Thanks for the replies. The debtor's house is definitely in jeopardy since there are assets to pay that SBA lien. I didn't even think about preserving the lien for the benefit of the estate, i.e., she wouldn't even get her homestead exemption. Thanks to Larry for reminding me of that. Sure doesn't seem right. We may have to think about a chapter 11 liquidation plan or non-bankruptcy solutions. Jon
>
> The way I see it is that your Debtor has 800k in equity and 500k in secured
> debt. 800k - 500k 300k left over for the unsecured class less costs and
> exemptions.
>
> I don't see why cross collateralization would protect the Debtor in some
> way (JHayes rule #1, bk does nothing). I also don't understand why in a
> situation like the one above, you wouldn't do a Chapter 11, even if it is
> just to liquidate assets -- as a worst case scenario. I rather have my
> client get 10% seller's fee than for some trustee to sell him house AND
> collect 10%? no way!
>
> Plus, in an 11, you might be able to save the home if this person makes
> enough $$.
>
> Sincerely,
> Michael Avanesian
>
>
> On Mon, May 20, 2013 at 4:03 PM, Larry Simons wrote:
>
> > **
> >
> >
> > Actually if the IRS has a lien, the Trustee will sell and step into the
> > IRS's position coming before the homestead. *See, In re Bolden, 327 BR
> > 657*
> >
> > ** **
> >
> > *From:*
cdcbaa@yahoogroups.com [mailto:
cdcbaa@yahoogroups.com] *On Behalf
> > Of *Nicholas Gebelt
> > *Sent:* Monday, May 20, 2013 3:49 PM
> > *To:*
cdcbaa@yahoogroups.com
> > *Cc:* Nicholas Gebelt
> > *Subject:* RE: [cdcbaa] New Issue****
> >
> > ** **
> >
> > ****
> >
> > Dear John,****
> >
> > ****
> >
> > I have not come across your scenario either, but I offer the following
> > observation.****
> >
> > ****
> >
> > Suppose the house is worth $500,000, with a first mortgage of $200,000, a
> > second mortgage of $50,000, and an IRS tax lien of $250,000. At first
> > blush it looks like the trustee is out of luck. However, if the trustee
> > gets the forces of Darth Vader oops, I mean the IRS to release the
> > lien, there is suddenly $250,000 worth of equity, and some of it is
> > nonexemptible. How can the trustee get the Dark Lord to release the lien?
> > By promising a much faster payout after the sale than having to wait for
> > the debtor to make payments. And depending on the facts, the remaining
> > unpaid taxes may survive the discharge. ****
> >
> > ****
> >
> > If the trustee sells the corporation's assets to pay off the SBA loan, it
> > is analogous to getting the IRS to release the lien with the promise of a
> > faster payout than waiting for the debtor pay the debt off. The house will
> > still be part of the estate until the case is closed, so the trustee will
> > certainly go after it once the SBA loan is paid off and the SBA lien is
> > released.****
> >
> > ****
> >
> > In sum, if the trustee sells the corporate assets and pays off the SBA
> > loan, the house is in jeopardy.****
> >
> > ****
> >
> > Let us know how things go.****
> >
> > ****
> >
> > Nick****
> >
> > ****
> >
> > ****
> >
> > Nicholas Gebelt, Ph.D., J.D.****
> >
> > Board Certified Bankruptcy Specialist****
> >
> > ****
> >
> > [image: Description: cid:image003.jpg@...]****
> >
> > ****
> >
> > Law Offices of Nicholas Gebelt****
> >
> > 15150 Hornell Street****
> >
> > Whittier, CA 90604****
> >
> > Phone: 562.777.9159****
> >
> > FAX: 562.946.1365****
> >
> > Email: ngebelt@...; ngebelt@...****
> >
> > Web:
www.goodbye2debt.com****
> >
> > Blog:
www.southerncaliforniabankruptcylawblog.com/****
> >
> > ****
> >
> > *We are a debt relief agency. We help people file for bankruptcy relief
> > under the Bankruptcy Code.*****
> >
> > ****
> >
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> >
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> > imposed by the Internal Revenue Service, we inform you that any U.S. tax
> > advice contained in this communication (including any attachments) is not
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> > ***
> >
> > ****
> >
> > *From:*
cdcbaa@yahoogroups.com [mailto:
cdcbaa@yahoogroups.com] *On Behalf
> > Of *jonhayes6666
> > *Sent:* Monday, May 20, 2013 3:09 PM
> > *To:*
cdcbaa@yahoogroups.com
> > *Subject:* [cdcbaa] New Issue****
> >
> > ****
> >
> > ****
> >
> > Something I have not come across before.
> >
> > PC has a home worth $500k. First is $200, Second is SBA loan of $300. So
> > far so good.
> >
> > SBA also has a lien on corporate inventory, a/r, fixtures etc. Those
> > assets are worth $300k, SBA lien (same debt as on the home) is $300.
> >
> > Question: If the PC files ch 7, and the trustee - postpetition - sells the
> > corp assets (forget the procedural issues related to that), and pays the
> > SBA, can he now sell the home because the equity is more than the exemption?
> > ****
> >
> > ****
> >
> >
> >
>
The post was migrated from Yahoo.
