[Dec 15 2019] Foreclosure Saga - http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=FBTCV196091825S

Will DSP file his bankruptcy before MidFirst Bank gets their hands on his WAkhando?

  • Yes

    Votes: 79 53.4%
  • No

    Votes: 69 46.6%

  • Total voters
    148

Proper Pangolin

Khantent Recycler
kiwifarms.net
Phil finally confessed to the foreclosure and is filing for bankruptcy.

Screenshot_20191215-083407_Chrome.jpg


Looks like a foreclosure crisis is on the verge of happening. I wonder if his tips goal for next week will be for about 16k.

(Added by @actually on 12-15-19)
Phil's mortgage was originally about $128k. After 8 or 9 years, he somehow still owes $101k+. Midfirst Bank took possession of the mortgage a few months ago and is foreclosing.

Looks like Phil actually wasn't paying.

Direct link to case
Demand Letter Tracking Number Link

What can Phil do about it?:

The way I see it he has the following two strategic options at this stage:

Take Control - Deal with it like a man and accept that sometimes work pays

  1. He contacts the creditor, explains he has a highly valuable asset with a large amount of equity
  2. He offers to allow creditor to attach a lien to it in exchange for delaying foreclosure for a short, set period of time
  3. He sells the condo, pays off the WA lender mortgage, pays off the CT lender mortgage, and walks away with at least $125K in his pocket because if he declares bankruptcy he will get that much so he can negotiate to get that much or more to quickly pay the creditor with no fuss and reduced legal expenses
  4. He pays off all his credit card debt and still has like $25-50K in the bank
  5. He gets to continue making $9,000 per month
    1. He is no longer spending $1500 on a CT condo he doesn't live in
    2. He is no longer spending a couple thousand dollars on old credit card debt
    3. He saves up money and puts it into retirement savings and future home purchase savings
  6. He moves into some one or two bedroom apartment
  7. He buys a modest home with his home purchase savings once the local housing market calms down
His credit score goes through the roof as he has extensive credit history, now no debt, and no foreclosure on his record.

No Strategy - Hope it goes away on its own like everything else in his life
  1. Creditor wins lawsuit, gets like $105K as mortgage principal and interest and like $15K attorney's and other fees
  2. Creditor converts judgement to Washington and begins attaching it to his stuff (lien on the condo, emptying bank accounts, redirecting payments, etc)
  3. He talks to a lawyer because he's unable to pay his bills, condo, car, or old debt
  4. Lawyer advises him that he now has the following two options that he should utilize in tandem
    • Negotiate lower monthly garnishments
    • Incorporate and employ himself to benefit from wage garnishment protection
    • Declare bankruptcy to give himself enough money each month to pay his bills, some housing, and some transportation
The time for negotiation has probably passed at this point in No Strategy.

If he incorporates his business the creditor is likely to take control of his stock and become a shareholder, but if Kat legitimately invested money into the company she could remain a majority shareholder to DSP and therefore the creditor. I think that would be an acceptable method of maintaining control. If the creditor does gain majority control, it will be unlikely to dissolve or sell the company because it has no real cash value; it's value is in its ongoing operation. The creditor will be more likely to replace him as a member of the board of directors and as President. If they do this they can vote to begin compensating him with dividends instead of wages to bypass wage garnishment protection. If they don't replace him as President and take away his authority to spend the company's money he could just spend the company's money until there's nothing left to distribute in a dividend.

If his business continues to pay him only in wages the creditor will only be able to garnish the income his newly formed separate business entity gives to him as wages and not the income the business itself is being given by others; it's his own debt, not the business'. The creditor would be limited to garnishing 25% of his wages after some mandatory deductions. If he declares bankruptcy the trustee can only take and redistribute money being given to him by the business and not money being given to the business itself.

Bankruptcy will have obvious benefits to both parties. It will stop all efforts by creditors (plural) to get money from DSP's accounts, payers, etc. It will also require DSP to begin adhering to a strict budget and give the rest of his income to the trustee to distribute among his credits according to the law and any court instructions. It looks like he has equity that very much exceeds the exemptions, so it will require DSP to sell his condo and his car and find alternative housing and transportation. He will get the first $125K after the original WA lender is paid the mortgage balance and his creditors will get the rest. He can use that money to make initial payments on a home and a car that is below the exemption; if he doesn't spend it he will lose it to the same bankruptcy trustee a while later, I don't know how much of a grace period he has.

His credit score is tanked and he has to adhere to this payment plan for at least 3-5 years, possibly more if he files under Chapter 11 instead of 13 and his creditors all vote to extend it. I don't think filing under Chapter 11 is a good move for him for that reason alone.

---

I'd like feedback on what people think of these two strategies.

---

By request another option follows:

Do Nothing - Stick your head in the sand
  1. Creditor wins lawsuit, gets like $105K as mortgage principal and interest and like $15K attorney's and other fees
  2. Creditor converts judgement to Washington and begins attaching it to his stuff (lien on the condo, emptying bank accounts, redirecting payments, etc)
  3. He's unable to pay his bills, condo, car, or old debt
  4. He gets foreclosed on a second time, this time in WA
  5. He moves into some one or two bedroom apartment
  6. The WA second condo is sold and he gets a bunch of money after the sale and part of it gets seized to pay off the CT debt
  7. He gets to continue making $9,000 per month
    1. He is no longer spending $1500 on a CT condo he doesn't live in
    2. He is still spending a couple thousand dollars on old credit card debt
    3. He starts spending money like a stupid person again
  8. He never buys a home again out of shame, confusion, and fear
His credit score is tanked and he has nothing to show for it.
 
Last edited by a moderator:

TheKatIsNowGone

Praise the Sun!
kiwifarms.net
English isn't my first language and I'm pretty hung over. Can someone please explain what I'm looking at?
I'm not good with legalese but it at the very least says that Phil is being taken to court over not paying for the Khando in Connecticut. File date was late November and last update was the 6th so this is a relatively new occurrence that is still going on.

I wonder though if someone who knows the law better can clarify more. I'm very curious about the motions section as I imagine it could tell us a lot more.
 

Sparkletor

kiwifarms.net
English isn't my first language and I'm pretty hung over. Can someone please explain what I'm looking at?
A month or two ago, Midfirst Bank bought Phil's mortgage from his original lender. I forget the name, it's in the finance thread. Well it looks like Phil hasn't been paying his mortgage and Midfirst is suing him to take possession of the condo.

Will he still owe money? Possibly. If the value of the condo is less than the amount he owes it is called a "deficiency". Phil will have to pay the balance.

Edit to add: Forclosure usually begins 3 to 6 months after the homeowner becomes "delinquent" or stops paying. This means he probably wasn't lying in April when he said his plan was to just stop paying for the condo. Well played!
 
I'm not good with legalese but it at the very least says that Phil is being taken to court over not paying for the Khando in Connecticut. File date was late November and last update was the 6th so this is a relatively new occurrence that is still going on.

I wonder though if someone who knows the law better can clarify more. I'm very curious about the motions section as I imagine it could tell us a lot more.
Huh... It’s almost like not selling his old condo was a bad idea.
 

twattycake

True & Honest Fan
kiwifarms.net
English isn't my first language and I'm pretty hung over. Can someone please explain what I'm looking at?


I'm not good with legalese but it at the very least says that Phil is being taken to court over not paying for the Khando in Connecticut. File date was late November and last update was the 6th so this is a relatively new occurrence that is still going on.

I wonder though if someone who knows the law better can clarify more. I'm very curious about the motions section as I imagine it could tell us a lot more.

@TheKatIsNowGone and @Sparkletor were spot-on, just a bit more to add:

If you look about 2/3rds down the page, he is listed as "non appearing": Unless he gets in there very soon, the bank can ask the court to rule in their favor and take the condo without further proceedings (default judgment).

What comes next? He might owe the balance on the mortgage, but the big issue is that his credit score is going to be hosed. Foreclosure, bankruptcy, and eviction are all catastrophic for one's credit score and don't come off the report for 7 years. This also puts a pin in his plans to refinance the WAKhando-the first thing any bank will do when you ask for a refinancing is pull your credit report.

Other legal eagle kiwis: Could the bank holding the Renton mortgage raise Phil's interest rates in response to this? I know most mortgages have a clause saying they can adjust the rate every X number of years, but can they do it on the spot because of the foreclosure in CT?
 
Last edited:

twattycake

True & Honest Fan
kiwifarms.net
Quick recap beyond the OP:

* The attorney for the bank sent Phil a foreclosure notice including a return receipt (confirmation that he received it) to his WA address on 20 November. He didn't appear at the hearing or have an attorney appear on his behalf and it looks like he did not submit the return receipt either.

* Phil owes $101,679.44 before penalties and fees while the property is worth about $70,000. He will still be liable for the difference even if he just ignores the foreclosure.

* The town + county government and condo board also claim Phil has been delinquent in paying them. Expect a follow-up lawsuit if the bank wins this one.

* The condo board is also listed as a co-defendant. If they're held liable for some amount of Phil's debt, they might be entitled to sue him to recover the money in a follow-up case.

* Foreclosure is second only to bankruptcy in destroying your credit. If this goes through, he can forget about refinancing the WA mortgage.

What I don't know, and what we'd need an actual lawyer to tell us, is whether they can garnish his earnings or file a lien on the WA property.

tl,dr: :story: GRAB THE POPCORN :story:
 

Proper Pangolin

Khantent Recycler
kiwifarms.net
Quick recap beyond the OP:

* The attorney for the bank sent Phil a foreclosure notice including a return receipt (confirmation that he received it). He didn't appear at the hearing and it looks like he did not submit the return receipt either.

* Phil owes $101,679.44 before penalties and fees while the property is worth about $70,000. He will still be liable for the difference even if he just ignores the foreclosure.

* The town + county government and condo board also claim Phil has been delinquent in paying them. Expect a follow-up lawsuit if the bank wins this one.

* The condo board is listed as a co-defendant. If they're held liable for some amount of Phil's debt, they might be entitled to sue him to recover the money in a follow-up case.

tl,dr: GRAB THE POPCORN
I can't wait to hear him try to spin this getting uncovered by trolls as a direct attack. Good luck getting away with blaming anyone else for this screw up Phil
 

gaarashatan

kiwifarms.net
If he wasn’t paying, that means he had an extra 1200-1500 a month to do whatever with. But of course he wouldn’t tell his fans that. He still needs their money.
whaaa, nooooo he needed that money for the current house taxes DOOD!

but honestly, this whole scenario just goes to show phil doesnt give two shits about paying his bills or clearing his debt
he doesnt give two shits about downsizing and living an affordable means
he doesnt give two shits about how much he has to squeeze the financial life out of his fans so he can keep living large while ignoring the consequences
and honestly, i dont give two shits about his fans anymore.

i hope this leads to serious repercussions and i get to see phil do one last endless major beg before hes homeless
 

Mr. Brown

kiwifarms.net
$101k tip goal incoming.

Everytime he has spoken about this it's like he believes he can just stop paying it and they will take the condo and that's the end of it. I don't think he has any understanding at all that they will take the condo and probably his current home to recover the other $30k + fees.

It will probably end up being far more than $30k, banks don't sell foreclosure homes for market rate. They want quick sales and Phil is responsible for the rest.
 

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