David,
I just posted to the List Serv Files under Newsletters, the January
2009 Newsletter that includes my article on Motions to Value and its
effect on lien avoidance. That is the analysis for Chapter 13, upon
which the following analysis follows:
Once the trust purpose (the note) has been extinguished with a
discharge, under California law the lien must be avoided; however, in
a Chapter 7 the real property is property of the estate until the
Trustee abandons, and after that the court really has no jurisdiction
to effectuate the state law, because the Trustee has abandoned it back
to the Debtor. One alternative is that in a subsequent Chapter 13
(Chapter 20), the court will determine value such that the lien does
not "ride through" for two reasons: first, the underlying trust
purpose was discharged in the Chapter 7, and second, the lien is
"wholly undersecured," and therefore, there is no equity against which
the deed of trust can "ride through" against. Remember thought that
there must be an effective reorganization for the Chapter 13 to be
filed in good faith. Past due payments to the first, past due
property taxes (remember, even though client may have paid the first
half, the whole amount was due in December, and so, according to the
Los Angeles County Assessor the second half is also due and includable
as a claim in the Chapter 13 and payable over time), past due income
taxes, nondischargeable debt determined during the course of the
Chapter 7, and reaffirmed debt are all candidates for payments over
time in a Chapter 13. And, so, the lien may be avoided once the
purpose for the Chapter 13 has been fully consummated - the Chapter 13
plan completed in payments.
Lou Esbin
>
> Why does debtor need a discharge in the subsequent C13? The underlying
> personal obligation on the debt was discharged in the prior C7. All
that
> remains is to strip the lien. Is the lien strip effective upon
discharge or
> upon completion of the plan?
>
> David A. Tilem
> Certified Bankruptcy Specialist*
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
> Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
>
>
>
Behalf Of
> Mark JM
> Sent: Friday, January 23, 2009 9:51 AM
> To:
cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] Timing of Ch. 7 vs. 13 and lien stripping
>
>
>
>
> Yea, that's the issue.
>
Behalf Of
> Dennis McGoldrick
> Sent: Friday, January 23, 2009 1:37 AM
> To:
cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Timing of Ch. 7 vs. 13 and lien stripping
>
>
> Isn't the real problem the fact the Lam strip isn't effective until the
> chapter 13 discharge is issued? And wouldn''t a discharge be
precluded in
> the w/in 4 years chapter 13?
>
> We' posed the question before, but unless a judge would issue a Lam
order,
> effectively immediately, due to the prior 7, there would never be a 13
> dischage and the chapter 20 would therefore be ineffective.
>
> dennis
>
> --- On Thu, 1/22/09, Mark JM wrote:
>
> Subject: [cdcbaa] Timing of Ch. 7 vs. 13 and lien stripping
> To:
cdcbaa@yahoogroups.com
> Date: Thursday, January 22, 2009, 4:51 PM
>
> I keep getting the same fact scenarios over and over lately for
people who
> have real property with underwater Deeds of Trust that could be Lam
Motioned
> (lien stripped) in a Chapter 13, but that do not presently have income
> sufficient to do a Chapter 13 plan (even after eliminating the
junior lien
> payments).
>
>
>
> Thus, facing pressure from creditors, they may need to do a Chapter
7 now,
> and do loan modifications with their secured lenders.
>
>
>
> My question is this: Can they do a Chapter 7, get a discharge, then
file a
> Chapter 13 case before four years have passed, and do a lien strip
in the
> new Chapter 13 (would be a 100% repayment plan, because there would most
> likely not be any unsecureds). Theyre not seeking a discharge in
the new
> Chapter 13, only a lien strip and ability to pay something in the new
> Chapter 13 (perhaps).
>
> I think Jeff Hagen was positing this scenario to Judge Mund who gave an
> initial negative response to that. Has anyone tried it? Any other
ideas?
>
>
> ************ ********* ****
>
> Mark J. Markus
>
> Law Office of Mark J. Markus
>
> 11684 Ventura Blvd. PMB #403
>
> Studio City, CA 91604-2652
>
> (818)509-1173 (818)509-1460 (fax)
>
> Toll Free: 1-866-576-6275
>
> web:
http://www.bklaw. com/
>
> This Firm is a Qualified Federal Debt Relief Agency (see what this
means at
>
http://bklaw. com/bankruptcy- blog/2008/ 09/debt-relief- agencies-
> definition/)
>
> ____________ _________ _________ _________ _________
>
> NOTICE: This Electronic Message contains information from the law
office of
> Mark J. Markus that may be privileged. The information is intended
for the
> use of the addressee only. If you are not the addressee, note that any
> disclosure, copy, distribution or use of the contents of this message is
> prohibited.
>
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements
imposed by
> the IRS, we inform you that any U.S. tax advice contained in this
> communication (or in any attachment) is not intended or written to
be used,
> and cannot be used, for the purpose of (i) avoiding penalties under the
> Internal Revenue Code or (ii) promoting, marketing or recommending to
> another party any transaction or matter addressed in this communication.
>
The post was migrated from Yahoo.