A mortgage lender is a company or private lender that has received certain property as collateral from a borrower. Usually, various real estate objects or cars act as collateral. The pledge is a guarantee that the recipient will return the full amount with accrued interest to the creditor. Otherwise, he will lose his property, which will be sold at auction. Even if the borrower declares himself bankrupt, he is not exempted from the requirements of various lenders. Claims of the creditor with whom the mortgage is drawn up are supported by collateral.
Mortgage Lender Status
He is a lender with certain rights to property owned by the borrower. Only due to the presence of a competently drafted and registered mortgage is it possible to collect debt through the sale of material value.
It is the pledge holder who must prove that the debtor has a specific property. If other lenders have objections, then evidence is sought by the designated administrator.
The pledge holder has the right to receive his funds after the sale of a specific property on which the encumbrance was imposed. Such creditors are included in the third turn of the applicants. But due to guarantees, such a creditor can count on early repayment of the debt.
What role does it play?
The role of the mortgage lender is that it is he who makes the decision as to what actions will be performed with the particular mortgage property. The process is carried out only if there is a delay in payment and the beginning of the bankruptcy procedure in relation to the non-payer. A pledge holder may waive his rights in order to vote at meetings.
The borrower has rights to collateral that cannot be challenged by a court or an appointed trustee. Often, with the help of the manager, the solvency of the debtor is restored, so he can further cope with his obligations. In this case, the property remains the property of the borrower.
What documents are prepared?
The mortgage lender may present claims against the debtor as part of declaring it bankrupt. He can initiate this process. In order for a pledge holder to be recognized as an official creditor during bankruptcy proceedings, he must have evidence of an encumbrance on the property of the debtor.
The following documents may be used as evidence:
- extract from the USRN, if the pledge was formalized, so the relevant information was entered into the register;
- the act of checking the premises or car;
- extract from the register;
- seizure of pledged property;
- an act of inventory of material value;
- reconciliation acts;
- vehicle registration certificate;
- inventory inventory.
Only with the above documentation will the requirements of the security lender be taken into account. It is on the basis of the decision made by the arbitration manager that the specific position of the creditor in the bankruptcy process is determined. If there is evidence that only with the help of the pledged property the debtor can restore its solvency, then the pledge holder will not be able to receive this item to pay off the debt. But this only applies to a situation where the debtor goes through a financial recovery process.
Application Rules
In order for a particular lender to be recognized as a security, he must submit a corresponding application to the court or to the arbitration manager. A statement by a secured creditor can be made in different situations:
- the mortgagee may file a lawsuit as a regular lender who does not have a mortgage with the debtor, but will have to declare his position already in the production process, and there is also the possibility of missing the deadline, so the lender will not be able to continue to participate in the process and have any advantages;
- from the very beginning, the creditor can prove that he has pledged property belonging to the debtor, which allows him to use certain guarantees, as well as receive funds immediately after the sale of this tangible item.
Most often, banks use the second method, as this allows you to receive funds from the borrower promptly and in full.
What are the rights?
The rights of a secured creditor are presented in the following forms:
- direct participation in the bankruptcy proceedings, which consists in the sale of property belonging to the debtor, and this procedure is applied if, for various reasons, it is impossible to use other methods of collecting funds;
- since the debt of such a lender is the main one, he can count on the prompt receipt of money from the sale of property;
- participation in the debtor’s financial recovery process is allowed, and at this time the non-payer must comply with the requirements of the pledge holder;
- taking part in meetings where voting is held on the possibility of forming a schedule on the basis of which debts will be paid by the non-payer;
- participation in external management, as the lender may influence the determination of the price of collateral if a decision is made on its sale, and also insist on reducing the debtor's expenses.
Due to such numerous rights, the lender can facilitate the prompt receipt of his funds. The mortgage lender, along with other lenders, must be notified in advance that a particular debtor is declared bankrupt. Only in this case can he present his requirements in a timely manner.
What are the responsibilities?
In addition to certain rights, the mortgage lender has obligations. These include:
- holding an auction at which collateral is sold;
- the application of various measures designed to collect debt from the non-payer;
- taking part in meetings where it is required to vote when making this or that decision, but the creditor has the right to refuse such obligations, for which he draws up an official statement, since only in this case he has advantages when receiving money from the sale of valuables;
- it is determined under what conditions the property will be sold;
- funds allocated as a result of the sale of property belonging to the debtor are distributed;
- a petition is submitted stating that the creditor has the right to certain property of the debtor due to a correctly executed mortgage;
- presentation of requirements;
- resolving issues related to the sale of objects and obtaining money for debt repayment.
If a sum of money remains as a result of the sale of property, then it is transferred to the appointed manager, after which it is sent to pay off other debts held by the non-payer.
Rights of secured creditors at meetings of creditors
During the meeting of creditors, pledge holders have some specific rights. These include:
- the conditions are determined under which the sale of collateral is carried out;
- first of all, the funds received from the sale of these values are directed to the company that owns the mortgage;
- but with such advantages, the creditor loses the right to vote at meetings;
- although the lender cannot vote, he has the right to participate in discussions or even speak at meetings.
If a creditor wishes to vote, then he loses his privileged status, therefore he becomes an ordinary creditor, to whom funds after bankruptcy proceedings are paid in a standard way.
How is a lender included in the registry?
Bankruptcy pledged creditor must be included in the register of creditors. The decision to include a particular company in the register is made solely by the court. This requires a special application.
A lawsuit against a non-payer may be brought in a certain period of time as part of the process of declaring it insolvent. This is possible even if bankruptcy proceedings have already been initiated. Timely suing gives the lender some advantages over other firms.
The registry is left open for only two months. This period begins from the moment when information on the bankruptcy of a particular debtor is published in open sources. If the creditor does not have time to file a lawsuit in a timely manner, then he will be able to expect to receive funds only after the debts of the companies included in the register are paid off.
What to do when missing a deadline?
If the mortgage creditor did not manage to submit an application for inclusion in the register on time, then he risks that his debt will not be paid off at all, since often the proceeds from the sale of the property of the debtor are not enough to pay off all debts.
The debts of all creditors included in the register are initially repaid. The remaining funds from bankruptcy proceedings are directed to the remaining debt. You can only file an application within two months after the commencement of bankruptcy proceedings. Therefore, each creditor must independently take care of the timely filing of a claim.
Conclusion
Mortgage lenders are represented by lenders who made a mortgage with the debtor. They have certain advantages over other lenders, as they can quickly receive funds from the sale of collateral. To do this, it is important to file a lawsuit in a timely manner.
If the lender wishes to take part in the voting at the meetings, then he will have to give up his status and advantages. Under such conditions, the likelihood of receiving their funds after a competitive proceeding is reduced, since the money will be distributed in a standard way on the basis of the existing sequence.