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[112233]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default? Maybe there should be some sort of "Prebankruptcy Default" status so the value and return for this loan can be removed from the performance stats immediately ...

Also, do we have a thread to keep track of these filings somewhere? I didnt see any. We can use this thread if not.

[hoosier500]

I have one that made only a first payment in Jul 07 has said 4+ late/bankruptcy for a long time, still no default.

http://www.prosper.com/lend/listing.aspx?listingID=146879

Had another that made the first two payments Aug and Sep 07 and eventually said bankruptcy - then said defaulted No value in Apr 08.

http://www.prosper.com/lend/listing.aspx?listingID=160722

I have other examples but I need to go get a tissue at this moment.....

[Mark12547]

It depends on if the bankruptcy actually goes through and, if so, how much Prosper will get, that determines the value of the loan. Until then, Prosper won't know the value of the loan. If the loan is discharged in bankruptcy, then it will be worth $0 and you can claim a short-term capital loss of the principal balance for the loan.

[LoanChimp]

my most recent two bankruptcy tags shown on loans turned into defaults just recently (see my latest blog post).

The other 6 bankruptcies are older, and continue to fester in my account...

[112233]

It depends on if the bankruptcy actually goes through and, if so, how much Prosper will get, that determines the value of the loan. Until then, Prosper won't know the value of the loan. If the loan is discharged in bankruptcy, then it will be worth $0 and you can claim a short-term capital loss of the principal balance for the loan.

fair enough. how do lenders get ahold of this filed bankruptcy information for themselves then? in another thread someone stated a BK was filed after <15 days late. obviously you cant expect a payment with pending BK, so the expected return on this <15 days late loan doesnt make sense.

looking at the loan object for Prosper's data export, I see no field that has this information. My guess is Prosper has a field called something like "CollectionsStatus" in their internal loan table. This field holds values such as "In Collections", "Bankruptcy Filed", etc .. It should be added to the data export so at least 3rd party sites can make use of it in their ROI calculations.

http://www.prosper.com/Downloads/Services/Documentation/ProsperDataExport_Details.html

[Xenon481]

How long does it take for the status switch to default?

I have a bankruptcy that is listing as 4+ Months Late even though the last payment was in January of 2007.

[112233]

How long does it take for the status switch to default?

I have a bankruptcy that is listing as 4+ Months Late even though the last payment was in January of 2007.

you got to be kidding me! almost 1.5 years ago ?!

[112233]

if Prosper doesnt provide a field maybe the BK filed listings can be collected into a thread and extracted by one of Prosper Monkey's relatives

[LoanChimp]

if Prosper doesnt provide a field maybe the BK filed listings can be collected into a thread and extracted by one of Prosper Monkey's relatives

Unfortunately they're all busy coding for facebook...

http://www.newtechusa.com/ppi/main.asp

[Fred93]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default?

It could literally take forever.

Prosper doesn't transition the loan to "default" until the bankruptcy is COMPLETE.  No one knows how long this will take.  I have one that has been in this limbo for 16 months.

[112233]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default?

It could literally take forever.

Prosper doesn't transition the loan to "default" until the bankruptcy is COMPLETE.  No one knows how long this will take.  I have one that has been in this limbo for 16 months.

shouldnt a loan default after 4 months regardless of whether the bankruptcy happens or not? do you get some sort of forbearance on your debts while it is being determined if they can be discharged?

[ira01]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default?

It could literally take forever.

Prosper doesn't transition the loan to "default" until the bankruptcy is COMPLETE.  No one knows how long this will take.  I have one that has been in this limbo for 16 months.

shouldnt a loan default after 4 months regardless of whether the bankruptcy happens or not? do you get some sort of forbearance on your debts while it is being determined if they can be discharged?

Pretty much.  The mere filing of a BK petition serves as an automatic stay of all collections activities.  This stay is actually akin to a federal court injunction.  If a creditor who has notice of the BK filing undertakes any collections activities (without first obtaining leave of the BK court), that creditor is in deep shit -- they can be charged with contempt of court, and serious sanctions are routinely granted for violations of the automatic stay.  The automatic stay lasts indefinitely during the course of the BK (it disappears if the BK is dismissed, and it is replaced by a permanent injunction if a discharge is granted).  A creditor can seek to have the stay lifted as to them in certain circumstances, which are most commonly related to secured debt.  Most chapter 7 BKs used to only last around 6 months, but I'm not sure if that is longer now either as a result of the changes to the BK code a couple years ago, or due to the increase in the number of filings (which might increase the court's workload sufficiently to slow things down).  I'm not sure how long a typical chapter 13 lasts (and more debtors are pushed into 13's now under the new BK code), but the repayment plan stretches 5 years IIRC. 

[112233]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default?

It could literally take forever.

Prosper doesn't transition the loan to "default" until the bankruptcy is COMPLETE.  No one knows how long this will take.  I have one that has been in this limbo for 16 months.

shouldnt a loan default after 4 months regardless of whether the bankruptcy happens or not? do you get some sort of forbearance on your debts while it is being determined if they can be discharged?

Pretty much.  The mere filing of a BK petition serves as an automatic stay of all collections activities.  This stay is actually akin to a federal court injunction.  If a creditor who has notice of the BK filing undertakes any collections activities (without first obtaining leave of the BK court), that creditor is in deep shit -- they can be charged with contempt of court, and serious sanctions are routinely granted for violations of the automatic stay.  The automatic stay lasts indefinitely during the course of the BK (it disappears if the BK is dismissed, and it is replaced by a permanent injunction if a discharge is granted).  A creditor can seek to have the stay lifted as to them in certain circumstances, which are most commonly related to secured debt.  Most chapter 7 BKs used to only last around 6 months, but I'm not sure if that is longer now either as a result of the changes to the BK code a couple years ago, or due to the increase in the number of filings (which might increase the court's workload sufficiently to slow things down).  I'm not sure how long a typical chapter 13 lasts (and more debtors are pushed into 13's now under the new BK code), but the repayment plan stretches 5 years IIRC. 

is declaring a loan in default considered a collection activity? also, (for example) if they enter the filing after 1 month late and exit 5 months later, is the loan 1 or 6 months late if the BK is dismissed?

[ira01]

I logged in tonight. There was a notice that this borrower filed for bankruptcy and collections have ceased.
http://www.lendingstats.com/listings/59070

However, the status for this borrower is still 2 months late. How long does it take for the status switch to default?

It could literally take forever.

Prosper doesn't transition the loan to "default" until the bankruptcy is COMPLETE.  No one knows how long this will take.  I have one that has been in this limbo for 16 months.

shouldnt a loan default after 4 months regardless of whether the bankruptcy happens or not? do you get some sort of forbearance on your debts while it is being determined if they can be discharged?

Pretty much.  The mere filing of a BK petition serves as an automatic stay of all collections activities.  This stay is actually akin to a federal court injunction.  If a creditor who has notice of the BK filing undertakes any collections activities (without first obtaining leave of the BK court), that creditor is in deep shit -- they can be charged with contempt of court, and serious sanctions are routinely granted for violations of the automatic stay.  The automatic stay lasts indefinitely during the course of the BK (it disappears if the BK is dismissed, and it is replaced by a permanent injunction if a discharge is granted).  A creditor can seek to have the stay lifted as to them in certain circumstances, which are most commonly related to secured debt.  Most chapter 7 BKs used to only last around 6 months, but I'm not sure if that is longer now either as a result of the changes to the BK code a couple years ago, or due to the increase in the number of filings (which might increase the court's workload sufficiently to slow things down).  I'm not sure how long a typical chapter 13 lasts (and more debtors are pushed into 13's now under the new BK code), but the repayment plan stretches 5 years IIRC. 

is declaring a loan in default considered a collection activity? also, (for example) if they enter the filing after 1 month late and exit 5 months later, is the loan 1 or 6 months late if the BK is dismissed?

Unfortunately, I'm not a BK expert.  But I don't think that treating a loan in BK as if in default for purposes of accounting would be considered as violating the automatic stay if there were no effects on the borrower (for example, in the way the debt was reported to the CRA's).  As for the second part of your question, I think that if the BK is dismissed, it is basically like it never happened (for these purposes).  So the loan would be 6 months late.  But, TINLA, YMMV, etc. 

[Senator]

Has anyone ever got more than $0 on a bankruptcy filing?

I currently have 3 listed as "Bankruptcy":

4+ months late: http://www.prosper.com/lend/listing.aspx?listingID=3703

3 months late: http://www.prosper.com/lend/listing.aspx?listingID=85616

1 month late: http://www.prosper.com/lend/listing.aspx?listingID=4217