Central District Consumer Bankruptcy Attorney's Association

Hint. Look at the Supreme Court case back in 1991. Johnson -v- Home
Estate Bank.

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Although I'm still trying to grasp all of this, I believe that Chase,
technically, has a 1.1 million dollar LIEN on the property. I'm still
unclear how banks modify discharged debts after a Chapter 7. With regard to
arrears after a Chapter 7, how is that calculated? Were any of the arrears
discharged in the Chapter 7 bk? That is, are late fees, charges, interest,
interest on late fees, etc., all secured debt or is there a mixture of
secured and unsecured and some portion of the debt is discharged in a
Chapter 7? One final question. J How does a Chapter 13 work after a
discharge? As no payments are owing under the note, I would think that any
payment schedule in the note is irrelevant. The note is just used to
calculate the amount of the lien. Does the interest rate in the note carry
over? Are balloon payments in the note still applicable? If paid outside
the plan, can the lien/loan "reset" after a Chapter 7? Okay, I guess that
that was more than one. Any insight would be greatly appreciated. Thanks.
Cameron

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yes

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Potential new client filed chapter 7 and got discharge in 2009. Still owns home with about 1.1 Mil loan to Chase outstanding (this is his only secured obligation). Chase won't do loan mod and he owes 100K in mortgage arrearages. He is therefore slightly over the 1,081,000 eligibility requirement for Ch.13. Can I have him pay down the Chase mortgage to below eligibility requirements so he can put the remaining arrearages into his Ch. 13 Plan. He is high income earner, so can make the Plan payments. Any issues or suggestions? Chase just won't play ball, and I see no other way to keep him from foreclosure except a Ch. 13. Thanks.

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Interesting theoretical discussion:
What is the distinction? Both rely on Sect. 506(a), the result in the event
of a forced sale (outside of bankruptcy) is that the value of the collateral
only goes as far as it goes, both have the right to use judicial foreclosure
and (in most cases because everyone has refinanced at one time or another)
get a deficiency, etc. etc. The only distinction is the body of law
established by the Supreme Court in Nobelman, Dewsnup and their progeny
which appears to this observer to be results oriented, rather than legally
sound.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
mitnicklaw@aol.com
Sent: Friday, March 20, 2009 6:29 AM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Chapter 13 Eligibility
I believe that there is a meaningful distinction between the wholly
unsecured (second) loan and the undersecured (first loan), which is paid, as
a fully allowed secured claim (which cannot be modified) during the Chapter
13.
Eric
_____
A Good Credit Score is 700 or Above. See

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I believe that there is a meaningful distinction between the wholly
unsecured (second) loan and the undersecured (first loan), which is paid, as a fully
allowed secured claim (which cannot be modified) during the Chapter 13.

Eric


**************A Good Credit Score is 700 or Above. See yours in just 2 easy
steps!

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Ok, so where are we in this analysis? Apply state law to determination of when a security interest must be avoided? Section 506 applicable to determine extent of security interest? Zimmer and Nobleman applicable under 1322(b) with regards to principal residence determines whether claim may be deemed partially or wholly undersecured.
>
> I was getting exciting about carving out homes on eligibility but the holding in Zimmer (Lam) that the unsecured lien can be modified is based on 506(a). The cases all say that 109(e) is read with 506(a).
>

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I have briefed this issue and can only say that it is very difficult to argue when you have Slack stating that later litigation is irrelevant. Slack held that as long as the unsecured portion is easily ascertainable at the time of filing, later litigation is irrelevant. In addition, as Jon stated, though not binding, there is an overwhelming amount of cases in other division that rule this way on actual mortgages (as opposed to judgment liens). I tried to distinguish all those cases by stating that none of those cases considered state law at all.
The danger with Scovis and the related cases is that the deficiency is not limited to the second mortgage or judgment lien, it is determined from the value of the property against all the liens. Therefore, for 109(e) purposes some cases have determined that you must include the unsecured portion of the first mortgage which is contrary to Nobleman and you also have to include the unsecured portion of a 910 vehicle.
Furthermore, some of our brethren do not want us to succeed on this issue because they have clients with mortgages in excess of the secured limits and have been listing the unsecured portion in schedule f to qualify for chapter 13.
Nancy B. Clark
Borowitz, Lozano & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
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I was getting exciting about carving out homes on eligibility but the holding in Zimmer (Lam) that the unsecured lien can be modified is based on 506(a). The cases all say that 109(e) is read with 506(a).

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I like the argument about determining value "as of the petition date", but
everyone has really good ideas.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Hale Andrew Antico
Sent: Thursday, March 19, 2009 9:27 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Chapter 13 Eligibility
What Peter said.
Are there other areas of the law where a subsequent ruling of law impacts a
precondition that was already satisfied? Even if there are, allowing it
here goes against the plain language, common sense and public policy.
Hale
_____

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