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Author Topic: Bankruptcy update  (Read 70922 times)

xraider

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Bankruptcy update
« on: January 12, 2011, 07:14:37 am »

In July, 2009, I contacted Prosper about one loan in ch 11 and one in ch 13 and asked for an update.  Here was the response then:

Quote
Dear [xraider],

Unfortunately, we do not have information as to when Prosper may begin receiving payments for loan#  7107. Prosper must receive notice from the bankruptcy court that the debt has been discharged before we are able to discharge the loan in our system.

Thank you for using Prosper.

For future reference, your Prosper support case number is 00363615.

Sincerely,
Prosper Customer Support

--------------- Original Message ---------------
From: [xraider]
Date: Wednesday, July 8, 2009, 11:47 AM


Dear [xraider],

Regarding loan# 7107, a payment plan has been reached which calls for unsecured creditors to receive 100% over 60 months. Loan# 16494 was converted from a Chapter 11 bankruptcy to a Chapter 7 on 6/5/09.

Please let us know if you have any further questions.

For future reference, your Prosper support case number is 00363589.

Sincerely,
Prosper Customer Support



A few weeks ago, I contacted Prosper again about Loan 7107 and another one which has been rotting in ch 13 for more than two years.  Following is the substantive response I received yesterday:

Quote
After my research and meetings I can supply you with the following information. Regarding loan 14855, unsecured creditors were to receive a pro rata share of 0%. There is no further information available on this loan.

Loan 7107 was very interesting and was where the majority of my research time was spent. Based on my review, allowed unsecured claims were to be paid not less than 100% over the 60 month plan. Obviously this was a surprise as there have been no payments posted to the loan since since the plans confirmation. What I found was that in 2008 Prosper missed the Proof of Claim date by 2 days. Due to the late filing our claim was objected to by the Trustee and that objection was subsequently sustained by the courts. The order sustaining the trustee's objection disallowed Prosper's claim in it's entirety.

The claim amount filed by Prosper was in the amount of $15506.20. It is my opinion that Prosper should make the Lenders on this loan whole because we missed the filing date. I have requested and received approval to do just that. While I haven't received confirmation of the date it will happen I can tell you that the plan is to post a payment in the amount of the back due 31 months of payments that would have been made on the Chapter 13 plan. Then beginning in February we will apply a monthly payment for the remaining 29 months of payments that would have been made on the plan.

Unfortunately I can't speak directly to why this particular bankruptcy was filed late as it was before my time with Prosper. I can tell you that it is our intent to ensure that each of these situations are managed appropriately and I am taking all necessary steps to ensure consistency and accuracy in bankruptcy filings. If you have any additional questions or please feel free to reply to this Email or contact me by phone

So, kudos to Prosper for responding and for doing the right thing, although this information should have been caught in response to my first inquiry more than a year ago.  But, this does show a new openness and a new willingness to address problems and concerns.

I urge everyone to check their bks and if you have ch 11 or 13s that haven't paid in a year or more, you may want to follow up with Prosper.

FWIW, this will about double my gain on Prosper, from about $37 to about $71.  Go me.
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yankeefan

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Re: Bankruptcy update
« Reply #1 on: January 12, 2011, 07:35:06 am »

Lobby?
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xraider

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Re: Bankruptcy update
« Reply #2 on: January 12, 2011, 07:35:56 am »

Fine with me.  It will give NA a pro-Prosper topic to post on.   :ninja:
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Xenon481

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Re: Bankruptcy update
« Reply #3 on: January 12, 2011, 07:50:23 am »

Quote from: Prosper
What I found was that in 2008 Prosper missed the Proof of Claim date by 2 days.

As we have always suspected, Prosper wasn't properly doing the paperwork on Bankruptcies and it has cost lenders many thousands of dollars! It is now Prosper's fiduciary duty to do a proactive review of ALL bankruptcies to see if they messed up any others.

I will be sending them a note asking them to do that on any BKs I have that have not made any payments.


And put this thread in The Lobby!

xraider

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Re: Bankruptcy update
« Reply #4 on: January 12, 2011, 08:40:04 am »

Xenon, I think you SHOULD ask Prosper about your stale bks.  I think Prosper needs to be reminded of its duties to us.

When I received yesterday's email, I had to roll my eyes at the 2009 response, when research then would have addressed the problem then.  Instead, I was blown off, which did NOT thrill me. 

Prosper really should go back and audit all non-7 bks.  We certainly don't have the tools available to us to check on our own.
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Mtnchick

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Re: Bankruptcy update
« Reply #5 on: January 12, 2011, 08:41:37 am »

+whatever for the Lobby.

There's a thread somewhere that lists a lot of BK13 that were sitting stagnant and I'm going to go through all mine and figure out what's what.

YAY .org for being the vehicle to finally get some response for this :)
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weiszguy

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Re: Bankruptcy update
« Reply #6 on: January 12, 2011, 09:44:53 am »

Quote
After my research and meetings I can supply you with the following information. Regarding loan 14855, unsecured creditors were to receive a pro rata share of 0%. There is no further information available on this loan.

Loan 7107 was very interesting and was where the majority of my research time was spent. Based on my review, allowed unsecured claims were to be paid not less than 100% over the 60 month plan. Obviously this was a surprise as there have been no payments posted to the loan since since the plans confirmation. What I found was that in 2008 Prosper missed the Proof of Claim date by 2 days. Due to the late filing our claim was objected to by the Trustee and that objection was subsequently sustained by the courts. The order sustaining the trustee's objection disallowed Prosper's claim in it's entirety.

The claim amount filed by Prosper was in the amount of $15506.20. It is my opinion that Prosper should make the Lenders on this loan whole because we missed the filing date. I have requested and received approval to do just that. While I haven't received confirmation of the date it will happen I can tell you that the plan is to post a payment in the amount of the back due 31 months of payments that would have been made on the Chapter 13 plan. Then beginning in February we will apply a monthly payment for the remaining 29 months of payments that would have been made on the plan.

Unfortunately I can't speak directly to why this particular bankruptcy was filed late as it was before my time with Prosper. I can tell you that it is our intent to ensure that each of these situations are managed appropriately and I am taking all necessary steps to ensure consistency and accuracy in bankruptcy filings. If you have any additional questions or please feel free to reply to this Email or contact me by phone

Do you know who at Prosper wrote this?
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Urbi_et_Orbi

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Re: Bankruptcy update
« Reply #7 on: January 12, 2011, 10:05:08 am »

Interesting update...and mildly encouraging. 

animalhouse

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Re: Bankruptcy update
« Reply #8 on: January 12, 2011, 10:20:45 am »

I think this is a positive step from Prosper but ...

How hard would it be to put some code in thier programs to find the notes in Bankruptcy which haven't paid in the past year (keep the code in place and run a monthly report)?  Then they could check up on them.  Why does it fall once again on the Lender to keep inquiring on the status of the notes?  Prosper gets paid to service the notes, and IMO this is part of the service the Lenders pay for.
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Mtnchick

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Re: Bankruptcy update
« Reply #9 on: January 12, 2011, 10:25:59 am »

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Xenon481

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Re: Bankruptcy update
« Reply #10 on: January 12, 2011, 11:34:32 am »

I have sent the following message to Prosper via the Contact Us page on their site.

Quote from: Xenon481 to Prosper
It has come to light that Prosper has on at least one occasion, not upheld it's fiduciary duty to Lenders by note properly filing a Proof of Claim for a Bankruptcy.

http://www.prospers.org/forum/bankruptcy_update-t22912.0.html

Due to this, I am requesting that the following loan(s) of which I have partially purchased that are currently in some form of Bankruptcy be reviewed to ensure that all Prosper filed all the proper forms in a timely manner. I also request any information available on the current status of the bankruptcy proceedings on these loans as well.

Loan #3339
Loan #3475

Those are the only two loans that I currently have that are not displayed as having been discharged under Chapter 7.

Mtnchick

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Re: Bankruptcy update
« Reply #11 on: January 12, 2011, 11:50:44 am »


Those are the only two loans that I currently have that are not displayed as having been discharged under Chapter 7.

I am on the first page of 50 (out of 155) chargeoffs and found one where Chapter 7 was filed, but no info regarding discharge as of Sept 08.  :ninja:
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ira01

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Re: Bankruptcy update
« Reply #12 on: January 12, 2011, 11:59:14 am »

Quote from: Prosper
What I found was that in 2008 Prosper missed the Proof of Claim date by 2 days.

As we have always suspected, Prosper wasn't properly doing the paperwork on Bankruptcies and it has cost lenders many thousands of dollars! It is now Prosper's fiduciary duty to do a proactive review of ALL bankruptcies to see if they messed up any others.

+1.  Why is it the lenders responsibility to ask Prosper, on a case-by-case basis, whether Prosper screwed up?  Now that Prosper knows it screwed up at least 1 BK, it has a duty to go back and investigate EVERY Ch 11 and 13 BK to see if this was an endemic problem.  While Prosper agreeing to make the lenders whole on the one BK xraider identified for it is better than a poke in the eye with a sharp stick, I hardly think that deserves much kudos -- considering that Prosper's legal obligation to do so is 100% crystal clear.  Meanwhile, it sticks its head in the sand and hopes that no one identifies any other similar Prosper screw-us.

In addition, Prosper owes the lenders on xraider's loan interest on that 31 months of back payments.  And since Prosper loves to advertise its supposed 10.4% returns, that should be the interest rate Prosper uses in calculating the amount of interest to pay lenders.   :ninja:
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xraider

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Re: Bankruptcy update
« Reply #13 on: January 12, 2011, 12:10:17 pm »

I give Prosper credit for looking at this and coming clean, unlike the last time I asked.  I would bet that Prosper will re-examine all of the non-discharged, non-paying bks, and will take more care on future bks.

I posted so lenders would know to check their own portfolios and follow up as appropriate.
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ira01

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Re: Bankruptcy update
« Reply #14 on: January 12, 2011, 12:20:53 pm »

I have three Ch.13 BK's -- not one has made a single payment:
Loan 18252  Listing 185107  filed 1/11/10
Loan 15955  Listing 143499  filed 4/19/10
Loan 13217  Listing 118349  filed 9/8/08   >:(

I also have two Ch. 7 BK's filed long ago with no discharge yet:
Loan 16015  Listing 148555  filed 2/27/10
Loan 13033  Listing 115947  filed 8/21/09

I wonder how many of these Prosper has screwed up?  Time to email Prosper in an effort to find out (I'm sure Prosper will be overjoyed to hear from me  :ninja:).  

ETA:  I just emailed Prosper.  We'll see what they say.  Also, +2 (or whatever) on Lobby -- this thread is 100% Lobby-worthy.
« Last Edit: January 12, 2011, 12:27:48 pm by ira01 »
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