Central District Consumer Bankruptcy Attorney's Association

My issue was whether my client could value the lien and strip it under 506.
*
*
____________________
Robert K. Lee, Esq
State Bar Certified Specialist
[Bankruptcy Law]
3435 Wilshire Blvd, Suite 1035
Los Angeles, CA 90010
Ph [888] 777-0839 Ext 505
Fax [888] 777-0849
WEBSITE
On Mon, Mar 12, 2012 at 10:24 AM, P L wrote:
> **
>
>
> Persumably by stating valuation motion you are referring to use of 506 to
> determine secured status of the home loan claim. This relates to
> characterization of the debt for purposes of whether 1322(b)(2) prohibits
> use of 506 where the claim is secured only by debtor's primary residence.
> The operative determination therein is "debtor's primary residence"
>
> The subject heading for this thread relates to characterization of the
> debt for purposes of 707(b) where the operative determinatin is consumer
> versus non-consumer debt.
>
> These are two entirely different issues.
>
> Peter M. Lively, JD, MBA
> *The Personal Financial Law Center*
> A-Bankruptcy-Attorney.com
> Culver City (310) 391-2400
>
> *From:* Giovanni Orantes
> *To:* cdcbaa@yahoogroups.com
> *Sent:* Monday, March 12, 2012 8:21 AM
>
> *Subject:* Re: [cdcbaa] Does conversion of home to rental make it a
> business case --ergo making 707(b) not applicable
>
>
> I have been in front of Judge Zurzolo on this issue and the only
> question from him was: did the debtor live at the property for more than
> half of his time on the Petition Date? He made me file a declaration
> squarely addressing this and when my client submitted the declaration, he
> then granted a valuation motion for all claims.
>
>
> --
> Giovanni Orantes, Esq.
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 1980
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
>
>
>
>
My issue was whether my client could value the lien and strip it under 506.____________________
Robert K. Lee, EsqState Bar Certified Specialist[Bankruptcy Law]
3435 Wilshire Blvd, Suite 1035Los Angeles, CA 90010Ph [888] 777-0839 Ext 505
Fax [888] 777-0849WEBSITE
On Mon, Mar 12, 2012 at 10:24 AM, P L <petermlively2000@yahoo.com> wrote:
Persumably by stating valuation motion you are referring to use of 506 to determine secured status of the home loan claim.22(b)(2) prohibits use of 506 where the claim is secured only by debtor's primary residence. The operative determination therein is "debtor's primary residence"
The subject heading for this thread relates to characterization of the debt for purposes of 707(b) where the operative determinatin is consumer versus non-consumer debt.
These are two entirely different issues.Peter M. Lively, JD, MBAThe Personal
Financial Law CenterA-Bankruptcy-Attorney.comCulver City (310) 391-2400
From: Giovanni Orantes <go@gobklaw.com>
To: cdcbaa@yahoogroups.com Sent: Monday, March 12, 2012 8:21 AM
Subject: Re: [cdcbaa] Does conversion of home to rental make it a business case --ergo making 707(b) not applicable
I have been in front of Judge Zurzolo on this issue and the only question from him was: did the debtor live at the property for more than half of his time on the Petition Date? He made me file a declaration squarely addressing this and when my client submitted the declaration, he then granted a valuation motion for all claims.
-- Giovanni Orantes, Esq. Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980Los Angeles, CA 90010Tel:
The post was migrated from Yahoo.

Good to know !
*
*
____________________
Robert K. Lee, Esq
State Bar Certified Specialist
[Bankruptcy Law]
3435 Wilshire Blvd, Suite 1035
Los Angeles, CA 90010
Ph [888] 777-0839 Ext 505
Fax [888] 777-0849
WEBSITE
On Mon, Mar 12, 2012 at 8:21 AM, Giovanni Orantes wrote:
> **
>
>
> I have been in front of Judge Zurzolo on this issue and the only question
> from him was: did the debtor live at the property for more than half of
> his time on the Petition Date? He made me file a declaration squarely
> addressing this and when my client submitted the declaration, he then
> granted a valuation motion for all claims.
>
>
>
> --
> Giovanni Orantes, Esq.
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 1980
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
>
>
>
Good to know !____________________Robert K. Lee, Esq
State Bar Certified Specialist[Bankruptcy Law]3435 Wilshire Blvd, Suite 1035
Los Angeles, CA 90010Ph [888] 777-0839 Ext 505Fax [888] 777-0849
WEBSITE
On Mon, Mar 12, 2012 at 8:21 AM, Giovanni Orantes <go@gobklaw.com> wrote:
I have been in front of Judge Zurzolo on this issue and the only question from him was: did the debtor live at the property for more than half of his time on the Petition Date? He made me file a declaration squarely addressing this and when my client submitted the declaration, he then granted a valuation motion for all claims.
-- Giovanni Orantes, Esq. Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980Los Angeles, CA 90010Tel:
The post was migrated from Yahoo.

I have been in front of Judge Zurzolo on this issue and the only question
from him was: did the debtor live at the property for more than half of
his time on the Petition Date? He made me file a declaration squarely
addressing this and when my client submitted the declaration, he then
granted a valuation motion for all claims.
Giovanni Orantes, Esq.
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 1980
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
I have been in front of Judge Zurzolo on this issue and the only question from him was: did the debtor live at the property for more than half of his time on the Petition Date? He made me file a declaration squarely addressing this and when my client submitted the declaration, he then granted a valuation motion for all claims.
-- Giovanni Orantes, Esq. Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.com
website: www.gobklaw.comWE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.

The post was migrated from Yahoo.

Thanks everyone. I think the DOT and loan docs would probably be given
most of the weight in determining whether we can bifurcate under 506.
On Mon, Mar 5, 2012 at 11:39 AM, Giovanni Orantes wrote:
> **
>
>
> I got you (that's why you put it in the same email trail - for us to
> assume a conversion from principal to rental); I'm slow on the uptake
> today. Regardless of that, same analysis. If it is being rented, I would
> characterize it as rental and would value and bifurcate under 506. I have
> never had the UST get involved in 506 motions - only in elegibility.
> However, the banks' objection is usually what the UST says, i.e., that it
> was acquired as a residence. Look at Dennis McGoldrick's comment earlier
> -- some DOT's specify that the borrower has to live in the property for a
> certain time. If it does and that time has passed, I would argue we can
> treat it as a rental property. If there is no such specification, I would
> say the borrower is free to use it as a rental; otherwise, people could
> never buy another house and leave their original house as a rental -- I
> don't think there is anything wrong with that or that there is some
> impropriety in doing it.
>
> --
> Giovanni Orantes, Esq.
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 1980
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
>
>
>
Thanks everyone. I think the DOT and loan docs would probably be given most of the weight in determining whether we can bifurcate under 506.
On Mon, Mar 5, 2012 at 11:39 AM, Giovanni Orantes <go@gobklaw.com> wrote:
I got you (that's why you put it in the same email trail - for us to assume a conversion from principal to rental); I'm slow on the uptake today. Regardless of that, same analysis. If it is being rented, I would characterize it as rental and would value and bifurcate under 506. I have never had the UST get involved in 506 motions - only in elegibility. However, the banks'objection is usually what the UST says, i.e., that it was acquired as a residence. Look at Dennis McGoldrick&
The post was migrated from Yahoo.

I got you (that's why you put it in the same email trail - for us to assume
a conversion from principal to rental); I'm slow on the uptake today.
Regardless of that, same analysis. If it is being rented, I would
characterize it as rental and would value and bifurcate under 506. I have
never had the UST get involved in 506 motions - only in elegibility.
However, the banks' objection is usually what the UST says, i.e., that it
was acquired as a residence. Look at Dennis McGoldrick's comment earlier
certain time. If it does and that time has passed, I would argue we can
treat it as a rental property. If there is no such specification, I would
say the borrower is free to use it as a rental; otherwise, people could
never buy another house and leave their original house as a rental -- I
don't think there is anything wrong with that or that there is some
impropriety in doing it.
Giovanni Orantes, Esq.
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 1980
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
I got you (that's why you put it in the same email trail - for us to assume a conversion from principal to rental); I'm slow on the uptake today. Regardless of that, same analysis. If it is being rented, I would characterize it as rental and would value and bifurcate under 506. I have never had the UST get involved in 506 motions - only in elegibility. that it was acquired as a residence. Look at Dennis McGoldrick's comment earlier -- some DOT's specify that the borrower has to live in the property fora certain time. If it does and that time has passed, I would argue we can treat it as a rental property. If there is no such specification, I would say the borrower is free to use it as a rental; otherwise, people could never buy another house and leave their original house as a rental -- I don't think there is anything wrong with that or that there is some impropriety in doing it.
-- Giovanni Orantes, Esq. Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.com
website: www.gobklaw.com

The post was migrated from Yahoo.

What if the debtor had to move out and rent out the home ? Does that
convert it from a primary residence to a non-primary ?
On Sun, Mar 4, 2012 at 7:43 PM, Dennis wrote:
> **
>
>
> 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 ?
>
> On Thu, Mar 1, 2012 at 2:28 PM, Dennis easky1@yahoo.com> wrote:
>
>> **
>>
>>
>> That is the position I take.
>>
>> D
>>
>> Sent from my iPhone
>>
>> On 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. 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 theyve moved out with
>> the hope it will give them profit at some point. Is 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.****
>>
>> ** **
>>
>> 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 (800) 360-5161****
>>
>> >* sblever@leverlaw.com****
>>
>> > www.leverlaw.com****
>>
>> ** **
>>
>>
>
>
> --
> 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
>
>
>
What if the debtor had to move out and rent out the home ? Does that convert it from a primary residence to a non-primary ?
On Sun, Mar 4, 2012 at 7:43 PM, Dennis <easky1@yahoo.com> wrote:
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.
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.
Law Offices of Steven B. Lever
>> Steven B. Lever
>( Tel.
The post was migrated from Yahoo.

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 wrote:
> **
>
>
> That is the position I take.
>
> D
>
> Sent from my iPhone
>
> On Mar 1, 2012, at 10:20 AM, "Steven B. Lever"
> 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. 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 theyve moved out with
> the hope it will give them profit at some point. Is 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.****
>
> ** **
>
> 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 (800) 360-5161****
>
> >* sblever@leverlaw.com****
>
> > www.leverlaw.com****
>
> ** **
>
>
>
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
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. ugh 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.
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.
Law Offices of Steven B. Lever
>> Steven B. Lever
>( Tel.
The post was migrated from Yahoo.