3RESPONSE TO DEBTOR’S SECOND AMENDED OBJECTION TO PROOF OF CLAIM FILED BY J.P. MORGAN AND REPLY TOOPPOSITION TO MOTION FOR RELIEF FROM AUTOMATIC STAY FILED BY PHH MORTGAGE CORPORATION
First, as discussed below, an adversary proceeding is required to determine the validity,extent, and priority of J.P. Morgan’s lien. However, Debtors have failed to file an adversaryproceeding and are seeking to have this debt be deemed unenforceable without doing so. This isnot permitted under the Bankruptcy Rules and a violation of due process. Notwithstanding,Debtors’ contentions in the Amended Objection are without merit as discussed below. J.P. Morganholds an enforceable Note and Deed of Trust which is secured on the Property. Furthermore, PHHfiled the below response in reliance on the exhibits attached and the Declaration (Listed as #66 onDocket Report) to support the following opposition. PHH, as the servicer for J.P. Morgan, isauthorized to file the Proof of Claim on behalf of J.P. Morgan. The Objection must be overruled.
RESPONSE TO DEBTOR’S SECOND AMENDED OBJECTION TO CLAIM
DEBTOR’S OBJECTION IS AN ATTEMPT TO DISALLOW A CLAIMWHICH REQUIRES AN ADVERSARY PROCEEDING.
Debtors are attempting to have the Court determine the validity and extent of the liens inquestion by way of an improper objection to claim. It is an attempt to bypass the requirements of anadversary proceeding and ignore the due process protections afforded to parties by disguising thismatter as an Objection to Claim. An Adversary Proceeding is required and the relief sought cannotbe obtained through an Objection to Claim.Federal Bankruptcy Rule 3007 provides that if an objection to a claim is joined with ademand for relief of a kind specified in Rule 7001, it becomes an
. Rule3007(b) provides that a demand for relief requiring an adversary proceeding may not be included inan objection to claim.
Bankruptcy Rule 7001(2), in turn, provides that an adversary proceeding isrequired for an action challenging the validity, priority or extent of a lien.
Thus, if Debtors’objection to a secured claim is combined with a challenged to the lien, an adversary proceeding isrequired. In re Kleibringk, 346 B.R. 734, 749 (Bankr. N.D.Tex. 2006).In this case, Debtors request, despite their admissions that they borrowed the monies underthe Note secured by the Deed of Trust, that the debt be unenforceable against them or their property.This is clearly an attempt to challenge the validity, priority and extent of the lien.
Case 10-31903-lbr Doc 93 Entered 10/27/11 19:14:30 Page 3 of 11