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[investsf]

I don't want to put words into Andrew's mouth but I read it where the borrower has filed, therefore getting a case number, but a few don't go through with it and get it fully discharged.

2IANALcents

How do you get that?  His original email stated:

This was a borrower who told us she was going to file bankruptcy, which kept her out of a couple of debt sales. Once we realized that she was not actually filing bankruptcy, we took the bankruptcy tag off of the loan . . . .

That is a very different situation than one where the borrower actually files BK, but doesn't complete it through discharge.  That latter situation is certainly not unheard of -- for example, sometimes the debtor fails to file the necessary documents during the course of the BK, resulting in the BK's dismissal.  But that isn't what Andrew's original email stated.

Perhaps what Andrew's talking about is the case in which a borrower has actually filed papers with the court, but the court has not yet notified all affected creditors.

[ira01]

The potential for BK status is the reason I think debt sales should occur more often that twice a year. If BKs can't be sold then sell them before they can become BKs.

The last three debt sales, as I recall, occurred roughly quarterly.  In any event, I doubt many borrowers go BK after their loan is 4+ (the minimum criteria for sale) but before the next debt sale.

[ira01]

I don't want to put words into Andrew's mouth but I read it where the borrower has filed, therefore getting a case number, but a few don't go through with it and get it fully discharged.

2IANALcents

How do you get that?  His original email stated:

This was a borrower who told us she was going to file bankruptcy, which kept her out of a couple of debt sales. Once we realized that she was not actually filing bankruptcy, we took the bankruptcy tag off of the loan . . . .

That is a very different situation than one where the borrower actually files BK, but doesn't complete it through discharge.  That latter situation is certainly not unheard of -- for example, sometimes the debtor fails to file the necessary documents during the course of the BK, resulting in the BK's dismissal.  But that isn't what Andrew's original email stated.

Perhaps what Andrew's talking about is the case in which a borrower has actually filed papers with the court, but the court has not yet notified all affected creditors.

I'm not seeing it -- his first email clearly stated that the borrower "told us" she was going to file BK but then didn't, while the second email stated that they obtain the case number (which requires that a BK had actually been filed).  I suspect that what he actually meant to say is that although they may ask for the case number, if Prosper is told that the filing is iminent, they treat it as having occurred.  If that is the case, however, then I would make two points: (1) told by whom (the borrower?  the borrower's purported attorney?  does Prosper verify that the "attorney" really is one?); and (2) in such anticipatory situations, Prosper should have a system in place to check to see if the BK was actually filed within some relatively short period of time (perhaps 2 weeks), and if not, Prosper should follow up and/or reinstate collections. 

[traveler505]

Andrew is not an attorney, and I don't necessarily expect precision from him when discussing legal matters.  (I don't expect it from Prosper's attorneys either, but that's another matter.) 

Perhaps he meant to type "phone number," or perhaps he meant the attorney's internal "file number." 

I don't know how quickly PACER is updated once a BK is filed, but I suspect that it is rather quick, and it's certainly a painless way to ascertain whether a BK has been filed.

[bamalucky]

I call Bullshit...You can't be fined until you are served that the borrower is in BK..

This company flies by the seat of their ass making shit up as they go along.

I call bullshit on Andrew too.I'm tired of this half ass company trying to blow smoke up lenders asses because their attorneys & employees are too stupid to figure out the actual laws!

[Mtnchick]

I will be more than happy to post the loans I have that are currently in BK (probably need to do this in the verified section) so those of you who deep google and have access to court documents can see if they've truly filed.

Seriously, if they are truly going by a borrower SAYING they are filing BK, I'm going to be royally PO'd.

[traveler505]

http://www.usdoj.gov/ust/eo/public_affairs/articles/docs/stay-02.htm

What is required to constitute a "willful" violation of the stay, for purposes of section 362(h), is subject to controversy.  The most that can be said with any degree of certainty is that each violation of the stay must be considered in its entirety, with due consideration to the particular facts.(3)  A willful violation does not require "specific intent" to violate the automatic stay; nor will a "good faith" belief that an action was not violative of section 362 preclude a finding that the action was, in fact, a "willful" violation.  Rather, the test is usually characterized in terms of whether a creditor took some collection action despite its knowledge that the debtor had filed a bankruptcy petition.(4)

However, there appear to be circumstances where a creditor can be forced to pay the debtor's attorney fees even if it had no knowledge of the BK filing:

And, as the Sixth Circuit Bankruptcy Appellate Panel noted in In re Mathews, bankruptcy courts have often awarded attorney fees as "remedies for 'technical' or 'inadvertent' violations of the stay . . . on various theories" when section 362(h) did not apply for lack of a willful violation and/or actual injury.  Id. 209 B.R. at 221 n.3 (collecting cases).

[bamalucky]

We seem to be on better footing with prosper now though..Instead of being scared by the borrowers,we seem to be scaring the hell out of them.

Maybe one day (years) from now,they will realize the lender is the true customer.

[bamalucky]

OMG..I didn't realize this was in the lobby..Feel free to delete my posts if you wish..

Seriously

[HollowOak]

OMG..I didn't realize this was in the lobby..Feel free to delete my posts if you wish..

Seriously

No need for deletion IMHO.

[Urbi_et_Orbi]

We seem to be on better footing with prosper now though..Instead of being scared by the borrowers,we seem to be scaring the hell out of them.

Maybe one day (years) from now,they will realize the lender is the true customer.

Perhaps the de facto lenders union (Pro$pers.org) is more organized and more willing to push back than Prosper anticipated?

[xraider]

Lender's union.  I like that. 

[cubbiesnextyr]

Lender's union.  I like that. 

 

2Mils would agree.