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[leporello]

Is Andrew's email andrew@prosper.com or something fancier? Since Cubbie won his bet and he's still there, I'm going to send this to him - surely I can get a reasonable response from him.

It is andrew@prosper.com, yes.

Thanks, Lemon

"You're welcome, Mouton", he said sheepishly.

[Mtnchick]

Andrew just rokks.....

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, but it was too late to be included in the latest sale. According
to our debt sale folks, we're going to try to include it retroactively
in the last debt sale. Failing that, we'll include it in the next one.

(Also, FYI, I sent you this response through our CS system so that we
would have a record of it there. So you'll receive this message twice.)

Best regards,
Andrew

Though his wording prompted me to respond:

THANK YOU, THANK YOU, THANK YOU!

Question though - did she just TELL you she was going to file BK or did she actually
file it? I'm really hoping you guys aren't just taking the word of someone
saying they are going to file......

Thanks again!

[ira01]

Andrew just rokks.....

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, but it was too late to be included in the latest sale. According
to our debt sale folks, we're going to try to include it retroactively
in the last debt sale. Failing that, we'll include it in the next one.

(Also, FYI, I sent you this response through our CS system so that we
would have a record of it there. So you'll receive this message twice.)

Best regards,
Andrew

Though his wording prompted me to respond:

THANK YOU, THANK YOU, THANK YOU!

Question though - did she just TELL you she was going to file BK or did she actually
file it? I'm really hoping you guys aren't just taking the word of someone
saying they are going to file......

Thanks again!

As I've said many times before, Andrew is the only person at Prosper who appears to me to be competent and diligent (and to have good judgment to boot).  But it shouldn't take an email to Andrew for CS to provide reasonable and accurate responses to straightforward inquiries.

And I agree with your follow-up question.  A borrower saying he/she is going to file BK is no more relevant than the borrower telling Prosper that he/she intends to win the lottery next year.  Either a BK petition has been filed or it hasn't.  If Prosper hasn't received notice of a BK filing, it should proceed accordingly.  Now perhaps Prosper has to certify to the JDB that none of the borrowers has notified it of an imminent BK.  But that should only matter if the borrower's statement to Prosper was so close in time that official notice might not yet have been received.  So depending on the timing, that could have caused the loan to miss 1 debt sale.  But it certainly shouldn't have affected "a couple" of debt sales. 

[lenderguy]

As I've said many times before, Andrew is the only person at Prosper who appears to me to be competent and diligent (and to have good judgment to boot).  But it shouldn't take an email to Andrew for CS to provide reasonable and accurate responses to straightforward inquiries.

I'll "me too" that.  I worry a bit whether or not that Andrew is providing "special favors" for us by disseminating that information.  Further, if he's not, then why can't it be publicly available from CS?

[leporello]

As I've said many times before, Andrew is the only person at Prosper who appears to me to be competent and diligent (and to have good judgment to boot).  But it shouldn't take an email to Andrew for CS to provide reasonable and accurate responses to straightforward inquiries.

I'll "me too" that.  I worry a bit whether or not that Andrew is providing "special favors" for us by disseminating that information.  Further, if he's not, then why can't it be publicly available from CS?

Maybe because the generic CS are clueless.

[Mtnchick]

And I agree with your follow-up question.  A borrower saying he/she is going to file BK is no more relevant than the borrower telling Prosper that he/she intends to win the lottery next year.  Either a BK petition has been filed or it hasn't.  If Prosper hasn't received notice of a BK filing, it should proceed accordingly.  Now perhaps Prosper has to certify to the JDB that none of the borrowers has notified it of an imminent BK.  But that should only matter if the borrower's statement to Prosper was so close in time that official notice might not yet have been received.  So depending on the timing, that could have caused the loan to miss 1 debt sale.  But it certainly shouldn't have affected "a couple" of debt sales. 

Yeah, with 8 BKs sitting on my accounts, they sure as heck better have been FILED and not just P-----r being TOLD by the borrower they were going to file. This could be a new MNH for Trav

[Mtnchick]

From Andrew (I swear he could run that place on his own)

The way we handle "threats" of bankruptcy (for lack of a better word)
is
that we ask the borrower for the name of their BK attorney and their
case number. Then we call the attorney and confirm that the person has,
in fact, started the process. As soon as we've confirmed with the
attorney, we'll mark the loan as BK.

99% of the time, the bankruptcy continues as promised. The other 1%,
something like this happens, and the default is delayed.

The reason we are so conservative (that is, marking loans as BK before
the borrower may have actually filed) is because the penalty for dunning
(requesting payment from) a borrower who has filed BK is quite high.

Hope that helps explain it.

Andrew

That's cool with me and makes sense.

[ira01]

From Andrew (I swear he could run that place on his own)

The way we handle "threats" of bankruptcy (for lack of a better word)
is
that we ask the borrower for the name of their BK attorney and their
case number. Then we call the attorney and confirm that the person has,
in fact, started the process. As soon as we've confirmed with the
attorney, we'll mark the loan as BK.

99% of the time, the bankruptcy continues as promised. The other 1%,
something like this happens, and the default is delayed.

The reason we are so conservative (that is, marking loans as BK before
the borrower may have actually filed) is because the penalty for dunning
(requesting payment from) a borrower who has filed BK is quite high.

Hope that helps explain it.

Andrew

That's cool with me and makes sense.

Actually, this doesn't make sense to me.  Andrew said they get the name of the BK attorney and the case number.  Well, the case number is assigned by the clerk when a BK petition is filed with the court.  So if the BK wasn't filed, there couldn't be a case number.  Moreover, he said they speak with the attorney.  Is he suggesting that the attorney lied about the BK petition having been filed?  I find that very hard to believe (that would get the lawyer in trouble with the State Bar).  OTOH, if the attorney said "no petition has been filed yet, but we plan to soon," then it is not a violation of the automatic stay to take collection activity. 

Furthermore, I'm pretty sure that the "quite high" penalty for violating the automatic stay doesn't take effect until the creditor knows that the BK was filed (by being served with the papers, or by being served by the BK court which uses the borrowers list of creditors to notify them all of the BK). 

[Mtnchick]

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

[HollowOak]

2IANALcents

Eeeww.... you can keep those.   

[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.

[leporello]

From Andrew (I swear he could run that place on his own)

The way we handle "threats" of bankruptcy (for lack of a better word)
is
that we ask the borrower for the name of their BK attorney and their
case number. Then we call the attorney and confirm that the person has,
in fact, started the process. As soon as we've confirmed with the
attorney, we'll mark the loan as BK.

99% of the time, the bankruptcy continues as promised. The other 1%,
something like this happens, and the default is delayed.

The reason we are so conservative (that is, marking loans as BK before
the borrower may have actually filed) is because the penalty for dunning
(requesting payment from) a borrower who has filed BK is quite high.

Hope that helps explain it.

Andrew

That's cool with me and makes sense.

Maybe I'm missing something here (as usual) but if all they do is call the attorney, what prevents the BK-borrower from providing a bogus phone number and law firm name for the attorney, and the "attorney", who is actually the borrower's brother-in-law (or whatever) just confirms whatever he's supposed to confirm?

[Mtnchick]

Well I guess the next step would be to dig up as much PII as we can on those currently in BK and then see if there's actually a case filed.

[Erasmus_Darwin]

2IANALcents

Eeeww.... you can keep those.   

http://www.youtube.com/watch?v=3Ljt0hFMp2g

[Capital_Finance_Group]

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.