Central District Consumer Bankruptcy Attorney's Association

I have been having trouble posting - the last one never appeared. Try again. Yes some of the trustee's in LV have been attempting these "carve outs". However, claiming a legitimate homestead exemption ($550,000 in Nevada)will block any attempt to sell the property out from under the Debtors. Also, the Lender must agree - which is not happening in many cases.
>
> As I understand it, this is prevalent in Las Vegas. Sam, perhaps you have some insight ?
>
> Sent from my iPhone
> Law Office of Eric Alan Mitnick
> (310) 792-5864 MitnickLaw@...
> Communications and attachments may be confidential and attorney-client privileged.
>
> On Nov 28, 2012, at 7:04 PM, "Steven B. Lever" wrote:
>
> > Jeff;
> >
> >
> >
> > First, thanks for sharing this horror story. If Stephen King were a bankruptcy trustee he couldnt do better to put a chill in debtors and their attorneys.
> >
> >
> >
> > Perhaps we need a Tara Toomey like effort for motion to abandon, creating our own form with P&As and just fill in the blanks and hit her with said motions every time, thereby increasing the cost of this overreaching transaction that will stress the hell out of our clients.
> >
> >
> >
> > Of course, the quality of the P&A which depends on whether the law allows Trustees to take such speculative actions that depend on the kindness of secured creditors and the craziness and hunger of realtors. Ive no idea if this is part of the business judgment rule or not, but it sure seems like a stretch to me.
> >
> >
> >
> > Steve
> >
> >
> >
> > Steven B. Lever
> >
> >
> >
Of jbsesq1965
> > Sent: Wednesday, November 28, 2012 5:39 PM
> > To: cdcbaa@yahoogroups.com
> > Subject: [cdcbaa] Never Heard This One Before
> >
> >
> >
> >
> >
> > PC calls for a second opinion on a matter. He is in Chapter 7 in RS, judge is MW and Chapter 7 Trustee is Linda Bui.
> >
> > He has a house that is underwater with a first and second mortgage. At filing he is 5 payments down to CitiMortgage, he is NOT in foreclosure, and they are accepting payments for the last 6 months so he isn't getting further behind. Moreover, Citi offered him a possible modification (in writing) under the NMS program which he is actively pursing and Citi even sent him a "pre-approval" letter that says as long as he gets the usual list of docs into them, they will modify the mortgage and reduce the principal to Current Market Value and capitalize the arrears so he's not 5 payme nts down anymore. Citi has NOT asked for relief from stay.
> >
> > At the 341(a) last month Linda Bui makes a demand that he provide proof that he is "modifing" and asks that he keep her apprised of the modification efforts. When PC's current lawyer asks Linda why this is necessary, she says that if he doesn't modify the loan, she intends to sell the house in a "short sale" and ask Citi and the second lender for a "carve out" to pay unsecured creditors.
> >
> > I have never heard of such a thing! Maybe if Linda is convinced the debtor is serious about modification she will back down, but thinking this through there seems to be something wrong about a trustee listing the property for sale under 363 in the hopes that she can get a short sale negotiator to carve out a few bucks for the estate, when the debtor is not in foreclosure, the property is upside down and the debtor is no where near at the end of his proverbial rope in terms of options to w ork it out with Citi. Assume the debtor has used all available exemptions on other stuff so he can't dissuade Linda by amending C to exempt her potential/theoretical carve out.
> >
> > There is a part of me that says this is outrageous. There is another part of me that says if an enterprising trustee finds a unique way to generate funds for the estate, what is to stop her?
> >
> > Anyway I'd love to hear what the group says and just wanted this posted as a possible warning of yet one more thing we practitioners may have to warn our clients about in the right circumstances.
> >
> > BTW-My advice was that if trustee won't back down after an exchange of e-mails, and information about the seriousness of the loan modification: Motion to Compel Abandonment of the house. It has no equity and the trustee's suggestion that she "might" squeezee a few bucks out in a short sale is pure speculation.
> >
> > Jeffrey B. Smith**
> > CURD, GALINDO & SMITH, L.L.P.
> > 301 East Ocean Blvd. #1700
> > Long Beach, CA 90802
> > (562) 624-1177
> > (562) 624-1178 fax
> > (310) 993-6560 cellular
> > www.expertbk.com
> >
> > **Certified By The State Bar
> > Of California As A Specialist
> > In Bankruptcy Law
> >
> >
> >
>

The post was migrated from Yahoo.

Hi Jon,
Don't think we're dealing with tax liens here--were talking mortgage liens here. Trustee will make deals with mortgage company to short sale debtor's home out from under him. I've had this happen. Used tactics only your bro would understand to get out of it!
Sincerely,
Tyson M. Takeuchi, Esq.
Tyson M. Takeuchi
Certified
Bankruptcy Specialist*^
Law Offices of Tyson M. Takeuchi
1100
Wilshire Blvd., Ste. 2606
Los Angeles, CA 90017
tel: (213)
637-1566
fax: (888) 977-6310
*By State Bar of California Board of
Legal Specialization
^Consumer Bankruptcy Specialist Certified by
American Board of Certification
To: cdcbaa@yahoogroups.com
Date: Sat, 1 Dec 2012 21:08:14 +0000
Subject: [cdcbaa] Re: Never Heard This One Before
Jeffrey and Jeffrey,
I'm a little surprised at the brohaha. I think this conduct by the trustee is routine if the IRS has a lien. The IRS will definitely let the estate have some of the proceeds if the trustee will do the work. I don't see why it is different if the junior lienholder is a bank. Having said that, I have never heard of a bank doing it and I agree absolutely that the right reaction is to oppose it and be insulted. But I'm not sure that is a winner.
>
> I don't know Larry, that is an interesting point, but I think that perverts the whole concept and history of the homestead exemption, if there is a valid homestead exemption, it I don't know that a bankruptcy judge would permit securd and trustee to sell.
>
> Sent from my iPad
>
> On Nov 28, 2012, at 9:05 PM, "Larry Simons" wrote:
>
>
>
> Don't forget a "carve out" by the secured creditors would come before any exemption. The trustee would have the same priority as the lienholder agreeing to the carve out.
> Sent from my Blackberry
>
> Sent: Wednesday, November 28, 2012 05:59 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Never Heard This One Before
>
>
>
> So, i guess the debtor hasn't claimed any homestead exemption, and used up all his wildcard on his string of racing ponies. An exemption on the property would certainly quiet down the trustee.
>
> You can bet there is a hungry real estate broker driving this one.
> Jason
> Jason Wallach
> jwallach@...
>
>
>
> On Nov 28, 2012, at 5:51 PM, Stella Havkin wrote:
>
>
>
> It is going on right now. Lindas firm is doing it for Sam Leslie on a rental property of my debtors that is over $1,500,000 upside down. I do not know if they will be successful.
>
> Stella Havkin
>
>
>
> Certified Bankruptcy Law Specialist " The State Bar of California Board of Legal Specialization
> Certified Consumer Bankruptcy Law Specialist " The American Board of Certification
>
>
>
a@yahoogroups.com] On Behalf Of jbsesq1965
> Sent: Wednesday, November 28, 2012 5:39 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Never Heard This One Before
>
>
>
> PC calls for a second opinion on a matter. He is in Chapter 7 in RS, judge is MW and Chapter 7 Trustee is Linda Bui.
>
> He has a house that is underwater with a first and second mortgage. At filing he is 5 payments down to CitiMortgage, he is NOT in foreclosure, and they are accepting payments for the last 6 months so he isn't getting further behind. Moreover, Citi offered him a possible modification (in writing) under the NMS program which he is actively pursing and Citi even sent him a "pre-approval" letter that says as long as he gets the usual list of docs into them, they will modify the mortgage and reduce the principal to Current Market Value and capitalize the arrears so he's not 5 payments down anymore. Citi has NOT asked for relief from stay.
>
> At the 341(a) last month Linda Bui makes a demand that he provide proof that he is "modifing" and asks that he keep her apprised of the modification efforts. When PC's current lawyer asks Linda why this is necessary, she says that if he doesn't modify the loan, she intends to sell the house in a "short sale" and ask Citi and the second lender for a "carve out" to pay unsecured creditors.
>
> I have never heard of such a thing! Maybe if Linda is convinced the debtor is serious about modification she will back down, but thinking this through there seems to be something wrong about a trustee listing the property for sale under 363 in the hopes that she can get a short sale negotiator to carve out a few bucks for the estate, when the debtor is not in foreclosure, the property is upside down and the debtor is no where near at the end of his proverbial rope in terms of options to work it out with Citi. Assume the debtor has used all available exemptions on other stuff so he can't dissuade Linda by amending C to exempt her potential/theoretical carve out.
>
> There is a part of me that says this is outrageous. There is another part of me that says if an enterprising trustee finds a unique way to generate funds for the estate, what is to stop her?
>
> Anyway I'd love to hear what the group says and just wanted this posted as a possible warning of yet one more thing we practitioners may have to warn our clients about in the right circumstances.
>
> BTW-My advice was that if trustee won't back down after an exchange of e-mails, and information about the seriousness of the loan modification: Motion to Compel Abandonment of the house. It has no equity and the trustee's suggestion that she "might" squeezee a few bucks out in a short sale is pure speculation.
>
> Jeffrey B. Smith**
> CURD, GALINDO & SMITH, L.L.P.
> 301 East Ocean Blvd. #1700
> Long Beach, CA 90802
> (562) 624-1177
> (562) 624-1178 fax
> (310) 993-6560 cellular
> www.expertbk.com
>
> **Certified By The State Bar
> Of California As A Specialist
> In Bankruptcy Law
>

The post was migrated from Yahoo.

Jeffrey and Jeffrey,
I'm a little surprised at the brohaha. I think this conduct by the trustee is routine if the IRS has a lien. The IRS will definitely let the estate have some of the proceeds if the trustee will do the work. I don't see why it is different if the junior lienholder is a bank. Having said that, I have never heard of a bank doing it and I agree absolutely that the right reaction is to oppose it and be insulted. But I'm not sure that is a winner.
>
> I don't know Larry, that is an interesting point, but I think that perverts the whole concept and history of the homestead exemption, if there is a valid homestead exemption, it I don't know that a bankruptcy judge would permit securd and trustee to sell.
>
> Sent from my iPad
>
> On Nov 28, 2012, at 9:05 PM, "Larry Simons" wrote:
>
>
>
> Don't forget a "carve out" by the secured creditors would come before any exemption. The trustee would have the same priority as the lienholder agreeing to the carve out.
> Sent from my Blackberry
>
> Sent: Wednesday, November 28, 2012 05:59 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Never Heard This One Before
>
>
>
> So, i guess the debtor hasn't claimed any homestead exemption, and used up all his wildcard on his string of racing ponies. An exemption on the property would certainly quiet down the trustee.
>
> You can bet there is a hungry real estate broker driving this one.
> Jason
> Jason Wallach
> jwallach@...
>
>
>
> On Nov 28, 2012, at 5:51 PM, Stella Havkin wrote:
>
>
>
> It is going on right now. Lindas firm is doing it for Sam Leslie on a rental property of my debtors that is over $1,500,000 upside down. I do not know if they will be successful.
>
> Stella Havkin
>
>
>
> Certified Bankruptcy Law Specialist " The State Bar of California Board of Legal Specialization
> Certified Consumer Bankruptcy Law Specialist " The American Board of Certification
>
>
>
a@yahoogroups.com] On Behalf Of jbsesq1965
> Sent: Wednesday, November 28, 2012 5:39 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Never Heard This One Before
>
>
>
> PC calls for a second opinion on a matter. He is in Chapter 7 in RS, judge is MW and Chapter 7 Trustee is Linda Bui.
>
> He has a house that is underwater with a first and second mortgage. At filing he is 5 payments down to CitiMortgage, he is NOT in foreclosure, and they are accepting payments for the last 6 months so he isn't getting further behind. Moreover, Citi offered him a possible modification (in writing) under the NMS program which he is actively pursing and Citi even sent him a "pre-approval" letter that says as long as he gets the usual list of docs into them, they will modify the mortgage and reduce the principal to Current Market Value and capitalize the arrears so he's not 5 payments down anymore. Citi has NOT asked for relief from stay.
>
> At the 341(a) last month Linda Bui makes a demand that he provide proof that he is "modifing" and asks that he keep her apprised of the modification efforts. When PC's current lawyer asks Linda why this is necessary, she says that if he doesn't modify the loan, she intends to sell the house in a "short sale" and ask Citi and the second lender for a "carve out" to pay unsecured creditors.
>
> I have never heard of such a thing! Maybe if Linda is convinced the debtor is serious about modification she will back down, but thinking this through there seems to be something wrong about a trustee listing the property for sale under 363 in the hopes that she can get a short sale negotiator to carve out a few bucks for the estate, when the debtor is not in foreclosure, the property is upside down and the debtor is no where near at the end of his proverbial rope in terms of options to work it out with Citi. Assume the debtor has used all available exemptions on other stuff so he can't dissuade Linda by amending C to exempt her potential/theoretical carve out.
>
> There is a part of me that says this is outrageous. There is another part of me that says if an enterprising trustee finds a unique way to generate funds for the estate, what is to stop her?
>
> Anyway I'd love to hear what the group says and just wanted this posted as a possible warning of yet one more thing we practitioners may have to warn our clients about in the right circumstances.
>
> BTW-My advice was that if trustee won't back down after an exchange of e-mails, and information about the seriousness of the loan modification: Motion to Compel Abandonment of the house. It has no equity and the trustee's suggestion that she "might" squeezee a few bucks out in a short sale is pure speculation.
>
> Jeffrey B. Smith**
> CURD, GALINDO & SMITH, L.L.P.
> 301 East Ocean Blvd. #1700
> Long Beach, CA 90802
> (562) 624-1177
> (562) 624-1178 fax
> (310) 993-6560 cellular
> www.expertbk.com
>
> **Certified By The State Bar
> Of California As A Specialist
> In Bankruptcy Law
>

The post was migrated from Yahoo.

Wow. Horror story is right.
At the end of the day, an "enterprising trustee" is making a business
decision. Business decisions only make sense if they consistently generate a
profit. Losing business decisions don't get repeated. If debtors
consistently resist and litigate, the cost of this slick move is increased.
The likelihood of it working to fruition, is, (as you say) pure speculation.
So, in the absence of getting one definitive ruling against this tactic, we
may consider making a sustained effort to resist Chapter 7 trustees so that
their only conclusion on this move is: cost + speculation = lack of profit.
And, at the very least, this is one more paragraph for our retainer
agreements.
Hale
________________________________

The post was migrated from Yahoo.

I just heard this same story in another forum I post responses on
from a client in North Carolina (or maybe it was Florida). She was
being told she had to sign off on the short sale. In that case, she
wasn't trying to keep the property and had in fact surrendered it,
but the Trustee had done a carve out for fees and wanted to sell it
in a short sale.
*************************
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)
web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of California
Board of Legal Specialization
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at

The post was migrated from Yahoo.

As I understand it, this is prevalent in Las Vegas. Sam, perhaps you have some insight ?
Sent from my iPhone
Law Office of Eric Alan Mitnick
(310) 792-5864 MitnickLaw@aol.com
Communications and attachments may be confidential and attorney-client privileged.
On Nov 28, 2012, at 7:04 PM, "Steven B. Lever" wrote:
> Jeff;
>
>
>
> First, thanks for sharing this horror story. If Stephen King were a bankruptcy trustee he couldnt do better to put a chill in debtors and their attorneys.
>
>
>
> Perhaps we need a Tara Toomey like effort for motion to abandon, creating our own form with P&As and just fill in the blanks and hit her with said motions every time, thereby increasing the cost of this overreaching transaction that will stress the hell out of our clients.
>
>
>
> Of course, the quality of the P&A which depends on whether the law allows Trustees to take such speculative actions that depend on the kindness of secured creditors and the craziness and hunger of realtors. Ive no idea if this is part of the business judgment rule or not, but it sure seems like a stretch to me.
>
>
>
> Steve
>
>
>
> Steven B. Lever
>
>
>
jbsesq1965
> Sent: Wednesday, November 28, 2012 5:39 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Never Heard This One Before
>
>
>
>
>
> PC calls for a second opinion on a matter. He is in Chapter 7 in RS, judge is MW and Chapter 7 Trustee is Linda Bui.
>
> He has a house that is underwater with a first and second mortgage. At filing he is 5 payments down to CitiMortgage, he is NOT in foreclosure, and they are accepting payments for the last 6 months so he isn't getting further behind. Moreover, Citi offered him a possible modification (in writing) under the NMS program which he is actively pursing and Citi even sent him a "pre-approval" letter that says as long as he gets the usual list of docs into them, they will modify the mortgage and reduce the principal to Current Market Value and capitalize the arrears so he's not 5 payme nts down anymore. Citi has NOT asked for relief from stay.
>
> At the 341(a) last month Linda Bui makes a demand that he provide proof that he is "modifing" and asks that he keep her apprised of the modification efforts. When PC's current lawyer asks Linda why this is necessary, she says that if he doesn't modify the loan, she intends to sell the house in a "short sale" and ask Citi and the second lender for a "carve out" to pay unsecured creditors.
>
> I have never heard of such a thing! Maybe if Linda is convinced the debtor is serious about modification she will back down, but thinking this through there seems to be something wrong about a trustee listing the property for sale under 363 in the hopes that she can get a short sale negotiator to carve out a few bucks for the estate, when the debtor is not in foreclosure, the property is upside down and the debtor is no where near at the end of his proverbial rope in terms of options to w ork it out with Citi. Assume the debtor has used all available exemptions on other stuff so he can't dissuade Linda by amending C to exempt her potential/theoretical carve out.
>
> There is a part of me that says this is outrageous. There is another part of me that says if an enterprising trustee finds a unique way to generate funds for the estate, what is to stop her?
>
> Anyway I'd love to hear what the group says and just wanted this posted as a possible warning of yet one more thing we practitioners may have to warn our clients about in the right circumstances.
>
> BTW-My advice was that if trustee won't back down after an exchange of e-mails, and information about the seriousness of the loan modification: Motion to Compel Abandonment of the house. It has no equity and the trustee's suggestion that she "might" squeezee a few bucks out in a short sale is pure speculation.
>
> Jeffrey B. Smith**
> CURD, GALINDO & SMITH, L.L.P.
> 301 East Ocean Blvd. #1700
> Long Beach, CA 90802
> (562) 624-1177
> (562) 624-1178 fax
> (310) 993-6560 cellular
> www.expertbk.com
>
> **Certified By The State Bar
> Of California As A Specialist
> In Bankruptcy Law
>
>
>
As I understand it, this is prevalent in Las Vegas. Sam, perhaps you have some insight ?Sent from my iPhoneLaw Office of Eric Alan Mitnick (310) 792-5864 MitnickLaw@aol.comCommunications and attachments may be confidential and attorney-client privileged. On Nov 28, 2012, at 7:04 PM, "Steven B. Lever" <sblever@leverlaw.com> wrote:

First, thanks for sharing this horror story. If Stephen King were a bankruptcy trustee he couldnt do better to put a chill in debtors and their attorneys.
The post was migrated from Yahoo.

To carry this point a bit further, if a trustee works with a broker who is
willing to "contribute" a portion of his commission to the estate, does
that justify the trustee selling an undersecured property out from under a
Ch 7 debtor ? This wouldn't be pure speculation if a hungry broker is
willing.
Robert Kevin Lee | Certified Specialist in Bankruptcy Law
State Bar of California, Board of Legal Specialization
American Board of Certification
3435 Wilshire Boulevard, Suite 1035, Los Angeles, CA 90010
p. 888-777-0839 f. 888-777-0849 c. 310-384-4990 e. boblee.rkl@gmail.com
CONFIDENTIALITY NOTICE: The information contained herein may be privileged
and protected by the attorney/client and/or other privilege. It is
confidential in nature and intended for use by the intended addressee only.
If you are not the intended recipient, you are hereby expressly prohibited
from dissemination distribution, copy or any use whatsoever of this
transmission and its contents. If you receive this transmission in error,
please reply or call the sender and arrangements will be made to retrieve
the originals from you at no charge.
On Wed, Nov 28, 2012 at 6:54 PM, Stella Havkin wrote:
> **
>
>
> Does not .
>
> Sent from my Stella Havkin's IPhone
>
> On Nov 28, 2012, at 6:41 PM, Giovanni Orantes wrote:
>
>
>
> With a rental property over $1.5M upside down, it sounds like it should
> have be an 11 if the Debtor wants to keep 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
>
> Board Certified - Business Bankruptcy Law - American Board of Certification
> Board Certified - Consumer Bankruptcy Law - American Board of Certification
>
>
>
To carry this point a bit further, if a trustee works with a broker who is willing to "contribute" a portion of his commission to the estate, does that justify the trustee selling an undersecured property out from under a Ch 7 debtor ? This wouldn't be pure speculation if a hungry broker is willing.
Robert Kevin Lee | Certified Specialist in Bankruptcy Law
The post was migrated from Yahoo.

Jeff;
First, thanks for sharing this horror story. If Stephen King were a
bankruptcy trustee he couldn't do better to put a chill in debtors and
their attorneys.
Perhaps we need a Tara Toomey like effort for motion to abandon,
creating our own form with P&As and just fill in the blanks and hit her
with said motions every time, thereby increasing the cost of this
overreaching transaction that will stress the hell out of our clients.
Of course, the quality of the P&A which depends on whether the law
allows Trustees to take such speculative actions that depend on the
kindness of secured creditors and the craziness and hunger of realtors.
I've no idea if this is part of the business judgment rule or not, but
it sure seems like a stretch to me.
Steve
Steven B. Lever

The post was migrated from Yahoo.

Does not .
Sent from my Stella Havkin's IPhone
On Nov 28, 2012, at 6:41 PM, Giovanni Orantes wrote:
> With a rental property over $1.5M upside down, it sounds like it should have be an 11 if the Debtor wants to keep 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
>
> Board Certified - Business Bankruptcy Law - American Board of Certification
> Board Certified - Consumer Bankruptcy Law - American Board of Certification
>
>

The post was migrated from Yahoo.

With a rental property over $1.5M upside down, it sounds like it should
have be an 11 if the Debtor wants to keep 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
Board Certified - Business Bankruptcy Law - American Board of Certification
Board Certified - Consumer Bankruptcy Law - American Board of Certification
With a rental property over $1.5M upside down, it sounds like it should have be an 11 if the Debtor wants to keep it.-- Giovanni Orantes, Esq. Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 1980
Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.comwebsite: www.gobklaw.com
Board Certified - Business Bankruptcy Law - American Board of CertificationBoard Certified - Consumer Bankruptcy Law - American Board of Certification

The post was migrated from Yahoo.