BK Case Study: Bob Whitfiled, NFL Star & Real House Husband of Atlanta, Chapter 13 Bankruptcy for Note Investors. Note investor Sandor Lau goes into detail on Chapter 13 bankruptcy for note investors with specific documents. Bankruptcy is one of the most complicated factors affecting investors in distressed debt, mortgages, notes, loans... Understanding how it works can help you be a better investor and solve problems to create positive solutions for homeowners, investors, and the economy. This is real estate investing taken to the next level, without tenants, toilets, or termites.
I learn best from specific studies like the ones my mentor Gordon Moss teaches. But in note investing, we're dealing with real human beings and very private information about their debts, credit, and personal finances. I know I can add value for other investors sharing my experiences dealing with borrowers who have done bankruptcy. And I need to disclaim here I'm not an attorney, accountant, dentist, or pro wrestler. If you want advice in any of those fields, please seek it from the professional of your choice.
Unlike personal credit, bankruptcy is available on public records through US bankruptcy courts, and since the mid-2000s, us usually accesible online through Pacer.gov where for a small fee you can look up and download case documents.
While in many cases bankruptcy removes borrowers' personal responsibility to pay their debts, it does not always remove a lien, and thus the ability of a lender to foreclose on a property owned by the borrower if the borrower fails to pay. In chapter 13 reorganization bankruptcy, if borrowers can prove to the court that their personal residence is worth less than the debts owed against it, they can cram down (reduce the balance of) that loan, or in the case of junior loans, strip, or avoid the lien entirely. Upon completing a 3-5 year payment plan through the court. Most bankruptcy filers are dismissed from court for failure to meet their obligations.
Bob Whitfield III was an NFL football player with the Atlanta Falcons, Jacksonville Jaguars, and New York Giants who earned the nickname Head Butt Bob for his on-field performance. He was also married to Real Housewives of Atlanta star Shereé Whitfield.
From a note investor's perspective, this case is strikingly similar to what we see all the time. Mr. Whitfield stpped paying his mortgage, and filed for bankruptcy in 2011. His mortgage company at the time, Wells Fargo, had to file a proof of claim to show the court exactly what was owed to them in case 11-69409 of the US Bankruptcy Court, Northern District of Georgia. He had to document his income and assets.
Many debtors prefer chapter 7 banktruptcy to chapter 13 as it is over sooner and comes without the obligation to pay a portion of their debts over the course of time. After initially filing chapter 13, Mr. Whitfield converted his case to chapter 7, and was successfully discharged from bankruptcy in 2016.
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