I did a State Bar convention program on this topic last October. Will be happy to throw in my $0.02.
Sent from my iPhone
Law Office of Eric Alan Mitnick
(310) 792-5864
MitnickLaw@aol.com
Communications and attachments may be confidential and attorney-client privileged. Please beware, there are probably typos.
On Aug 29, 2014, at 7:25 PM, "cdcbaa
cdcbaamailbox@gmail.com [cdcbaa]" wrote:
> Wes, Larry, and I will discuss this issue, and even selling fully encumbered assets when the lienholders agree to a surcharge, at the cle. We will discuss when there is a requirement that unsecured creditors get a significant distribution.
>
> Persons who represent consumers should attend.
>
> d
>
> Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
>
>
> On Aug 27, 2014, at 10:39 PM, "Michael Avanesian
michael@avanesianlaw.com [cdcbaa]" wrote:
>
>>
>> Wes also takes the position that a trustee can administer fully encumbered property if there is equity tied up by a tax lien. I'm sure he will correct me but I believe this is how it would work:
>>
>> Home worth 500k "encumbered" as: 250k mortgage 100k exemption 150k+ tax lien.
>>
>> Most people would think, "no equity for unsecured creditors, trustee must abandon." Wes would take the position that under 724(b), he can sell the property and distribute first, to the secured lender, then to himself, then to his attorney THEN to the tax collector.
>>
>> Only reason I mentioned him by name is he taught this to us at the last specialist CLE. I was totally shocked by it (I hope I am right in that this is what he meant). I think the CLE is well worth it since Dennis and Wes share so much.
>>
>> It's even worse than I mentioned above though. I am a math professor so I like examples
>>
>> Home worth 625k (after cost of sale etc), first 300k, tax lien 200k, junior lien 100k. Trustee + attorney fees 150k. This is how distribution would work:
>>
>> Bank 300k
>> Trustee 150k
>> Tax lien 50k
>> Junior lien 100k
>> Tax lien 25k
>>
>> Only paid the taxing agency 75k despite all that equity!
>>
>> Sincerely,
>> Michael Avanesian
>>
>> On Wed, Aug 27, 2014 at 9:23 PM, cdcbaa
cdcbaamailbox@gmail.com [cdcbaa] wrote:
>>
>> The trustee can make a deal with the tax autthoritiies. The trustee sells for the taxing agencies and for the unsecured creditors. Your client has let the finances get too far out of wack to save the home..
>> d
>>
>> Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
>>
>>
>> On Jul 31, 2014, at 8:43 AM, "Michael Manning
mike@manninglawoffice.com [cdcbaa]" wrote:
>>
>>>
>>> Hello listmates
>>>
>>>
>>>
>>> I had a prospective client come to me who is currently in a Ch 7 that he filed pro per. He filed to stop a foreclosure and now the trustee is looking to sell his home. There are significant tax liens on the property but the trustee is negotiating with the IRS to reduce the liens in order to free up some equity for the unsecured creditors (of which he only has one who is owed $35k).
>>>
>>>
>>>
>>> I initially though he could convert to a Ch 13, however, it doesn't appear that the conversion would be in good faith given that he cannot fund a plan that would pay back the arrears and pay back the IRS tax debt. Additionally, the debtor had filed a previous CH 13 which was dismissed and he was barred from filing another Ch 13 until late this August.
>>>
>>>
>>>
>>> I'm really not sure what options the debtor has available at this point.
>>>
>>>
>>>
>>> Curious if any of you had any suggestions.
>>>
>>>
>>>
>>> Thanks
>>>
>>> Mike
>>>
>>>
>>>
>>>
>>>
>>>
>>> Mike Manning
>>>
>>>
>>>
>>> 4667 MacArthur Blvd., Suite 150 | Newport Beach, California 92660
>>>
>>> o 949.200-8757 ext 1009 | f 866.843.8308
>>>
>>>
>>>
>>>
mike@manninglawoffice.com
>>>
>>> manninglawoffice.A
>>>
>>
>>
>
>
I did a State Bar convention program on this topic last October. Will be happy to throw in my $0.02. Sent from my iPhoneLaw Office of Eric Alan Mitnick (310) 792-5864
MitnickLaw@aol.comCommunications and attachments may be confidential and attorney-client privileged. Please beware, there are probably typos. On Aug 29, 2014, at 7:25 PM, "cdcbaa
cdcbaamailbox@gmail.com [cdcbaa]" <
cdcbaa@yahoogroups.com> wrote:
Wes, Larry, and I will discuss this issue, and even selling fully encumbered assets when the lienholders agree to a surcharge, at the cle. We will discuss when there is a requirement that unsecured creditors get a significant distribution.Persons who represent consumers should attend.dDennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voiceOn Aug 27, 2014, at 10:39 PM, "Michael Avanesian
michael@avanesianlaw.com [cdcbaa]" <
cdcbaa@yahoogroups.com> wrote:
Wes also takes the position that a trustee can administer fully encumbered property if there is equity tied up by a tax lien. I'm sure he will correct me but I believe this is how it would work:
Home worth 500k "encumbered" as: 250k mortgage 100k exemption 150k+ tax lien. Most people would think, "no equity for unsecured creditors, trustee must abandon." Wes would take the position that under 724(b), he can sell the property and distribute first, to the secured lender, then to himself, then to his attorney THEN to the tax collector.
Only reason I mentioned him by name is he taught this to us at the last specialist CLE. I was totally shocked by it (I hope I am right in that this is what he meant). I think the CLE is well worth it since Dennis and Wes share so much.
It's even worse than I mentioned above though. I am a math professor so I like examples :)Home worth 625k (after cost of sale etc), first 300k, tax lien 200k, junior lien 100k. Trustee + attorney fees 150k. This is how distribution would work:
Bank 300kTrustee 150kTax lien 50kJunior lien 100kTax lien 25kOnly paid the taxing agency 75k despite all that equity!
Sincerely, Michael AvanesianOn Wed, Aug 27, 2014 at 9:23 PM, cdcbaa
cdcbaamailbox@gmail.com [cdcbaa] <
cdcbaa@yahoogroups.com> wrote:
The trustee can make a deal with the tax autthoritiies. The trustee sells for the taxing agencies and for the unsecured creditors. Your client has let the finances get too far out of wack to save the home..
dDennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
On Jul 31, 2014, at 8:43 AM, "Michael Manning
mike@manninglawoffice.com [cdcbaa]" <
cdcbaa@yahoogroups.com> wrote:
Hello listmates
I had a prospective client come to me who is currently in a Ch 7 that he filed pro per. He filed to stop a foreclosure and now the trustee is looking to sell his home. There are significant tax liens on the property but the trustee is
negotiating with the IRS to reduce the liens in order to free up some equity for the unsecured creditors (of which he only has one who is owed $35k).
I initially though he could convert to a Ch 13, however, it doesn't appear that the conversion would be in good faith given that he cannot fund a plan that would pay back the arrears and pay back the IRS tax debt. Additionally, the debtor
had filed a previous CH 13 which was dismissed and he was barred from filing another Ch 13 until late this August.
I'm really not sure what options the debtor has available at this point.
Curious if any of you had any suggestions.
Thanks
Mike
Mike Manning
4667 MacArthur Blvd., Suite 150 | Newport Beach, California 92660
o 949.200-8757 ext 1009 | f 866.843.8308
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