Am I reading Abdelgadir right?
Posted: Fri Mar 14, 2014 4:05 pm
I agree that the following language distinguishing Scarborough is not clear.
The court is rejecting a reading of the statute that has "only" modifying "debtor's principal residence" such as "A claim secured by a security interest in real property that is only the debtor's principal residence can't be modified."
and instead has "only" modify the type of claim, such as "A claim secured only by a security interest in real property that is the debtor's principal residence [as opposed to one secured by debtor's principal residence and additional collateral] can't be modified."
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The bankruptcy court concluded that confirmation was the determinative date based on the phrase in the statute that reads real property that is the debtors principal residence, which uses the present tense and signaled to the bankruptcy court that the subject of the sentence, residence must presently exist. The Third Circuit, however, read such language differently, finding that:
903 *903 y using the word `is in the phrase `real property that is the debtors principal residence, Congress equated the terms `real property and `principal residence. Put differently, this use of `is means that the real property that secures the mortgage must be only the debtors principal residence in order for the anti-modification provision to apply.
Scarborough v. Chase Manhattan Mortg. Corp. (In re Scarborough), 461 F.3d 406, 411 (3d Cir.2006) (concluding that a claim secured by real property that is, in part, not the debtors principal residence under the terms of the mortgage, may be modified.)
A narrow focus on sub-phrases, which modify antecedents within the clause, is misplaced. Based on the grammatical structure of the statute, the words ebtors principal residence modifies claimre Cohen, 267 B.R. at 43 ; In re Wetherbee, 164 B.R. 212, 215 (Bankr. D.N.H.1994) ; see also, Nobelman v. Am. Sav. Bank, 508 U.S. at 331, 113 S.Ct. 2106 (it is reasonable to read `a claim secured only by a [homestead lien] as referring to the lienholders entire claim
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
On Friday, March 14, 2014 2:00 PM, Holly Roark wrote:
Thanks. I am not (at this time) asking about additional collateral for the loan. I am asking about if I own a property, my primary residence, secured by a loan I took out when I purchased it, but then I rent out a room, or conduct my corporation from there, is there any authority for the proposition that since it's not ONLY my primary residence but is multipurpose, can I modify the loan? It appears the third circuit is saying that inSCARBOROUGH, andAbdelgadirquoted that language but then went into a discussion about narrow interpretation that I don't quite follow. I'm just looking for something to hang my hat on that says because the primary residence is also his business property on the date of filing, then he can modify the loan.
SCARBOROUGH,461 F.3d 406
United States
Court of Appeals, Third Circuit.
Argued July 27,
2006.
Filed August 28,
2006.
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com**primary email address**
http://www.roarklawoffices.com/
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal
Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails directed to my gmail account.**
On Fri, Mar 14, 2014 at 1:30 PM, Peter M. Lively wrote:
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>That court was focusing on whetherthecollateral securing the claim was"the debtor's principal residence" or not. It was the debtor's residence on the petition date, then they moved out and argued it was a rental property for purposes of 1123(b)(5). The court held that the time to determine whether or not the property is a residence for 1123(b)(5) purposes is the petition date not the date of plan confirmation. The court didn't need to address the issue of additional collateral securing the claim.
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>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
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>On Friday, March 14, 2014 12:22 PM, Holly Roark wrote:
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>Am I reading Abdelgadir right? Abdelgadir from the 9th Circuit does NOT agree with the third circuit inSCARBOROUGH, which holds that for antimodification purposes under 1123(b)(5) that if the debtor's principal residence is also a business location or rental, then the loan against the property can be modified because the property "is" not ONLY the debtor's residence?
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>Abdelgadir does not allow us to modify loans in the 9th circuit under 1123(b)(5) if it's a principal residence plus rental or business location, correct?
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>Holly Roark
>Certified Bankruptcy Specialist*
>holly@roarklawoffices.com**primary email address**
>http://www.roarklawoffices.com/
>Central District of California
>Consumer Bankruptcy Attorney
>1875 Century Park East, Suite 600
>Los Angeles, CA 90067
>T (310) 553-2600
>F (310) 553-2601
>*By State Bar of California Board of Legal
Specialization
>
>**For a quicker response, email me at holly@roarklawoffices.com.
>I only use gmail for my listservs, and am likely to miss private emails
>directed to my gmail account.**
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>
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