Chapter 20 question
Posted: Tue May 14, 2013 6:13 pm
Yes, but like Peter, our chapter 20 lien strip was unopposed and granted by default.
We have never had a contested Lien avoidance adversary where opposing counsel raised the chapter 20 issue.
If nobody opposes the relief requested (lien avoided upon completion of plan) VZ will grant the motion for default judgment.
-Dave
Sent from my iPhone
On May 14, 2013, at 2:41 PM, "Peter M. Lively" wrote:
> Yes, but it was accomplished by stipulation with the second lien holder.
>
> Peter M. Lively, J.D., M.B.A.
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
> Telephone: (310) 391-2400 * Toll Free: (800) 307-3328 * Fax: (310) 391-2462
>
> To: cdcbaa@yahoogroups.com
> Sent: Tuesday, May 14, 2013 2:31 PM
> Subject: [cdcbaa] Re: Chapter 20 question
>
> Hello, seems no one replied about Judge Z and chapter 20. Has no one on the list done a chapter 20 before Judge Z?
>
> d
>
> --- In mailto:cdcbaa%40yahoogroups.com, "Larry Webb" wrote:
> >
> > Mark,
> >
> >
> >
> > I have reviewed a lot of ch20 cases. In several the ECF assigned judge was
> > replaced with the prior ch7 judge once the humans got involved.
> >
> >
> >
> >
> >
> >
> >
> > Best regards
> >
> >
> >
> >
> >
> > Larry Webb
> >
> > State Bar of California 229344
> >
> > Central District California
> >
> > "A Debt Relief Agency"
> >
> > Check out my Blog
> >
> >
> >
> >
> >
> > Larry@webbklaw. com
> >
> > Law Offices of Larry Webb
> >
> > 484 Mobil Ste 43
> >
> > Camarillo Ca 93010
> >
> >
> >
> > P 805.987.1400
> >
> > F 805.987.2866
> >
> > C 805.750.2150
> >
> >
> >
> >
> >
> >
> >
ps.com] On Behalf Of
> > Mark J. Markus
> > Sent: Tuesday, April 23, 2013 2:53 PM
> > To: mailto:cdcbaa%40yahoogroups.com
> > Subject: Re: [cdcbaa] Chapter 20 question
> >
> >
> >
> >
> >
> > Nick,
> >
> > I have not had any such experience with Judge Zurzolo, but a few quick
> > comments pop to mind:
> >
> > 1. I used to believe as you did that cases get assigned to the same judge
> > when possible, but I now think that with the advent of ECF the Judge gets
> > signed automatically and randomly, so I do not believe having the prior case
> > with one judge makes it any more likely you will get him/her.
> >
> > 2. I think the good faith issue pointed out by Jeff Smith is going to be
> > more of the issue than lack of in personam liability. If you open it up so
> > that payments should be made on the stripped off portion of a formerly
> > secured debt, you'd have to do the same for all unsecured debts from the
> > prior case, and that doesn't make any sense when you review the definition
> > of "claim" in section 101 which talks in terms of a "right to payment".
> > Without in personam rights and in rem rights (post strip), there are no
> > rights to be paid and thus, they have no claim in the estate.
> >
> >
> > *************************
> > 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
> > http://www.bklaw.com/bankruptcy-blog/20 ... definition
> > /)
> > ________________________________________________
> > 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
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> > 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.
> >
> > On 4/23/2013 12:18 PM, Nicholas Gebelt wrote:
> >
> > Dear Mark,
> >
> >
> >
> > I have read with interest your Chapter 20 thread. I have clients > > married couple for whom I did a Chapter 13. They received their discharge
> > in April 2011. As a result, any in personam liability on their two
> > mortgages was discharged.
> >
> >
> >
> > When I filed their bankruptcy papers their home value made a Lam motion
> > impossible. However, the years have not been kind to the condo market > > just had the property appraised and there is a lot of wiggle room for a lien
> > strip so they are in a great position to strip off the second. They have
> > an arrearage on the first, so there is a good reason to file the new Chapter
> > 13 other than doing the lien strip. I am planning to strip off the second
> > and then file an objection to any proof of claim the holder of the second
> > files based on the fact that the in personam liability was extinguished in
> > the prior bankruptcy.
> >
> >
> >
> > Given that the previous case was a Chapter 13, I don't have your
> > 1328(f)(1) problem, and 1328(f)(2) is obviously not a problem either.
> > However, since Judge Zurzolo was the judge in the previous Chapter 13, my
> > experiences lead me suspect that he will be the judge in the one I will be
> > filing sometime in the next couple of weeks. I know that his wont is to
> > require an adversary proceeding for a 506 lien strip action. My concern
> > is that he may still require that my clients pay something to the stripped
> > off second, in spite of the fact that there is no in personam liability.
> >
> >
> >
> > Have you, Mark, or any of you in Listserve land, had this situation before
> > Judge Zurzolo? If so, what is his predilection?
> >
> >
> >
> > All the best,
> >
> >
> >
> > Nick
> >
> >
> >
> > Nicholas Gebelt, Ph.D., J.D.
> >
> > Board Certified Bankruptcy Specialist
> >
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> >
ps.com] On Behalf Of
> > Mark J. Markus
> > Sent: Tuesday, April 23, 2013 11:14 AM
> > To: mailto:cdcbaa%40yahoogroups.com
> > Subject: Re: [cdcbaa] Chapter 20 question
> >
> >
> >
> >
> >
> > That makes the most sense, but oddly there is a split of opinion in the
> > courts on this issue, akin to a forced 1111(b) election (from Chapter 11).
> >
> > Thanks all!
> >
> >
> > *************************
> > 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
> > http://www.bklaw.com/bankruptcy-blog/20 ... definition
> > /)
> > ________________________________________________
> > 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.
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> > and cannot be used, for the purpose of (i) avoiding penalties under the
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> > another party any transaction or matter addressed in this communication.
> >
> > On 4/23/2013 11:03 AM, jesseelaw@... wrote:
> >
> > Would you list creditors in a new Chapter 13 case that were discharged in a
> > Chapter 7 case filed 4 years ago? (No.) Why do you need to list them from
> > a Chapter 7 case filed a year ago?
> >
> > If secured creditors have a lien on real property, then absolutely you must
> > list them for their in rem interest, but not for the in personam interest
> > since the debt was discharged in the prior Chapter 7. Those creditors are
> > in essence a nonrecourse secured creditor. The stripping of the lien does
> > not magically recreate personal liability to the debtor. Once the lien is
> > stripped, that creditor has no right to be paid on the previously discharged
> > note.
> >
> >
> >
> > Mark T. Jessee
> > Law Offices of Mark T. Jessee
> > "A Debt Relief Agency"
> > 50 W. Hillcrest Drive, Suite 200
> > Thousand Oaks, CA 91360
> > (805) 497-5868 (805) 497-5864 (Facsimile)
> >
> >
> >
> > In a message dated 4/23/2013 10:27:50 A.M. Pacific Daylight Time,
> > bklawr@... writes:
> >
> >
> >
> > Correct on #2; that was late night muddling on my part.
> >
> > I basically agree with the rest of your analysis, but am getting hearsay
> > contrary views off list from others. In this case it makes the difference
> > between proposing a 2% plan and a 100% plan. I'm not sure it really matters
> > (except to the one new creditor that wasn't discharged in the prior Ch. 7),
> > but obviously looks better to the Trustee at 100% . Debtor's income isn't
> > going to increase (she's permanently disabled) so that issue isn't there
> > either. I'm leaning towards not listing any of the discharged in personam
> > liability as unsecured, but I'm still looking for cases that discuss this
> > but haven't found any as of yet.
> >
> >
> > It sounds though like you're advocating listing ALL the claims from the
> > prior Chapter 7, and just objecting to them if they file claims in the 13.
> > That actually might be the most correct way to go, but it's going to unleash
> > an awful lot of confusion and consequent objections.
> >
> > Mark
> >
> > On 4/23/2013 12:50 AM, Michael Avanesian wrote:
> >
> > I've never done a Chapter 13 Plan let alone a 20 but I think answering the
> > following questions will help you figure out your situation:
> >
> > 1. You said, "normally one would include the unsecured portion of the
> > to-be-stripped lien". If you avoid a lien, isn't the whole thing unsecured?
> >
> > 2. You said, "the unsecured portion of any senior liens". If you only avoid
> > the 4th lien, how are there unsecured portions of senior liens? Is that 506
> > bifurcations on non-primary residence property?
> >
> > 3. You said, "in this case, since it was discharged, I presume these do NOT
> > get included as unescured claims correct?"
> >
> > I would think that if a lien is avoided (no in rem claim) and if there
> > is no personal claim because of the Chapter 7, then that claim can be
> > objected to 100%.
> >
> > However, if you're bifurcating under 506(b), the undersecured "half" of
> > the claim is just transformed into an unsecured claim. There is nothing that
> > strips its in rem claim.
> >
> >
> >
> > I don't know if this was your question but I'll rephrase my answer. When
> > someone buys a piece of property they sign a contract and a deed is
> > recorded. The contract you can think of as privity of contract and is the
> > note. The deed of trust that refers to the note you can think of as privity
> > of estate. Privity of contract gives personal liability for the loan and
> > privity of estate gives the property itself liability for the loan.
> >
> >
> >
> > Now your client files for protection under chapter 7. The personal liability
> > is discharged, there is no more privity of contract (no in personam claim
> > against Debtor). However, there is privity of estate because of the deed of
> > trust (in rem liability).
> >
> >
> >
> > Now Debtor files for Chapter 13 and avoids the lien. If there is no lien
> > (hence no in rem liability) and no in personam liability then what claim
> > does the creditor have against the estate? I'd say none ]
> >
> >
> >
> > I didn't do case law research on this so I don't know how the 9th has ruled
> > on this but this is how it should work.
> >
> >
> >
> >
> >
> > Sincerely,
> >
> > Michael Avanesian
> >
> > Attorney and Counselor at Law
> >
> > 818-817-1725
> >
> >
> >
> > On Mon, Apr 22, 2013 at 11:10 PM, Mark J. Markus wrote:
> >
> >
> >
> > I'm doing my first Chapter 20 case (13 after a 7) and want to be clear on a
> > couple of things.
> >
> > Debor has 4 mortgages against her real estate, which were all in existence
> > when she filed her Chapter 7 case a year ago. Thus, they were all
> > discharged, and their liens remain. We're doing a 13 now to attempt to lien
> > strip the 4th mortgage (and praying we get a judge that allows it).
> >
> > Anyway, when structuring the plan, normally one would include the unsecured
> > portion of the to-be-stripped lien and the unsecured portion of any senior
> > liens, in the Class 5 general unsecured class. But in this case, since it
> > was discharged, I presume these do NOT get included as unescured claims
> > correct? And if so, this becomes a de facto 100% plan after all other
> > payments are made (we're also doing a vehicle cramdown and attorneys' fees
> > in the plan).
> >
> > Does that sound right?
> >
> >
> > *************************
> > 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
> > http://www.bklaw.com/bankruptcy-blog/20 ... definition
> > /)
> > ________________________________________________
> > 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.
> >
>
>
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