I talked to someone who does foreclosures and collections in the state and the procedure is pretty simple and involves just recording the judgment in the county where the property they want to put a lien on. There are no arcane state law procedures beyond that.
