To buy BK or Not buy Bk

[Chris Seveney]

I am a big fan of acquiring notes in chapter 13 bankruptcies. I was curious if there are others out there who also like Ch13 Bk notes or are there others who have questions regarding ch 13 -

If you know how to guide your way through the paperwork you can learn a ton about the borrower

Ps: please note I am referring to 1st position notes.

[Bob Malecki]

I find BK13 notes great as long as our borrower completes the plan. Great upside if you buy the note with some remaining pre-petition arrears payments in addition to the post petition arrear payments. Now, if the borrower stops making the payments or causes the funding to stop to the trustee, then we get into expenses and the cashflow faucet stops. Currently we have filed MFR on 4 notes in our portfolio, then we start foreclosure in hopes to get the borrower to the table. Because its a BK, we can't just call the borrower to engage them in a loss mit dialog, we have to pay our counsel to take action.

So, in summary, great upside potential with a borrower serious in getting financially stabilized, but pricey if the borrower decides to go down the ignorance rabbit hole!