Treatment of discharged liability in subsequent Ch. 11 case
Posted: Tue Aug 04, 2015 12:21 am
You should look at the Loop 76 line of cases which may help you confirm the
Plan even if there is no 1111(b) election.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
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On Mon, Aug 3, 2015 at 8:17 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] wrote:
>
>
> Thanks Nick.
>
> The numbers I gave were hypothetical. The actual numbers put him over the
> limit for Ch. 13.
>
> The answer to my question turns out to be found in 1111(b)(1), per
> Giovanni Orantes.
>
> But in a Chapter 13, wouldn't the "stripped down" amount need to be paid
> 100% during the Plan term?
>
> I recall that being the case and that would be impossible at least in this
> case.
>
>
> On 8/3/2015 7:50 PM, Nicholas Gebelt ngebelt@gebeltlaw.com [cdcbaa] wrote:
>
> Dear Mark,
>
>
>
> Based on the numbers you provided, the debtor is eligible to do a Chapter
> 13 since the debts are under the 109(e) limits. This avoids the need to
> have creditors vote on the plan. And 1322(b)(2) allows you to modify the
> rights of the secured creditor, since the collateral isnt the debtors
> principal residence.
>
>
>
> I had a client for whom I did a Chapter 13, in which the *in personam * mortgage
> liability was discharged. A few years later, the same client wanted to do
> another Chapter 13 to strip off a wholly unsecured second on his principal
> residence. As I said, the *in personam *liability had been discharged in
> the previous Chapter 13. I stated in Schedule A and in section V. F. of
> the plan that we would do a lien strip, and make no provision for paying
> the debt in the plan since the *in personam *liability had already been
> discharged. In the (amended to add a previously unknown party in the
> mortgage chain) adversary complaint (the judge was Zurzolo) I stated that
> the claim would be disallowed since the *in personam *liability had
> already been discharged. Zurzolo granted the motion for default judgment,
> and the order included my language in paragraph 2. I have attached a copy
> of the order for your reference.
>
>
>
> In sum, I would file a Chapter 13 and avoid the voting issue altogether.
>
>
>
> All the best,
>
>
>
> Nick
>
>
>
> *Nicholas Gebelt*
>
>
>
> Nicholas Gebelt, Ph.D., J.D.
>
> Attorney at Law
>
> Certified Bankruptcy Law Specialist State Bar of California Board of
> Legal Specialization
>
> Commissioner, California State Bars Bankruptcy Law Advisory Committee
>
>
>
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> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com
> ]
> *Sent:* Monday, August 03, 2015 11:59 AM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* [cdcbaa] Treatment of discharged liability in subsequent Ch.
> 11 case
>
>
>
>
>
>
>
> Esteemed Chapter 11 colleagues:
>
> *Facts*:
>
> Individual debtor owns one property which has been rented out for several
> years.
>
> Property value is $500,000 and there is $1.1 million owed against it to
> one lender.
>
> Debtor has no other assets to speak of.
>
> The only other debt debtor has is a $6,000 personal loan (unsecured).
>
> Debtor filed a Ch. 7 in 2010 and received a discharge, and the above real
> estate and mortgage debts were included.
>
> *Question*:
>
> 1. Assuming the mortgage creditor does NOT elect under 1111(b), if the
> debtor seeks to value this claim under 506 and "strip" it down to the FMV,
> what happens to the unsecured portion of the stripped off lien? Must it be
> included in the unsecured creditor voting class, or is it gone because the
> in personam liability was discharged in the prior Chapter 7?
>
> This obviously makes a big difference because without having to include
> it, debtor can easily do a 100% plan and will be able to get the one
> impaired class to vote for the plan. Without it, the formerly secured
> creditor will control voting in the unsecured class.
>
> I suspect this has to do with the difference between a debt and a claim
> and it must be treated as an unsecured claim, but I'm hoping I might be
> wrong.
>
>
> ******************************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (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
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office
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> disclosure, copy, distribution or use of the contents of this message is
> prohibited.
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> 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.
>
>
>
>
>
> --
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (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
> ________________________________________________
> 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.
>
>
>
> --
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (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
> ________________________________________________
> 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.
>
>
>
You should look at the Loop 76 line of cases which may help you confirm the Plan even if there is no 1111(b) election.Sincerely,Michael Avanesian, Esq.Simon Resnik Hayes, LLP15233 Ventura Blvd., Suite 250Sherman Oaks, CA 91403Tel: 818.783.6251 | Cel: 818.817.1725Confidentiality:This electronic transmission and its contents are legally privileged and confidential information and intended solely for the use of the addressee. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, copying or other use of this message and its contents is strictly prohibited. If you have received this transmission in error, please reply to us immediately and delete this message from your directory.IRS Circular 230 Disclosure:To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, 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 herein.
On Mon, Aug 3, 2015 at 8:17 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] <
Thanks Nick.
The numbers I gave were hypothetical. The actual numbers put him
over the limit for Ch. 13.
The answer to my question turns out to be found in 1111(b)(1), per
Giovanni Orantes.
But in a Chapter 13, wouldn't the "stripped down" amount need to
be paid 100% during the Plan term?
I recall that being the case and that would be impossible at least
in this case.
On 8/3/2015 7:50 PM, Nicholas Gebelt ngebelt@gebeltlaw.com
[cdcbaa] wrote:
Dear
Mark,
Based
on the numbers you provided, the debtor is eligible to do a
Chapter 13 since the debts are under the 109(e) limits. This avoids the need to have creditors vote on the plan.
And 1322(b)(2) allows you to modify the rights of the
secured creditor, since the collateral isnt the debtor principal residence.
I
had a client for whom I did a Chapter 13, in which the
in personam mortgage liability was discharged. few years later, the same client wanted to do another
Chapter 13 to strip off a wholly unsecured second on his
principal residence. As I said, the
in personam liability had been discharged in the
previous Chapter 13. I stated in Schedule A and in section
V. F. of the plan that we would do a lien strip, and make no
provision for paying the debt in the plan since the
in personam liability had already been discharged.
In the (amended to add a previously unknown party in the
mortgage chain) adversary complaint (the judge was Zurzolo)
I stated that the claim would be disallowed since the
in personam liability had already been discharged.
Zurzolo granted the motion for default judgment, and the
order included my language in paragraph 2. I have attached
a copy of the order for your reference.
In
sum, I would file a Chapter 13 and avoid the voting issue
altogether.
All
the best,
Nick
The post was migrated from Yahoo.