Central District Consumer Bankruptcy Attorney's Association

1. No, the writ of possession does not divest client of property interest.
See In re Tiffany Butler. and Arrieta.
2. However, relief from stay should be summarily granted by any bankruptcy
judge because client willingly and knowledgeably entered into short sale.
3. Short sale is one of the stupidest concepts of all time - an invention
of out-of-work realtors that serves no purpose except to delay the sale of
a property. But unless your client was incompetent when they agreed to it,
i see no opportunity for litigation for title whatsoever. Client could sue
realtor for breach of contract. Maybe.
4. Debtor would have no right to avoid the short sale under 522(h) because
522(g) only gives that right to the debtor under an involuntary transfer. i
don't even think you could hope for help from In re Cohen.
5. Because it was a voluntary sale, no exemption would be impaired anyway.
See Owen v Owen.
6. i can't see how the analysis changes under a C11 assuming that the short
sale was for FMV.
the plan as proposed would be a 9011 violation.
On Fri, Sep 28, 2012 at 11:36 PM, Giovanni Orantes wrote:
> **
>
>
> Doesn't the writ of possession divest your client of any property interest
> other than possession, as to which a Court would likely grant relief from
> stay? Shouldn't the BK have been filed before the writ was issued?
>
>
> On Fri, Sep 28, 2012 at 11:10 PM, Alik Segal wrote:
>
>> **
>>
>>
>> Debtor needs to file bk asap to stop a writ of possession after sale. He
>> sold his house in a short sale and now refuses to move. He states that he
>> asked the real estate broker and was promised a short sale with a lease
>> back and an option to buy back, but he received instead a straight forward
>> short sale. Now the buyer has received a writ of possession that is stayed
>> until Monday 10/1/12. Debtor had filed a title action and a TRO
>> application in September to stay the writ. The TRO application was denied
>> today 9/28/12. So I need to file before Monday.
>>
>> The overall plan is that the BK will stop the eviction and enable the
>> debtor to litigate title while retaining possession. If and when debtor
>> obtains title, his old loan will be resurrected and could be dealt with in
>> bankruptcy.
>>
>> Debtor needs to decide now whether he will move out before filing. If he
>> moves out and takes another personal residence, he will be able to modify
>> the resurrected loan and receive a new loan with the principal equal to the
>> fair market value. If debtor remains in the house, then he will not be
>> able to modify the resurrected mortgage and will have to cure and pay the
>> arrears on top of the regular payments.
>>
>> Chapter 11 is needed to modify the mortgage, but it is a severe
>> administrative burden for this elderly self-employed debtor. And until he
>> obtains title he does not need to modify the mortgage. I am thinking about
>> filing it as a 13 and converting to 11 if and when debtor regains his title
>> and resurrects the mortgage.
>>
>> I am not sure but I think that the eviction may raise distinct issues
>> related to "personal residence" status. Giving up possession may be
>> significant in the eviction context. Debtor could retain possession by
>> using the house for storage until a renter can be found. Would it make his
>> case weaker if he uses the house to store personal belongings, as opposed
>> to business property? In the meantime he will take up personal residence
>> elsewhere.
>>
>> Any suggestions, creative solutions, reality checks?
>>
>>
>> --
>> Alik Segal
>> Alik.Segal@gmail.com
>> 310-362-6157
>> California Central District
>>
>>
>
>
> --
> Giovanni Orantes, Esq.
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 1980
> Los Angeles, CA 90010
> Tel: (213) 389-4362
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1. No, the writ of possession does not divest client of property interest. See In re Tiffany Butler. and Arrieta.2. However, relief from stay should be summarily granted by any bankruptcy judge because client willingly and knowledgeably entered into short sale.
3. Short sale is one of the stupidest concepts of all time - an invention of out-of-work realtors that serves no purpose except to delay the sale of a property. But unless your client was incompetent when they agreed to it, i see no opportunity for litigation for title whatsoever. Client could sue realtor for breach of contract. Maybe.
4. Debtor would have no right to avoid the short sale under 522(h) because 522(g) only gives that right to the debtor under an involuntary transfer. i don't even think you could hope for help from In re Cohen.
5. Because it was a voluntary sale, no exemption would be impaired anyway. See Owen v Owen.6. i can't see how the analysis changes under a C11 assuming that the short sale was for FMV.
the plan as proposed would be a 9011 violation.
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