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cram down of investment property in ch 13
Kirk: cram down is the amount you can force as the payment in a 13,12, or 11 to a class of creditors, So you are referring here, to a cram down amount. Strip down is the amount you have to pay a single creditor (in most cases) due to 506a and d.
d
Sent from my iPad
On May 14, 2013, at 7:21 AM, Kirk Brennan wrote:
> I meant strip down, not cram down, as this relates to a chapter 13 case.
>
> On May 14, 2013 12:04 AM, "cdcbaa" wrote:
>>
>> The cram down amount is the amount you have to pay each class, including the unsecured creditors, to pass the chapter 7 test. (don't forget, if you bifurcate a claim, part is unsecured and you must pass the chapter 7 test with regard to the unsecured portion of the bifurcated claim.)
>>
>> In a 13, the max term is 60 months, so yes, if you want to avoid chapter 11, 60 months is the max in a 13.
>>
>> d
>>
>>
>> On May 9, 2013, at 9:20 AM, Kirk Brennan wrote:
>>
>>>
>>> So the cram down has to be paid in the 5 year period?
>>>
>>> On May 9, 2013 9:00 AM, "sambenevento" wrote:
>>>>
>>>>
>>>> The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
>>>>
>>>> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
>>>> >
>>>> > Non-resident of California wants to file a chapter 13 to cram down (motion
>>>> > to value) an investment property owned in California.
>>>> > Anyone see a problem with that?
>>>> > Is an opposition to confirmation by the ch 13 trustee that the property is
>>>> > not necessary for a reorganization likely?
>>>> >
>>>> > Thanks,
>>>> > --
>>>> > Kirk Brennan
>>>> > California Law Office, P.C.
>>>> >
>>>> > CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
>>>> > exclusive and confidential use of the intended recipient. If you are not
>>>> > the intended recipient, please do not read, distribute or take action in
>>>> > reliance on this message. If you have received this message in error,
>>>> > please notify us immediately by return e-mail and promptly delete this
>>>> > message and its attachments from your computer system. We do not waive
>>>> > attorney-client or work product privilege by the transmission of this
>>>> > message.
>>>> > TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
>>>> > constitute a "reliance opinion" as defined in IRS Circular 230 and may not
>>>> > be used to establish reasonable reliance on the opinion of counsel for the
>>>> > purpose of avoiding the penalty imposed by Section 6662A of the Internal
>>>> > Revenue Code. The firm provides reliance opinions only in formal opinion
>>>> > letters containing the signature of a director.
>>>> >
>>>>
>>>
>>
>
>
The post was migrated from Yahoo.
I meant strip down, not cram down, as this relates to a chapter 13 case.
On May 14, 2013 12:04 AM, "cdcbaa" wrote:
> **
>
>
> The cram down amount is the amount you have to pay each class, including
> the unsecured creditors, to pass the chapter 7 test. (don't forget, if you
> bifurcate a claim, part is unsecured and you must pass the chapter 7 test
> with regard to the unsecured portion of the bifurcated claim.)
>
> In a 13, the max term is 60 months, so yes, if you want to avoid chapter
> 11, 60 months is the max in a 13.
>
> d
>
>
> On May 9, 2013, at 9:20 AM, Kirk Brennan wrote:
>
>
>
> So the cram down has to be paid in the 5 year period?
> On May 9, 2013 9:00 AM, "sambenevento" wrote:
>
>> **
>>
>>
>>
>> The trustee will object if the Debtor is subsidizing the property. This
>> can be avoided if the plan proposes a straight-line amortization of the
>> cram down amount over 60 months - and then make sure that the rental income
>> covers the portion of the plan payment that is attributable to the cram
>> down, plus holding expenses (such as anticipated repairs, taxes,
>> insurance). That is why these rental real estate cram downs seem to work
>> much better on very low end properties. If the property is too valuable,
>> then you might have to try an artificially low plan payment (consistent
>> with the rental income) and have a balloon payment toward the end of the
>> plan. But you have to show how the balloon payment is going to be generated
>> (sale/refinance of the property?). This latter type of plan will likely
>> draw the objection.
>>
>> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
>> >
>> > Non-resident of California wants to file a chapter 13 to cram down
>> (motion
>> > to value) an investment property owned in California.
>> > Anyone see a problem with that?
>> > Is an opposition to confirmation by the ch 13 trustee that the property
>> is
>> > not necessary for a reorganization likely?
>> >
>> > Thanks,
>> > --
>> > Kirk Brennan
>> > California Law Office, P.C.
>> >
>> > CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
>> > exclusive and confidential use of the intended recipient. If you are not
>> > the intended recipient, please do not read, distribute or take action in
>> > reliance on this message. If you have received this message in error,
>> > please notify us immediately by return e-mail and promptly delete this
>> > message and its attachments from your computer system. We do not waive
>> > attorney-client or work product privilege by the transmission of this
>> > message.
>> > TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
>> > constitute a "reliance opinion" as defined in IRS Circular 230 and may
>> not
>> > be used to establish reasonable reliance on the opinion of counsel for
>> the
>> > purpose of avoiding the penalty imposed by Section 6662A of the Internal
>> > Revenue Code. The firm provides reliance opinions only in formal opinion
>> > letters containing the signature of a director.
>> >
>>
>>
>
I meant strip down, not cram down, as this relates to a chapter 13 case.
On May 14, 2013 12:04 AM, "cdcbaa" <cdcbaamailbox@gmail.com> wrote:
The cram down amount is the amount you have to pay each class, including the unsecured creditors, to pass the chapter 7 test. (don't forget, if you bifurcate a claim, part is unsecured and you must pass the chapter 7 test with regard to the unsecured portion of the bifurcated claim.)
In a 13, the max term is 60 months, so yes, if you want to avoid chapter 11, 60 months is the max in a 13.dOn May 9, 2013, at 9:20 AM, Kirk Brennan <kirkinhermosa@gmail.com> wrote:
So the cram down has to be paid in the 5 year period?
On May 9, 2013 9:00 AM, "sambenevento" <sam@southbaybk.com> wrote:
The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
@yahoogroups.com, Kirk Brennan <kirkinhermosa@...> wrote:
>
> Non-resident of California wants to file a chapter 13 to cram down (motion
> to value) an investment property owned in California.
> Anyone see a problem with that?
> Is an opposition to confirmation by the ch 13 trustee that the property is
> not necessary for a reorganization likely?
>
> Thanks,
> --
> Kirk Brennan
> California Law Office, P.C.
>
> CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> exclusive and confidential use of the intended recipient. If you are not
> the intended recipient, please do not read, distribute or take action in
> reliance on this message. If you have received this message in error,
> please notify us immediately by return e-mail and promptly delete this
> message and its attachments from your computer system. We do not waive
> attorney-client or work product privilege by the transmission of this
> message.
> TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> constitute a "reliance opinion" as defined in IRS Circular 230 and may not
> be used to establish reasonable reliance on the opinion of counsel for the
> purpose of avoiding the penalty imposed by Section 6662A of the Internal
> Revenue Code. The firm provides reliance opinions only in formal opinion
> letters containing the signature of a director.
>
The post was migrated from Yahoo.
The cram down amount is the amount you have to pay each class, including the unsecured creditors, to pass the chapter 7 test. (don't forget, if you bifurcate a claim, part is unsecured and you must pass the chapter 7 test with regard to the unsecured portion of the bifurcated claim.)
In a 13, the max term is 60 months, so yes, if you want to avoid chapter 11, 60 months is the max in a 13.
d
On May 9, 2013, at 9:20 AM, Kirk Brennan wrote:
> So the cram down has to be paid in the 5 year period?
>
> On May 9, 2013 9:00 AM, "sambenevento" wrote:
>>
>>
>> The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
>>
>> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
>> >
>> > Non-resident of California wants to file a chapter 13 to cram down (motion
>> > to value) an investment property owned in California.
>> > Anyone see a problem with that?
>> > Is an opposition to confirmation by the ch 13 trustee that the property is
>> > not necessary for a reorganization likely?
>> >
>> > Thanks,
>> > --
>> > Kirk Brennan
>> > California Law Office, P.C.
>> >
>> > CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
>> > exclusive and confidential use of the intended recipient. If you are not
>> > the intended recipient, please do not read, distribute or take action in
>> > reliance on this message. If you have received this message in error,
>> > please notify us immediately by return e-mail and promptly delete this
>> > message and its attachments from your computer system. We do not waive
>> > attorney-client or work product privilege by the transmission of this
>> > message.
>> > TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
>> > constitute a "reliance opinion" as defined in IRS Circular 230 and may not
>> > be used to establish reasonable reliance on the opinion of counsel for the
>> > purpose of avoiding the penalty imposed by Section 6662A of the Internal
>> > Revenue Code. The firm provides reliance opinions only in formal opinion
>> > letters containing the signature of a director.
>> >
>
>
The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
@yahoogroups.com, Kirk Brennan <kirkinhermosa@...> wrote:
>
> Non-resident of California wants to file a chapter 13 to cram down (motion
> to value) an investment property owned in California.
> Anyone see a problem with that?
> Is an opposition to confirmation by the ch 13 trustee that the property is
> not necessary for a reorganization likely?
>
> Thanks,
> --
> Kirk Brennan
> California Law Office, P.C.
>
> CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> exclusive and confidential use of the intended recipient. If you are not
> the intended recipient, please do not read, distribute or take action in
> reliance on this message. If you have received this message in error,
> please notify us immediately by return e-mail and promptly delete this
> message and its attachments from your computer system. We do not waive
> attorney-client or work product privilege by the transmission of this
> message.
> TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> constitute a "reliance opinion" as defined in IRS Circular 230 and may not
> be used to establish reasonable reliance on the opinion of counsel for the
> purpose of avoiding the penalty imposed by Section 6662A of the Internal
> Revenue Code. The firm provides reliance opinions only in formal opinion
> letters containing the signature of a director.
>
The post was migrated from Yahoo.
Are you discussing a strip down or a cram down? What is the cram down amount? Is that the percent to the unsecured creditors?
What class is being crammed down?
Which class voted against the plan and is being forced to accept the straight-line amortization?
WHY CAN YOU CRAM?
You can cram because you pass the chapter 7 test. You can strip because a particular creditor's security is less than the amount of the creditor's claim. The cram down amount only equals the strip down amount if there are no other assets that can be liquidated for unsecured creditors.
Please, we are bankruptcy lawyers here, don't mix the concepts.
d
On May 9, 2013, at 9:00 AM, "sambenevento" wrote:
>
> The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
>
> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
> >
> > Non-resident of California wants to file a chapter 13 to cram down (motion
> > to value) an investment property owned in California.
> > Anyone see a problem with that?
> > Is an opposition to confirmation by the ch 13 trustee that the property is
> > not necessary for a reorganization likely?
> >
> > Thanks,
> > --
> > Kirk Brennan
> > California Law Office, P.C.
> >
> > CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> > exclusive and confidential use of the intended recipient. If you are not
> > the intended recipient, please do not read, distribute or take action in
> > reliance on this message. If you have received this message in error,
> > please notify us immediately by return e-mail and promptly delete this
> > message and its attachments from your computer system. We do not waive
> > attorney-client or work product privilege by the transmission of this
> > message.
> > TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> > constitute a "reliance opinion" as defined in IRS Circular 230 and may not
> > be used to establish reasonable reliance on the opinion of counsel for the
> > purpose of avoiding the penalty imposed by Section 6662A of the Internal
> > Revenue Code. The firm provides reliance opinions only in formal opinion
> > letters containing the signature of a director.
> >
>
>
The post was migrated from Yahoo.
So the cram down has to be paid in the 5 year period?
On May 9, 2013 9:00 AM, "sambenevento" wrote:
> **
>
>
>
> The trustee will object if the Debtor is subsidizing the property. This
> can be avoided if the plan proposes a straight-line amortization of the
> cram down amount over 60 months - and then make sure that the rental income
> covers the portion of the plan payment that is attributable to the cram
> down, plus holding expenses (such as anticipated repairs, taxes,
> insurance). That is why these rental real estate cram downs seem to work
> much better on very low end properties. If the property is too valuable,
> then you might have to try an artificially low plan payment (consistent
> with the rental income) and have a balloon payment toward the end of the
> plan. But you have to show how the balloon payment is going to be generated
> (sale/refinance of the property?). This latter type of plan will likely
> draw the objection.
>
> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
> >
> > Non-resident of California wants to file a chapter 13 to cram down
> (motion
> > to value) an investment property owned in California.
> > Anyone see a problem with that?
> > Is an opposition to confirmation by the ch 13 trustee that the property
> is
> > not necessary for a reorganization likely?
> >
> > Thanks,
> > --
> > Kirk Brennan
> > California Law Office, P.C.
> >
> > CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> > exclusive and confidential use of the intended recipient. If you are not
> > the intended recipient, please do not read, distribute or take action in
> > reliance on this message. If you have received this message in error,
> > please notify us immediately by return e-mail and promptly delete this
> > message and its attachments from your computer system. We do not waive
> > attorney-client or work product privilege by the transmission of this
> > message.
> > TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> > constitute a "reliance opinion" as defined in IRS Circular 230 and may
> not
> > be used to establish reasonable reliance on the opinion of counsel for
> the
> > purpose of avoiding the penalty imposed by Section 6662A of the Internal
> > Revenue Code. The firm provides reliance opinions only in formal opinion
> > letters containing the signature of a director.
> >
>
>
>
So the cram down has to be paid in the 5 year period?
On May 9, 2013 9:00 AM, "sambenevento" <sam@southbaybk.com> wrote:
The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
@yahoogroups.com, Kirk Brennan <kirkinhermosa@...> wrote:
>
> Non-resident of California wants to file a chapter 13 to cram down (motion
> to value) an investment property owned in California.
> Anyone see a problem with that?
> Is an opposition to confirmation by the ch 13 trustee that the property is
> not necessary for a reorganization likely?
>
> Thanks,
> --
> Kirk Brennan
> California Law Office, P.C.
>
> CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> exclusive and confidential use of the intended recipient. If you are not
> the intended recipient, please do not read, distribute or take action in
> reliance on this message. If you have received this message in error,
> please notify us immediately by return e-mail and promptly delete this
> message and its attachments from your computer system. We do not waive
> attorney-client or work product privilege by the transmission of this
> message.
> TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> constitute a "reliance opinion" as defined in IRS Circular 230 and may not
> be used to establish reasonable reliance on the opinion of counsel for the
> purpose of avoiding the penalty imposed by Section 6662A of the Internal
> Revenue Code. The firm provides reliance opinions only in formal opinion
> letters containing the signature of a director.
>
The post was migrated from Yahoo.
The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
>
> Non-resident of California wants to file a chapter 13 to cram down (motion
> to value) an investment property owned in California.
> Anyone see a problem with that?
> Is an opposition to confirmation by the ch 13 trustee that the property is
> not necessary for a reorganization likely?
>
> Thanks,
> --
> Kirk Brennan
> California Law Office, P.C.
>
> CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
> exclusive and confidential use of the intended recipient. If you are not
> the intended recipient, please do not read, distribute or take action in
> reliance on this message. If you have received this message in error,
> please notify us immediately by return e-mail and promptly delete this
> message and its attachments from your computer system. We do not waive
> attorney-client or work product privilege by the transmission of this
> message.
> TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
> constitute a "reliance opinion" as defined in IRS Circular 230 and may not
> be used to establish reasonable reliance on the opinion of counsel for the
> purpose of avoiding the penalty imposed by Section 6662A of the Internal
> Revenue Code. The firm provides reliance opinions only in formal opinion
> letters containing the signature of a director.
>
The post was migrated from Yahoo.
Non-resident of California wants to file a chapter 13 to cram down (motion
to value) an investment property owned in California.
Anyone see a problem with that?
Is an opposition to confirmation by the ch 13 trustee that the property is
not necessary for a reorganization likely?
Thanks,
Kirk Brennan
California Law Office, P.C.
CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the
exclusive and confidential use of the intended recipient. If you are not
the intended recipient, please do not read, distribute or take action in
reliance on this message. If you have received this message in error,
please notify us immediately by return e-mail and promptly delete this
message and its attachments from your computer system. We do not waive
attorney-client or work product privilege by the transmission of this
message.
TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not
constitute a "reliance opinion" as defined in IRS Circular 230 and may not
be used to establish reasonable reliance on the opinion of counsel for the
purpose of avoiding the penalty imposed by Section 6662A of the Internal
Revenue Code. The firm provides reliance opinions only in formal opinion
letters containing the signature of a director.
Non-resident of California wants to file a chapter 13 to cram down (motion to value) an investment property owned in California.Anyone see a problem with that?Is an opposition to confirmation by the ch 13 trustee that the property is not necessary for a reorganization likely?
Thanks,-- Kirk BrennanCalifornia Law Office, P.C.CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the exclusive and confidential use of the intended recipient. If you are not the intended recipient, please do not read, distribute or take action in reliance on this message. If you have received this message in error, please notify us immediately by return e-mail and promptly delete this message and its attachments from your computer system. We do not waive attorney-client or work product privilege by the transmission of this message.
TAX ADVICE NOTICE: Tax advice, if any, contained in this e-mail does not constitute a "reliance opinion" as defined in IRS Circular 230 and may not be used to establish reasonable reliance on the opinion of counsel for the purpose of avoiding the penalty imposed by Section 6662A of the Internal Revenue Code. The firm provides reliance opinions only in formal opinion letters containing the signature of a director.
The post was migrated from Yahoo.