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Avoiding a Voluntary Deed
It's not a judgment lien, it's a voluntary lien. As such, even if the
transaction qualifies as a preferential transfer to an insider, because it was
a voluntary transfer debtor cannot exempt any portion of the equity
created by the avoidance of the lien pursuant to Section 522(g). Obviously if
the $250k lien is undersecured and there is an avoidable preference, then it
is an amount smaller than $250,000 needing to be paid out through the
Chapter 13.
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 9/29/2016 4:53:38 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
There are only two parties. Debtor (young attorney) and creditor/insider
(unhappy client/family friend). Debtor settled with the creditor for $250k
for alleged malpractice and signed a deed against his house. The deed wasdue to be paid in 60 days and it wasnt paid so creditor began foreclosure.
Debtor filed Ch13. He intends to refinance out of the deed. Avoiding the
deed does create some non-exempt equity but if he can do it he will end uppaying much less in the long run and he has the disposable income to do it.
Shannon A. Doyle
Attorney | Virtual Bankruptcy Assistant
Phone: 855-378-4080
Fax: 562-249-8435
Licensed in California
(http://www.ebankruptcyassistants.com/)
(https://www.facebook.com/ebankruptcyassistants)
(https://twitter.com/attorneyvba) (https://plus.google.com/u/0/)
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I am still befuddled by the facts. My post was an attempt to clarify the facts and opine. Upon rereading after being advised that I probably misread the facts, are there only two parties?
Assuming Cameron is correct that there are only two parties, I agree that more needs to be known about the lien. If the friend gained a preference over less beloved creditors by getting the lien, then indeed it is fishy and likely an insider. You may have the ignoble debtor, rather than the noble one.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green, Attorneys at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: (626) 449-8433
Fax: (626) 449-0565
pat@fitzgreenlaw.com
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Does Pat have the facts right? Is it three parties involved or two?
If it is two, then the only way the Debtor can avoid the lien in a Chapter 13 is if it qualifies as a preferential transfer. As it was a voluntary transfer, debtor would not be able to claim any of the recovered transfer as
exempt.
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 9/28/2016 5:07:21 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Then it is a preference, but I am not clear on the parties.
Mortgagor is PC.
Young lawyer is obligor on promissory note.
Bennie of mortgage is injured client and obligee under note.
So the mortgagor was not the debtor in the malpractice, but was a family
member of the young malpracticing lawyer who had agreed to pay his unhappyclient $250k and suckered the family member into securing the debt with
their house.
If my facts above are correct, then if the transaction is unwound, the
mortgagor/PC is not personally liable on the loan, the unwinding of the
mortgage would leave nothing for the trustee, but would unencumber the house.
However, how would this stranger (the damaged client of the young lawyer) to
your client be considered an insider with your client. Their interest areadverse.
Patrick T. Green
Attorney at Law
Fitzgerald & Green, Attorneys at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: (626) 449-8433
Fax: (626) 449-0565
pat@fitzgreenlaw.com
Sent: Wednesday, September 28, 2016 3:43 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] RE: Avoiding a Voluntary Deed
Yes the debt was owed prior to giving the deed. A young lawyer settled
with an unhappy client for $250k for alleged malpractice. The unhappy client
was a family friend so this could be an insider.
Shannon A. Doyle
Attorney | Virtual Bankruptcy Assistant
Phone: 855-378-4080
Fax: 562-249-8435
Licensed in California
(http://www.ebankruptcyassistants.com/)
(https://www.facebook.com/ebankruptcyassistants)
(https://twitter.com/attorneyvba) (https://plus.google.com/u/0/)
The post was migrated from Yahoo.
The injured client is not a stranger but rather a family friend. It's not clear whether their interests are adverse or whether they agreed to encumber the property for another purpose. Sounds fishy to me. I've never heard of a third party agreeing to secure payment of a settlement.
Cameron
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Then it is a preference, but I am not clear on the parties.
Mortgagor is PC.
Young lawyer is obligor on promissory note.
Bennie of mortgage is injured client and obligee under note.
So the mortgagor was not the debtor in the malpractice, but was a family member of the young malpracticing lawyer who had agreed to pay his unhappy client $250k and suckered the family member into securing the debt with their house.
If my facts above are correct, then if the transaction is unwound, the mortgagor/PC is not personally liable on the loan, the unwinding of the mortgage would leave nothing for the trustee, but would unencumber the house. However, how would this stranger (the damaged client of the young lawyer) to your client be considered an insider with your client. Their interest are adverse.
Patrick T. Green
Attorney at Law
Fitzgerald & Green, Attorneys at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: (626) 449-8433
Fax: (626) 449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.
Was the debt owing prior to the giving of deed? My biggest concern is that you appear to be outside the 90 day reachback period for avoiding preferential payment (you don't state if the deed was given to an insider, but I am assuming it wasn't).
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It is a contemporaneous exchange for value, so it is not a preference.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green, Attorneys at Law
1010 E. Union St. Suite 206
Pasadena, CA 91106
Tel: (626) 449-8433
Fax: (626) 449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.