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Does conversion of home to rental make it a business case --ergo making 707(b) not applicable
If the property you are describing is the debtor's residence, no can do.
Sent from my iPhone
On Mar 1, 2012, at 3:33 PM, Robert Lee wrote:
> I have a similar case, but for purposes of trying to lienstrip and cram down a mortgage. Clients obtained a large 2nd home equity line of credit. It is almost as large as their 1st mortgage. The value is not low enough to do a LAM motion in a 13. The 2nd line was used primarily to fund their business operations. I am wondering if I can use this to justify a Chapter 11 lien strip and cram down and reamortize the loan [assuming other requirements of Ch 11 requirements are met]. Also, their business is in LA County and home is in SFV. I would think filing in SFV would be better. Any sage words of advice ?
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> On Thu, Mar 1, 2012 at 2:28 PM, Dennis wrote:
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> That is the position I take.
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> D
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> Sent from my iPhone
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> On Mar 1, 2012, at 10:20 AM, "Steven B. Lever" wrote:
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>> Colleagues:
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>> I have a client who rented out their former residence and moved to a new residence they are renting. They will not pass the means test if Section 707(b) applies to them.
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>> If you include their mortgage on the residence-converted-to-rental, most of their debt is business debt if you consider the rental business or non-consumer. Yet they are both employed, not self-employed or in business. The unsecured debt is all consumer. So the case doesnt have a business flavor.
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>> I tried searching the list serve history and I only came up with 3 cases: In re Restea 76 BR 728, which is out of the 9th Circuit, and the seminal consumer/business cases In re Kelly 841 F2d 908 and In re Price 353 F3d 1135, which are close to the issue but do not resolve my issue.
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>> The operative language of 11 U.S.C. 707(b) defines "consumer debt" as "debt incurred by an individual primarily for a personal, family, or household purpose." The word incurred gives me the greatest pause. They originally incurred it for household purposes. Now theys incurred an ongoing concept or limited to its original purpose? It is the past participle of incur Become subject to (something unwelcome or unpleasant) as a result of one's own behavior or actions. They remain subject to it, but it was always capable of repurposing, as their own actions have demonstrated.
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>> What are your opinions as to whether filing this as a business/non-consumer case is proper or improper?
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>> Law Offices of Steven B. Lever
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>> >
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>> > Steven B. Lever
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>> >( Tel. (562) 436-5456 ext. 6470
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>> >( Fax (800) 360-5161
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>> >* sblever@leverlaw.com
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>> > www.leverlaw.com
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> --
> Robert K. Lee
> State Bar Certified Specialist in Bankruptcy Law
> LAW OFFICES OF ROBERT K. LEE
> Managing Attorney
> 3435 Wilshire Blvd., Suite 1035
> Los Angeles, CA 90010
> Ph 888-777-0839
> Fx 888-777-0849
> www.robertklee.com
>
>
If the property you are describing is the debtor's residence, no can do. Sent from my iPhoneOn Mar 1, 2012, at 3:33 PM, Robert Lee <boblee.rkl@gmail.com> wrote:
I have a similar case, but for purposes of trying to lienstrip and cram down a mortgage. Clients obtained a large 2nd home equity line of credit. It is almost as large as their 1st mortgage. The value is not low enough to do a LAM motion in a 13. The 2nd line was used primarily to fund their business operations. I am wondering if I can use this to justify a Chapter 11 lien strip and cram down and reamortize the loan [assuming other requirements of Ch 11 requirements are met]. Also, their business is in LA County and home is in SFV. I would think filing in SFV would be better. Any sage words of advice ?
On Thu, Mar 1, 2012 at 2:28 PM, Dennis <easky1@yahoo.com> wrote:
That is the position I take.DSent from my iPhoneOn Mar 1, 2012, at 10:20 AM, "Steven B. Lever" <sblever@leverlaw.com> wrote:
Colleagues:
I have a client who rented out their former residence and moved to a new residence they are renting. They will not pass the means test if Section 707(b) applies to them.
If you include their mortgage on the residence-converted-to-rental, most of their debt is business debt if you consider the rental business or non-consumer. Yet they are both employed, not self-employed or in business. The unsecured debt is all consumer. So the case doesnt have a business flavor. I tried searching the list serve history and I only came up with 3 cases: In re Restea 76 BR 728, which is out of the 9th Circuit, and the seminal consumer/business cases In re Kelly 841 F2d 908 and In re Price 353 F3d 1135, which are close to the issue but do not resolve my issue.
The operative language of 11 U.S.C. rily for a personal, family, or household purpose." The word urred it for household purposes. Now theyve moved out with the hope it will give them profit at some point. Is incurreds the past participle of incur Become subject to (something unwelcome or unpleasant) as a result of one's own behavior or actions. They remain subject to it, but it was always capable of repurposing, as their own actions have demonstrated.
What are your opinions as to whether filing this as a business/non-consumer case is proper or improper?
Law Offices of Steven B. Lever
> > Steven B. Lever
>( Tel. (562) 436-5456 ext. 6470
>( Fax
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