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Client with Big Homestead Exemption Moving to=20
Unless your client is self employed, you are stuck with the employer's
401(k) plan and its generally limited options. If he is not self employed you
cannot establish a 401(k) as it is an employer created created vehicle.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 5/20/2014 5:03:59 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Mark:
Youre right that finding a 401K will be difficult, but itof retirement plans out there and Im hoping an expert could find me the
right one.
Youre also right that a mobile home is the way to go, but one of the
client had an trailer trash type allergic reaction to the idea. I assured
her that she wouldnt have to cook any meth in her kitchen and that they are
actually quite nice these days. I urged her to go visit a Clayton
dealership and that Warren Buffetts Berkshire Hathaway is its owner, and while
Warren probably doesnt live in one, his ownership of the company confers a
certain classiness. Such a home on a small piece of land in Oregon would be
quite cozy.
Its still a work in progress. This will be my second moving-to-Oregon
case. The first one worked out beautifully.
I love Oregon and would like to join them, but my livelihood depends on
living in the bankruptcy capital of the world, as Im addicted to the income
I derive from it, and of course, the glamour.
Steve
Sent: Monday, May 19, 2014 8:18 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Client with Big Homestead Exemption Moving to
Oregon-- Can They ...
Is CCP 704.710 et. seq. extraterritorial? I have not had to research the issue.
I think your pc will have great difficulty finding a 401(k) plan that
would allow for such a transaction as you describe. Generally, to roll over a
401(k) into another 401(k) there it needs to be a new EMPLOYER's 401(k)
plan. Good luck finding an employer's plan that will allow the funds to be
invested in notes to the debtor secured by a deed of trust/mortgage. 401(k) plan are not something individuals create for themselves unless self
employed.
IRA's have far more flexibility and the account holder beneficiary has farmore control than the 401(k) account holder beneficiary. 401(k)'s are
rolled over into IRA's all the time. The problem then is of course you are
rolling over the 401(k), which is not an asset of the bankruptcy estate into
an IRA that is an asset of the bankruptcy estate. Presuming it would not violate some IRS regulation for an IRA to invest in a deed of trust/mortgage
owed by its beneficiary, if you get all your ducks in a row and time it
all correctly, your pc could file the Chapter 7 first then postpetition
convert the 401(k) into an IRA that allows for such deed of trust transactions
and purchase the home within 6 months of the prior sale so that the
$140,000 homestead proceeds roll over into the new residence.
Alternatively your pc could just invest the $140,000 into a far less
expensive home, like a mobile home that would not require any financing. That
would not even need to be a permanent solution.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 5/19/2014 7:30:51 P.M. Pacific Daylight Time,
_cdcbaa@yahoogroups.com_ (mailto:cdcbaa@yahoogroups.com) writes:
The present one does not, but that is from his old employer. Well roll
it over to one that does.
Steven B. Lever
_[mailto:cdcbaa@yahoogroups.com]_ (mailto:[mailto:cdcbaa@yahoogroups.com]) Sent: Monday, May 19, 2014 7:22 PM
To: _cdcbaa@yahoogroups.com_ (mailto:cdcbaa@yahoogroups.com)
Subject: Re: [cdcbaa] Client with Big Homestead Exemption Moving to
Oregon-- Can They Make a Mortgage from Their Own Retirement?
Before you plan on that, make sure the 401k allows loans for Debtor's
owned real estate. It may not.
Jason Wallach
_jwallach@gladstonemichel.com_ (mailto:jwallach@gladstonemichel.com)
On May 19, 2014, at 7:07 PM, 'Steven B. Lever' _sblever@leverlaw.com_
(mailto:sblever@leverlaw.com) [cdcbaa] wrote:
Michael;
The California exemptions apply to the Oregon home as you use the state
from whence you came for 2 years. So I think the law and the math or on our
side there.
My thinking on the loan from the 401K or other ERISA qualified plan that we
e Debtor
to himself, and so would the Trustee have to honor the security agreementjust like it was a loan from a bank?
I dont see why not. A loan can come from a friend, family member or
bank. On the other hand, is a retirement plan separate enough from the debtor?
Steve
_[mailto:cdcbaa@ya hoogroups.com]_ (mailto:[mailto:cdcbaa@yahoogroups.com])
Sent: Monday, May 19, 2014 2:16 PM
To: _cdcbaa@yahoogroups.com_ (mailto:cdcbaa@yahoogroups.com)
Subject: Re: [cdcbaa] Client with Big Homestead Exemption Moving to
Oregon-- Can They Make a Mortgage from Their Own Retirement?
I have no experience with what I'm about to reply with but I have been thinking about this fact pattern for a long time now. I think that if done properly, the loan from the 401k can become a PMSI on the new house and that
Oregon law would apply to whether that happens.
My concern is with the $14 0k in exempt money. That exemption only lasts
for 6 months. If reinvested in a home in California, the California
exemption would prevent the Trustee from getting the money. Exempt to Exempt
transaction.
The Oregon exemption is 50k (I googled, so maybe wrong). So 90k of the
equity in the new home would not be exempted by Oregon law. How are you going
to prevent the Trustee from saying he wants the 90k that is no longer
exempt as soon as the new home is bought? -- the 6 month period expires as soon
as the exempt money is used to buy any other property.
Sincerely,
Michael Avanesian
/ div>
Law Offices of David A. Tilem
_www.tilemlaw.com_ (http://www.tilemlaw.com/)
818-507-6000
On Mon, May 19, 2014 at 12:29 PM, 'Steven B. Lever' _sblever@leverlaw.com_(mailto:sblever@leverlaw.com) [cdcbaa] wrote:
Listmates:
I have clients for whom I& #8217;m filing a Chapter 7 case who live in Orange County.
They want to move to Oregon. They sold their house and will have $140,000 in cash from the sale later this summer.
The husband lost his job and the credit score is going downhill.
They are moving to Oregon and want to reestablish themselves there. I
will file them in OC before the 90 day venue period has elapsed (greater part
of 180 days is within first 90 days).
The house they will buy up there to reinvest their homestead exempti on
amount will cost about $350,000, so they need to borrow about $225,000 ofthat to protect the homestead exemption counting the $25,000 of cost of sale
that will protect their house.
The source of the $225,000 mortgage loan is problematic since hesunemployed.
Im going to look into rolling over his large 401K to a plan that allows
him to invest in real estate mortgages. Then his own retirement plan would
have an investment in and be a secured creditor in his own residence.
Does anyone think a Chapter 7 Trustee could disregard that secured debt
because it was from his own retirement plan?
Steve
Law Offices of Steven B. Lever
>
> Steven B. Lever
>( Tel. _(562) 436-5456 ext. 1_ (tel:(562)%20436-5456%20ext.%201)
>( Fax _(562) 485-6886_ (tel:(562)%20485-6886)
>* _sblever@leverlaw.com_ (mailto:sblever@leverlaw.com)
> _www.leverlaw.com_ (http://www.leverlaw.com/)
> ******************************************************
Unless your client is self employed, you are stuck with the employer's401(k) plan and its generally limited options. If he is not self employed
you cannot establish a 401(k) as it is an employer created created
vehicle.
Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)
In a message dated 5/20/2014 5:03:59 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Mark:
Youre right that finding a
401K will be difficult, but its a big world of retirement plans out there and
Im hoping an expert could find me the right one.
Youre also right that a
mobile home is the way to go, but one of the client had an trailer trash
type allergic reaction to the idea. I assured her that she wouldn to cook any meth in her kitchen and that they are actually quite nice these
days. I urged her to go visit a Clayton dealership and that Warren Buffetts Berkshire Hathaway is its owner, and while Warren probably doesnt
live in one, his ownership of the company confers a certain classiness.
Such a home on a small piece of land in Oregon would be quite cozy.
Its still a work in
progress. This will be my second moving-to-Oregon case. The first
one worked out beautifully.
I love Oregon and would like
to join them, but my livelihood depends on living in the bankruptcy capital of
the world, as Im addicted to the income I derive from it, and of course, the
glamour.
Steve
From: cdcbaa@yahoogroups.com
[mailto:cdcbaa@yahoogroups.com] Sent: Monday, May 19, 2014 8:18
PMTo: cdcbaa@yahoogroups.comSubject: Re: [cdcbaa] Client
with Big Homestead Exemption Moving to Oregon-- Can They
...
Is CCP 704.710
et. seq. extraterritorial? I have not had to research the
issue.
I think your pc
will have great difficulty finding a 401(k) plan that would allow for such a
transaction as you describe. Generally, to roll over a 401(k) into another 401(k) there it needs to be a new EMPLOYER's 401(k) plan. Good
luck finding an employer's plan that will allow the funds to be invested
in notes to the debtor secured by a deed of
trust/mortgage. 401(k) plan are not something
individuals create for themselves unless self
employed.
IRA's have far
more flexibility and the account holder beneficiary has far more control than
the 401(k) account holder beneficiary. 401(k)'s are rolled over into
IRA's all the time. The problem then is of course you are rolling over
the 401(k), which is not an asset of the bankruptcy estate into an IRA
that is an asset of the bankruptcy estate. Presuming it would not
violate some IRS regulation for an IRA to invest in a deed of trust/mortgage
owed by its beneficiary, if you get all your ducks in a row and time it all
correctly, your pc could file the Chapter 7 first then postpetition convert
the 401(k) into an IRA that allows for such deed of trust
transactions and purchase the home within 6 months of the prior sale so that
the $140,000 homestead proceeds roll over into the new
residence.
Alternatively
your pc could just invest the $140,000 into a far less expensive
home, like a mobile home that would not require any financing. That would not even need to be a permanent
The post was migrated from Yahoo.
Is CCP 704.710 et. seq. extraterritorial? I have not had to research theissue.
I think your pc will have great difficulty finding a 401(k) plan that would allow for such a transaction as you describe. Generally, to roll over a 401(k) into another 401(k) there it needs to be a new EMPLOYER's 401(k) plan. Good luck finding an employer's plan that will allow the funds to be
invested in notes to the debtor secured by a deed of trust/mortgage. 401(k)
plan are not something individuals create for themselves unless self
employed.
IRA's have far more flexibility and the account holder beneficiary has far more control than the 401(k) account holder beneficiary. 401(k)'s are
rolled over into IRA's all the time. The problem then is of course you arerolling over the 401(k), which is not an asset of the bankruptcy estate into
an IRA that is an asset of the bankruptcy estate. Presuming it would notviolate some IRS regulation for an IRA to invest in a deed of trust/mortgage
owed by its beneficiary, if you get all your ducks in a row and time it
all correctly, your pc could file the Chapter 7 first then postpetition
convert the 401(k) into an IRA that allows for such deed of trust transactions
and purchase the home within 6 months of the prior sale so that the $140,000
homestead proceeds roll over into the new residence.
Alternatively your pc could just invest the $140,000 into a far less
expensive home, like a mobile home that would not require any financing. That
would not even need to be a permanent solution.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 5/19/2014 7:30:51 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
The present one does not, but that is from his old employer. Well roll
it over to one that does.
Steven B. Lever
Sent: Monday, May 19, 2014 7:22 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Client with Big Homestead Exemption Moving to
Oregon-- Can They Make a Mortgage from Their Own Retirement?
Before you plan on that, make sure the 401k allows loans for Debtor's owned real estate. It may not.
Jason Wallach
_jwallach@gladstonemichel.com_ (mailto:jwallach@gladstonemichel.com)
On May 19, 2014, at 7:07 PM, 'Steven B. Lever' _sblever@leverlaw.com_
(mailto:sblever@leverlaw.com) [cdcbaa] wrote:
Michael;
The California exemptions apply to the Oregon home as you use the state
from whence you came for 2 years. So I think the law and the math or on our
side there.
My thinking on the loan from the 401K or other ERISA qualified plan that we
e Debtor
to himself, and so would the Trustee have to honor the security agreementjust like it was a loan from a bank?
I dont see why not. A loan can come from a friend, family member or
bank. On the other hand, is a retirement plan separate enough from the debtor?
Steve
_[mailto:cdcbaa@ya hoogroups.com]_ (mailto:[mailto:cdcbaa@yahoogroups.com])
Sent: Monday, May 19, 2014 2:16 PM
To: _cdcbaa@yahoogroups.com_ (mailto:cdcbaa@yahoogroups.com)
Subject: Re: [cdcbaa] Client with Big Homestead Exemption Moving to
Oregon-- Can They Make a Mortgage from Their Own Retirement?
I have no experience with what I'm about to reply with but I have been
thinking about this fact pattern for a long time now. I think that if doneproperly, the loan from the 401k can become a PMSI on the new house and that
Oregon law would apply to whether that happens.
My concern is with the $14 0k in exempt money. That exemption only lasts
for 6 months. If reinvested in a home in California, the California
exemption would prevent the Trustee from getting the money. Exempt to Exempt
transaction.
The Oregon exemption is 50k (I googled, so maybe wrong). So 90k of the
equity in the new home would not be exempted by Oregon law. How are you going
to prevent the Trustee from saying he wants the 90k that is no longer
exempt as soon as the new home is bought? -- the 6 month period expires as soon
as the exempt money is used to buy any other property.
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
_www.tilemlaw.com_ (http://www.tilemlaw.com/)
818-507-6000
On Mon, May 19, 2014 at 12:29 PM, 'Steven B. Lever' _sblever@leverlaw.com_(mailto:sblever@leverlaw.com) [cdcbaa] wrote:
Listmates:
I have clients for whom I& #8217;m filing a Chapter 7 case who live in
Orange County.
They want to move to Oregon. They sold their house and will have $140,000in cash from the sale later this summer.
The husband lost his job and the credit score is going downhill.
They are moving to Oregon and want to reestablish themselves there. I
will file them in OC before the 90 day venue period has elapsed (greater part
of 180 days is within first 90 days).
The house they will buy up there to reinvest their homestead exempti on
amount will cost about $350,000, so they need to borrow about $225,000 ofthat to protect the homestead exemption counting the $25,000 of cost of sale
that will protect their house.
The source of the $225,000 mortgage loan is problematic since hesunemployed.
Im going to look into rolling over his large 401K to a plan that allows
him to invest in real estate mortgages. Then his own retirement plan would
have an investment in and be a secured creditor in his own residence.
Does anyone think a Chapter 7 Trustee could disregard that secured debt
because it was from his own retirement plan?
Steve
Law Offices of Steven B. Lever
>
> Steven B. Lever
>( Tel. _(562) 436-5456 ext. 1_ (tel:(562)%20436-5456%20ext.%201)
>( Fax _(562) 485-6886_ (tel:(562)%20485-6886)
>* _sblever@leverlaw.com_ (mailto:sblever@leverlaw.com)
> _www.leverlaw.com_ (http://www.leverlaw.com/)
> ******************************************************
Is CCP 704.710 et. seq. extraterritorial? I have not had toresearch the issue.
I think your pc will have great difficulty finding a 401(k) plan that would
allow for such a transaction as you describe. Generally, to roll over a
401(k) into another 401(k) there it needs to be a new EMPLOYER's 401(k)
plan. Good luck finding an employer's plan that will allow the funds
to be invested in notes to the debtor secured by a deed of
trust/mortgage. 401(k) plan are not something individuals
create for themselves unless self employed.
IRA's have far more flexibility and the account holder beneficiary has far
more control than the 401(k) account holder beneficiary. 401(k)'s arerolled over into IRA's all the time. The problem then is of course you are
rolling over the 401(k), which is not an asset of the bankruptcy
estate into an IRA that is an asset of the bankruptcy estate.
Presuming it would not violate some IRS regulation for an IRA to invest in a
deed of trust/mortgage owed by its beneficiary, if you get all your ducks in a
row and time it all correctly, your pc could file the Chapter 7 first thenpostpetition convert the 401(k) into an IRA that allows for such deed
of trust transactions and purchase the home within 6 months of the prior sale so
that the $140,000 homestead proceeds roll over into the new residence.
Alternatively your pc could just invest the $140,000 into a far
less expensive home, like a mobile home that would not require any
financing. That would not even need to be a permanent
solution.
Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)
In a message dated 5/19/2014 7:30:51 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
The present one does not, but
that is from his old employer. Well roll it over to one that
does.
Steven B. Lever
From: cdcbaa@yahoogroups.com
[mailto:cdcbaa@yahoogroups.com] Sent: Monday, May 19, 2014 7:22
PMTo: cdcbaa@yahoogroups.comSubject: Re: [cdcbaa] Client
with Big Homestead Exemption Moving to Oregon-- Can They Make a Mortgage from
Their Own Retirement?
Before you plan on that, make sure the 401k allows loans for Debtor's owned
real estate. It may not.
Jason
Wallach
The post was migrated from Yahoo.