Effect of lien strip on jointly owned property with
Posted: Wed Nov 19, 2014 2:28 pm
I'm not sure, but I still think the non-debtor doesn't get the benefit of 506. In the Maynard case, the entire property came into the estate because of the community property interest.
541 provides that thedebtor'slegal and equitable interests in propertycome into the estate. While joint tenants share equal right to possession of the entire property, I believe that only their share of the equity comes into the estate for the purposes of 506.
506(d) refers tothe claim against the debtor being voided and102(2) provides that"claim againstthe debtor"includes claim againstproperty of the debtor. So the lien against property of the debtor is void at the end of the plan.
Taking this issueclose to the limit, where the debtor holds jointat a creditor's lien would be void for the benefit of the 99 non-debtors, especially in an appreciating real estate market.
Law Office of Peter M. Lively * Personal Financial Law Center I
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On Wednesday, November 19, 2014 1:23 PM, "'Mark J. Markus' bklawr@yahoo.com [cdcbaa]" wrote:
But in a joint tenancy situation each tenant owns an undivided interest in the whole property, so wouldn't the entire property (subject to the lien avoidance) come into the bankruptcy estate?
*************************
Mark J. Markus
Law Office of Mark J. Markus
Mailing Address Only:
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web: http://www.bklaw.com/
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This Firm is a Qualified Federal Debt Relief Agency
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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. On 11/18/2014 4:24 PM, 'Peter M. Lively' petermlively2000@yahoo.com [cdcbaa] wrote:
Goodpoints Pat. I'm changing my guess.
Given that506(d) is expresslylimited to the debtor and 506 is generally understood to be applicable only in the context of a plan offrom the lien avoidance.
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
On Tuesday, November 18, 2014 3:47 PM, "'Patrick Green' pat@fitzgreenlaw.com [cdcbaa]" wrote:
Correction: I assumed the co-ownership was JT, but I now see that the facts do not say that. If you have any questions or concerns, please contact me. Pat Patrick T. Green Attorney at Law Fitzgerald & Green, Attorneys at Law 1010 E. Union St. Suite 206 Pasadena, CA 91106 Tel: (626) 449-8433 Fax: (6ups.com [mailto:cdcbaa@yahoogroups.com]
Sent: Tuesday, November 18, 2014 1:57 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Effect of lien strip on jointly owned property with nondebtor [18 Attachments] [Attachment(s) from Peter M. Lively included below] 506(d)limits the benefit to the debtor.d 524(a)(3) references after acquired 541(a)(2) property. Provided there is no prenuptial agreement excluding the husband's interest in the real property from community property, I think your potential client has a good argument that 506(d) covers the after acquired community property interest. Of course husband doesn't receive a discharge of the debt previously secured to the property by the lien. 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 Tuesday, November 18, 2014 1:39 PM, "Shannon Doyle sdoyle@ebankruptcyassistants.com [cdcbaa]" wrote: Yes I understand that the marriage took place after the lien strip but the property was transmuted to CP during the Chapter 13 so (without having done the research) I would argue that the lien strip applies for these reasons: (1) When a debtor gets married during the chapter 13, the non-filing spouses income becomes property of the estate and is required to be used toward the plan. If the non-filing spouse has to contribute to the plan after marriage, why wouldnt he also get the benefit of the marital lien strip and (2) rge the property was CP.
oogroups.com [mailto:cdcbaa@yahoogroups.com]
Sent: Tuesday, November 18, 2014 12:50 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Effect of lien strip on jointly owned property with nondebtor Thanks. The debtor in this case did not become married until after the lien strip. At the time the case was filed, and at the time of the lien strip, she was on title as joint tenants with a NON-spouse.
I think this is different than Maynard, unfortunately, since in Maynard they were married and the estate had an interest in the entire property. But I'd love to hear others' input.
*************************
Mark J. Markus
Law Office of Mark J. Markus
Mailing Address Only:
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)332-1180 (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
________________________________________________
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. On 11/18/2014 6:52 AM, Shannon Doyle sdoyle@ebankruptcyassistants.com [cdcbaa] wrote:
That is an interesting issue Mark. In In re Maynard, 264 B.R. 209 (9th Circuit. BAP 2001), the Court said that a junior mortgage is stripped he property became community property at the time of marriage (unless there are some facts to refute this) so I would argue that it is stripped and the husband is protected against deficiency. But I would also look at some other facts like did the debtor amend her plan to include the husbandut the CP aspect of these facts. ogroups.com [mailto:cdcbaa@yahoogroups.com]
Sent: Monday, November 17, 2014 10:51 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Effect of lien strip on jointly owned property with nondebtor Esteemed Colleagues:
I'm advising someone on a Chapter 13 case in which a lien strip was done.
The salient facts are:
As of the petition filing date, Debtor is on title to the property with her boyfriend who is also a co-signer on the junior mortgage loan to be stripped.
Petition filed by debtor alone.
During the Chapter 13 case, debtor marries said boyfriend.
Debtor files the complaint for the lien strip (Judge Zurzolo) and it is approved by default.
Questions:
1. Is the lien "fully" stripped or does the fact that there was a nondebtor on title (or on the loan) affect the extent of the strip?
2. Now that they are married, is the husband protected against any deficiency owed to the stripped mortgage by virtue of the community discharge in 524(a)(3) (once it's entered)?
Thanks in advance for your input.
*************************
Mark J. Markus
Law Office of Mark J. Markus
Mailing Address Only:
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)332-1180 (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
________________________________________________
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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