|FROM:||The Legal Taxi|
|RE:||Is amended consent orders by debtors in a bankruptcy process enforceable. Can there be an abuse, if they prevent creditors from enforcing their rights?|
Amended consent orders in bankruptcy plans and abuse of bankruptcy process.
Does the amended consent order by debtors enforceable? Could there be an abuse of bankruptcy process by debtors if they prevent creditors from enforcing their rights?
The creditor (client) held a mortgage and a deed of trust in property given by the debtor, her son, and a third party. During a 4-year period, all of the owners filed bankruptcy proceedings, always within days of a scheduled foreclosure sale. When the son filed a second bankruptcy proceeding, the parties entered into an amended consent order and then the debtor and other owners acted in a concerted effort to prevent the client's efforts to enforce its rights.
- Relevant Statute & Case
- Summaries of Key Cases.
To amend title 11 of the United States Code, and for other purposes.
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF, Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. 11 USC 101
[[Page 119 STAT. 30]]
- whether the debtor filed the petition in bad faith; or
- The totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse.
CONSTITUTION OF THE STATE OF TEXAS 1876
ARTICLE XVI. GENERAL PROVISIONS
Notice concerning extensions of credit defined by section 50(a)(6), article xvi, Texas constitution:
"section 50(a)(6), article xvi, of the texas constitution allows certain loans to be secured against the equity in your home. Such loans are commonly known as equity loans. If you do not repay the loan or if you fail to meet the terms of the loan, the lender may foreclose and sell your home.
Constitution provides that:
(d) The lien securing the loan may be foreclosed upon only with a court order;
(h) No additional collateral may be security for the loan;
(o) The lender may charge any fixed or variable rate of interest authorized by statute;
(Q) loans described by section 50(a)(6), article xvi, of the texas constitution must:
(1) not require you to apply the proceeds to another debt except a debt that is secured by your home or owed to another lender;
(10) provide that the lender will forfeit all principal and interest if the lender fails to comply with the lender's obligations unless the lender cures the failure to comply as provided by section 50(a)(6)(q)(x), article xvi, of the texas constitution; and "(r) if the loan is a home equity line of credit:
(7) The lender may not unilaterally amend the terms of the line of credit.
- The plan—
- Subject to subsections (a) and (c) of this section, the plan may--
(1) Designate a class or classes of unsecured claims, as provided in section 1122 of this title [11 USCS § 1122], but may not discriminate unfairly against any class so designated; however, such plan may treat claims for a consumer debt of the debtor if an individual is liable on such consumer debt with the debtor differently than other unsecured claims;
(2) Modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence, or of holders of unsecured claims, or leave unaffected the rights of holders of any class of claims;
(6) Provide for the payment of all or any part of any claim allowed under section 1305 of this title [11 USCS § 1305];
(8) Provide for the payment of all or part of a claim against the debtor from property of the estate or property of the debtor
Please find the attached document for highlighted copy of key case:
Please find the attached document for summary of key case:
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