Archive for the ‘Chapter 13’ Category

Transfer Property in Chapter 13 Bankruptcy

Friday, October 10th, 2014

The Real Estate Frenzy

In the early years of the new millennium many people in Florida had big dreams of buying real property, fixing it up, and selling it for a profit. And many were successful. That is, until the bottom fell out of the real estate market leaving many people who dabbled in real estate holding the proverbial bag. Some people tried to hold onto properties and rent them out to cover the mortgage expense and other other expenses including property taxes, insurance, and in the worst cases condominium fees or homeowner’s association fees.

Florida Condominiums

Some of the hardest hit properties in Florida during the real estate crisis were condominiums. These properties generally lost value at a greater rate than single family homes. The declining values coupled with the condo association fees made making the required payments nearly impossible for a lot of folks. With the accrual of condo fees and non-payment of the mortgage, these property owners faced protracted litigation from both the mortgage holder and the condo association. Bankruptcy could be the answer.

In Re: Rosa

A decision in a Hawaiian bankruptcy court allowed the owners of a condominium to “vest” the property back to the mortgage holder in a Chapter 13 Bankruptcy. This meant that upon recordation of the confirmation order, the order would act as a deed of conveyance and the bank would legally own the property. The Reissman Law Group, P.A. has been successful in transferring real property in Chapter 13 back to mortgage  holders. It should be noted that the bankruptcy court cannot force the mortgage holder to accept a deed under Florida law. However, upon the filing of a motion to vest the property back to the mortgage holder and if no objection or other response is made by the mortgage holder, several bankruptcy  judges in the Tampa Division have granted these motions and transferred title to back to the mortgage holder.

If you would like to discuss your options about the possibility of transferring your property back to your mortgage holder in a Chapter 13 contact us today for a free consultation with one of our attorneys.

 

Consumers Filing Bankruptcy Face Bigger Challenges

Monday, September 30th, 2013

By: Marshall G. Reissman

A recent article in the New York Times recently about consumers facing bankruptcy with much more debt than previous debtors. If you are facing this same type of situation, please call us and schedule a free consultation. We want to help you in this time of uncertainty and doubt

 

 

 

Can I Strip off a Second Mortgage in Chapter 7? Now you Can!

Friday, May 18th, 2012

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.

The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.

Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.

The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.

Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.

McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)

Dewsnup v. Timm, 502 U.S. 410 (1992).

Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).

11 U.S.C. Sec. 502

11 U.S.C. Sec. 506(a)

11 U.S.C. Sec. 506(d)

The Test No One Discusses in Bankruptcy

Friday, May 4th, 2012

By: Marshall G. Reissman Bankruptcy Attorney in St. Petersburg, Florida at The Reissman Law Group, P.A.

The test that everyone wants to talk about when they come in for a consultation is the Means Test. Folks generally want to know if they qualify to file Chapter 7 by passing the Means Test. This test is pretty simple. If you are below the state median income you qualify. Everyone breathes a big sigh of relief that they won’t be forced into a repayment plan under Chapter 13. The problem with this is the Means Test is where the analysis begins, not where it ends. The actual income and expenses of the Debtor must be taken into account in order to pass the not much discussed “Totality of  Circumstances Test.”

Even if a Debtor is below the median income on the Means Test, if the Debtor has disposable income on the bankruptcy schedules, the Debtor may not qualify to receive a discharge under Chapter 7. This is called the Totality of Circumstances Test. If a Debtor has disposable income to pay back unsecured creditors, the Trustee can file a notice stating that receiving a discharge under Chapter 7 would be an abuse. Not many folks talk about the Totality of Circumstances Test, and the only test you can find on the internet is the Means Test. Inevitably, folks do some research on the internet, find out they are under their state’s median income, and automatically think they can receive a discharge under Chapter 7. Therein lies the mistake. Passing the Means Test just gets you to the starting line, a better analysis needs to be performed to see if you can finish the race.

I recently had the opportunity to review Warren Sapp’s bankruptcy petition when I was interviewed by a Tampa Bay Times reporter. Link to the story can be found here.  I previously wrote an article about the reason why I, and other bankruptcy attorneys, think that Mr. Sapp filed for bankruptcy. The garnishment. Another question folks had was how could a person with so much income file Chapter 7. Looking over the schedules, it did not appear Mr. Sapp had substantial income in the six months prior to filing the Chapter 7 Bankruptcy petition. What I believe will be problematic for Mr. Sapp is the amount of disposable income he shows on his schedules. While Mr. Sapp does not fail the Means Test, Mr. Sapp lists more than $4,500.00 in net monthly income on his schedules, which could  be viewed as an abuse is he receives a discharge under Chapter 7. I guess we will have to wait and see.

In the meantime, if you want to find out if you not only qualify to file Chapter 7 Bankruptcy, but will be able to receive a discharge under Chapter 7, call us for a free consultation. We have more than 30 years combined experience representing individuals in bankruptcy.