I owner financed my farm for $699,000. I missed a few payments and the owner filed foreclosure. I offered part of the payments but she refused. I filed chapter 13 but she was granted a stay. The farm is now set for public auction in 3 weeks. I use the farm as a wedding venue, can I convert to a chapter 11? Will converting reverse the stay or put it on hold? In a chapter 11 can I show where the owner has contacted my competitors, other creditors, and used the internet to slander me? Will I be able to crunch down the amount owed since the farm is now only worth $350,000?
2 Answers from Attorneys
Unfortunately, once the stay is lifted, it is gone. Converting to a new chapter does not reinstate it.
Your slander/defamation of character claims woudl nto offset the claim. You can sue the seller and see if you can leverage a deal.
Also, Chapter 11 should NEVER be filed pro se , it si so comoplicated many experianced bankruptcy attorneys won't handle it.
There is a lot of unknown information in the question. I assume that you have income and that your Chapter 13 plan provided for a cure. Your mortgagee was granted a lift stay. These are not often granted because the whole purpose of bankruptcy is to stop foreclosure actions and allow the debtor to cure and otherwise get back on his feet. Thus your plan must not have met the requirements of the code and otherwise could not be shown to be amended to satisfy the code requirements. Your lawyer should have given you a detailed description of what is needed and why the court granted the stay relief. Inherent in the question is the suggestion you intended to strip the lien to the fair market value on the premise that this is a commercial property. Of course, one cannot strip down a first priority mortgage on property used as a residence. The issue of the primary use of the property should have been litigated and ruled upon by the court in connection with plan consideration and or the stay relief hearing. You could refile or convert to a Chapter 11, but it does not offer more relief than the Chapter 13, except you could cure over a longer period than 5 years. Virtually all other options are available to the Chapter 13 debtor. The court could reimpose the Automatic Stay, but it would require a strong showing of plan feasibility and a good reason why the new plan or information was not already given to the judge who would have to reverse himself to reimpose the stay. Filing a new bankruptcy does impose the stay again, however you must file a motion promptly to explain why the stay should not be lifted as it automatically is on multiple filings. You should have the answers to your questions from your current lawyer. If not, you should seek new counsel. If the owner used a wide spread written vehicle to defame you it is called libel. It is a separate cause of action and could be litigated in a separate action or as an adversary proceeding in the bankruptcy. It is not reason for the court to change his/her ruling on the other core bankruptcy issues. Since it owner financed and in NC there cannot be a deficiency judgment against you for the difference between the note and the amount the farm brings at the sale, thus there is no offset factor. You never want to litigate for a reason other than the object of the suit. Abuse of process is a tort just the same as libel.