Exempting Residual Income
Posted: Wed Apr 09, 2014 9:48 am
Have you considered a Ch13? If the residuals are debtor's only source of
income, why risk it in a Ch7? You could get an aggressive trustee who
sells the rights to it and debtor is left with nothing except the wildcard
(which in the long run isn't much). I believe the ex-spouse's interest is
exempt from the estate.
Shannon A. Doyle
Attorney at Law
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*From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
Of *Michael Avanesian
*Sent:* Monday, April 07, 2014 9:37 AM
*To:* cdcbaa@yahoogroups.com
*Subject:* Re: [cdcbaa] Exempting Residual Income
Is there a reason why the Trustee can't sell the rights to collect the
residuals?
I think there may be a way to salvage some of it if (the Debtor would know)
there is a way to increase the value of the residuals by the Debtor's
postpetition behavior. Any increase in residual value from the postpetition
actions should belong to the Debtor right?
nonaction may result in a decline in value from the residuals. Like if he
stops directing other films? Or better, if he stops attending special
conventions where his films are watched/sold. If the Debtor is broke AND
benefits no $, why would he show up? Come on trustee, throw him something
so you can protect your end. (Then again, the Trustee may take his chances
depending on the facts.)
Those are negotiating points which may or may not work depending on the
Trustee and the underlying facts.
I wouldn't risk a low ball appraisal because 33k / year for next 3 years is
worth at least 75k!
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
www.tilemlaw.com
818-507-6000
On Mon, Apr 7, 2014 at 9:18 AM, Catherine Christiansen wrote:
the Trustee will look to the value of selling the ability to collect the
residuals in the future. You need to have someone estimate the value and
that is the amount you exempt - if possible. Look for businesses that
purchase judgments, they will be able to help you find the sales value.
Law Office of Catherine Christiansen
17011 Beach Blvd. Ste 900, Huntington Beach, CA 92647
Tel: (714) 375-6651 Fax: (562) 490-8572
attorneychristiansen@gmail.com
On Monday, April 7, 2014 7:36 AM, Stella Havkin
wrote:
Huge chance a trustee will keep case open and collect residuals.
Sent from my Stella Havkin's IPhone
On Apr 7, 2014, at 2:15 AM, wrote:
Two quick questions regarding potential Chapter 7 client:
1. Director potential debtor makes around $32k per year in residuals
from completed films which have "staying power" and residuals are expected
to continue at around $20-$30k per year for several more years even if he
quit working today. I can wildcard exempt most of the expected value of
the post BK first year of residuals. What are the chances an L.A. Trustee
would hang around and keep the case open to collect residuals after the
first year?
2. Ex-wife of potential debtor has a divorce support order against
debtor's residuals to collect around 25% of net pay, and debtor is pre
petition current on support. If the support order is recorded pre petition
could it put the Trustee on constructive notice of ex-wife's interest and
be senior to the Trustee's interest in the residuals?
Thanks in advance for any advice,
Michael Chekian, Esq.
Chekian Law Office
11400 W. Olympic Blvd. #200
Los Angeles, CA 90064
(310) 390-5529
Fax (310) 451-0739
e-mail: mike@cheklaw.com
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