Interesting 9th Cir BAP case regarding challenging se=
Posted: Wed Nov 26, 2014 4:50 pm
Just in time for the Messiah sing-along! http://www.laphil.com/tickets/los-angel ... 2013-12-11
On Wednesday, November 26, 2014 4:41 PM, "'Patrick Green' pat@fitzgreenlaw.com [cdcbaa]" wrote:
It seems to me that to the extent the now unsecured amount exceeds the homestead exemption and there are no priority debts eating it up, the liquidation test amount goes up and the unsecureds are singing the hallelujah chorus all the way to the bank.
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: (626) 449-0565
pat@fitzgreenlaw.com
From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com]
Sent: Wednesday, November 26, 2014 2:20 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Interesting 9th Cir BAP case regarding challenging secured status of a mortgage lender
I don't know what proposition this case stands for but there can be some advantages to avoiding the lien of an otherwise oversecured creditor.
One that came to my mind was someone with a lot of tax debt. Sell the house and pay all the tax debt and attorney fees.
Another advantage could be negotiation leverage. A secured creditor faced with the prospect of being paid 50 cents on the dollar when it was otherwise over secured could be open to a nice settlement in your client's favor. I don't know if there is an implied duty to pursue this for the benefit of all creditors, just thinking.
You could also pay the claim off interest free -- particularly potent in chapter 11. Other tricks in chapter 11 too.
I don't understand the case though. If the lien is avoided, what happens if the case is dismissed. Can there be a subsequent nonjudicial foreclosure action, or is the lien gone as a matter of law (and therefore, the power to sell also gone).
Sincerely,
Michael Avanesian
On Wed, Nov 26, 2014 at 9:42 AM, Shannon Doyle sdoyle@ebankruptcyassistants.com [cdcbaa] wrote:
>The Court finds that debtors have a cognizable legal theory to challenge the secured status of a mortgage lenders proof of claim in chapter 13 based on improper chain of title. I am wondering though the practical effects of denying a lender secured status. Wouldnt the debtor addresses the validity of the lien so I assume the lender would still have an unsecured claim. In theory, it would be great if debtors could cramdown their primary residence but most debtors cant afford to do it. A client of mine wants to pursue this argument against a lender but I am not sure it would really benefit the debtor. Any thoughts would be appreciated.
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>Happy Thanksgiving!
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