How is the 2nd TD about to be stripped reflected in the Ch 13 plan?
Posted: Mon Dec 22, 2008 4:54 pm
X-Yahoo-Marked-Not-Spam:
Thank you for your reply. I have some follow up questions:
3A. I assume that the procedural device to obtain an order determining
property value is a motion. What is the procedural device to obtain
extinguishment of the deed of trust upon entry of the discharge? Is it also
a motion? Should these two requests be combined in a single motion?
3B. What if the client never obtains discharge--will the extinguished deed
of trust be revived? If the extinguished deed to trust can be revived, do
you get a more permanent outcome by doing an adversary proceeding to avoid
lien.
4. What does "EOD" stand for? Is it "entry of the discharge"?
Gratefully,
Alik Segal
Alik.Segal@gmail.com
310-367-3626
On Sun, Dec 21, 2008 at 1:14 AM, Law Offices of Louis J. Esbin wrote:
> Here is the analysis under California and Bankruptcy Law:
>
> 1. Under California law, the deed of trust must be extinguished once
> the underlying trust purpose is extinguished; i.e., there is no longer
> a debt owed to be secured by the deed of trust.
>
> 2. Under Bankruptcy Code Section 506, the deed of trust is determined
> to be wholly unsecured (rather than undersecured) and therefore, under
> In re Timbers of Inwood and In re Zimmer (citing In re Lam) there are
> no adequate protection payments required.
>
> 3. If you ask that the lien be avoided as of the commencement date,
> which our courts will not do without an adversary proceeding, you wind
> up extinguishing the trust purpose as of the date of filing, and
> therefore, possibly, increasing the unsecured claims in excess of the
> statutory limitation amount of Chapter 13. So, my recommendation has
> always been that you merely have an order determining value, with the
> extinguishment of the deed of trust upon entry of the discharge (the
> Valley Judges proceed in this manner, as now does Judge Riblet, and it
> is my understanding, the Riverside Judges and it is my understanding
> the Santa Ana Judges).
>
> 4. The Chapter 13 provides for payments to the wholly unsecured
> second (or third, etc.) as if it were, and paid prorata with, the
> Class 5 unsecured creditors. This is so stated in the Miscellaneous
> provision of the Plan with reference to the Order EOD determining the
> value. You may want to amend the Chapter 13 plan to be confirmed with
> such reference so that you have claim and issue preclusion upon entry
> of the final order of confirmation. You may need to object to a
> secured claim that is filed by the wholly unsecured lien holder(s) so
> that the Trustee pays them accordingly, as they must pay claims as
> filed, unless subject to objection and order thereon.
>
> Best regards. Lou Esbin
>
>
> --- In cdcbaa@yahoogroups.com , "aliksegalesq"
> wrote:
> >
> > The property value (350K) has sunk below the 1st Trust Deed/Mortgage
> > (375K) and the 2nd Trust Deed/Mortgage (115K) has become completely
> > unsecured. The debtor will strip it off in this chapter 13.
> >
> > 1. Should the 2nd Trust Deed/Mortgage that has become completely
> > unsecured still be listed on Schedule D?
> >
> > 2. The plan form says: "The Debtor estimates that non-priority
> > unsecured claims total the sum of . . ." on page 5, in the Class 5
> > section. Is that question asking for the total amount listed on
> > Schedule F (60K) or should the amount of the 2nd Trust Deed/Mortgage
> > (115K) that has become completely unsecured because of property value
> > decline be added to the total from Schedule F (60K) for a total of
> > 175K to be listed on page 5 of the plan.
> >
> > Gratefully,
> >
> > Alik Segal
> > Alik.Segal@...
> > 310-367-3626
> >
>
>
>
Thank you for your reply. I have some follow up questions:3A. I assume that the procedural device to obtain an order determining property value is a motion. What is the procedural device to obtain extinguishment of the deed of trust upon entry of the discharge? Is it also a motion? Should these two requests be combined in a single motion?
3B. What if the client never obtains discharge--will the extinguished deed of trust be revived? If the extinguished deed to trust can be revived, do you get a more permanent outcome by doing an adversary proceeding to avoid lien.
4. What does "EOD" stand for? Is it "entry of the discharge"?Gratefully,
Alik Segal Alik.Segal@gmail.com 310-367-3626On Sun, Dec 21, 2008 at 1:14 AM, Law Offices of Louis J. Esbin <Esbinlaw@sbcglobal.net> wrote:
Here is the analysis under California and Bankruptcy Law:
1. Under California law, the deed of trust must be extinguished once
the underlying trust purpose is extinguished; i.e., there is no longer
a debt owed to be secured by the deed of trust.
2. Under Bankruptcy Code Section 506, the deed of trust is determined
to be wholly unsecured (rather than undersecured) and therefore, under
In re Timbers of Inwood and In re Zimmer (citing In re Lam) there are
no adequate protection payments required.
3. If you ask that the lien be avoided as of the commencement date,
which our courts will not do without an adversary proceeding, you wind
up extinguishing the trust purpose as of the date of filing, and
therefore, possibly, increasing the unsecured claims in excess of the
statutory limitation amount of Chapter 13. So, my recommendation has
always been that you merely have an order determining value, with the
extinguishment of the deed of trust upon entry of the discharge (the
Valley Judges proceed in this manner, as now does Judge Riblet, and it
is my understanding, the Riverside Judges and it is my understanding
the Santa Ana Judges).
4. The Chapter 13 provides for payments to the wholly unsecured
second (or third, etc.) as if it were, and paid prorata with, the
Class 5 unsecured creditors. This is so stated in the Miscellaneous
provision of the Plan with reference to the Order EOD determining the
value. You may want to amend the Chapter 13 plan to be confirmed with
such reference so that you have claim and issue preclusion upon entry
of the final order of confirmation. You may need to object to a
secured claim that is filed by the wholly unsecured lien holder(s) so
that the Trustee pays them accordingly, as they must pay claims as
filed, unless subject to objection and order thereon.
Best regards. Lou Esbin
>
> The property value (350K) has sunk below the 1st Trust Deed/Mortgage
> (375K) and the 2nd Trust Deed/Mortgage (115K) has become completely
> unsecured. The debtor will strip it off in this chapter 13.
>
> 1. Should the 2nd Trust Deed/Mortgage that has become completely
> unsecured still be listed on Schedule D?
>
> 2. The plan form says: "The Debtor estimates that non-priority
> unsecured claims total the sum of . . ." on page 5, in the Class 5
> section. Is that question asking for the total amount listed on
> Schedule F (60K) or should the amount of the 2nd Trust Deed/Mortgage
> (115K) that has become completely unsecured because of property value
> decline be added to the total from Schedule F (60K) for a total of
> 175K to be listed on page 5 of the plan.
>
> Gratefully,
>
> Alik Segal
> Alik.Segal@...
> 310-367-3626
>
The post was migrated from Yahoo.
Thank you for your reply. I have some follow up questions:
3A. I assume that the procedural device to obtain an order determining
property value is a motion. What is the procedural device to obtain
extinguishment of the deed of trust upon entry of the discharge? Is it also
a motion? Should these two requests be combined in a single motion?
3B. What if the client never obtains discharge--will the extinguished deed
of trust be revived? If the extinguished deed to trust can be revived, do
you get a more permanent outcome by doing an adversary proceeding to avoid
lien.
4. What does "EOD" stand for? Is it "entry of the discharge"?
Gratefully,
Alik Segal
Alik.Segal@gmail.com
310-367-3626
On Sun, Dec 21, 2008 at 1:14 AM, Law Offices of Louis J. Esbin wrote:
> Here is the analysis under California and Bankruptcy Law:
>
> 1. Under California law, the deed of trust must be extinguished once
> the underlying trust purpose is extinguished; i.e., there is no longer
> a debt owed to be secured by the deed of trust.
>
> 2. Under Bankruptcy Code Section 506, the deed of trust is determined
> to be wholly unsecured (rather than undersecured) and therefore, under
> In re Timbers of Inwood and In re Zimmer (citing In re Lam) there are
> no adequate protection payments required.
>
> 3. If you ask that the lien be avoided as of the commencement date,
> which our courts will not do without an adversary proceeding, you wind
> up extinguishing the trust purpose as of the date of filing, and
> therefore, possibly, increasing the unsecured claims in excess of the
> statutory limitation amount of Chapter 13. So, my recommendation has
> always been that you merely have an order determining value, with the
> extinguishment of the deed of trust upon entry of the discharge (the
> Valley Judges proceed in this manner, as now does Judge Riblet, and it
> is my understanding, the Riverside Judges and it is my understanding
> the Santa Ana Judges).
>
> 4. The Chapter 13 provides for payments to the wholly unsecured
> second (or third, etc.) as if it were, and paid prorata with, the
> Class 5 unsecured creditors. This is so stated in the Miscellaneous
> provision of the Plan with reference to the Order EOD determining the
> value. You may want to amend the Chapter 13 plan to be confirmed with
> such reference so that you have claim and issue preclusion upon entry
> of the final order of confirmation. You may need to object to a
> secured claim that is filed by the wholly unsecured lien holder(s) so
> that the Trustee pays them accordingly, as they must pay claims as
> filed, unless subject to objection and order thereon.
>
> Best regards. Lou Esbin
>
>
> --- In cdcbaa@yahoogroups.com , "aliksegalesq"
> wrote:
> >
> > The property value (350K) has sunk below the 1st Trust Deed/Mortgage
> > (375K) and the 2nd Trust Deed/Mortgage (115K) has become completely
> > unsecured. The debtor will strip it off in this chapter 13.
> >
> > 1. Should the 2nd Trust Deed/Mortgage that has become completely
> > unsecured still be listed on Schedule D?
> >
> > 2. The plan form says: "The Debtor estimates that non-priority
> > unsecured claims total the sum of . . ." on page 5, in the Class 5
> > section. Is that question asking for the total amount listed on
> > Schedule F (60K) or should the amount of the 2nd Trust Deed/Mortgage
> > (115K) that has become completely unsecured because of property value
> > decline be added to the total from Schedule F (60K) for a total of
> > 175K to be listed on page 5 of the plan.
> >
> > Gratefully,
> >
> > Alik Segal
> > Alik.Segal@...
> > 310-367-3626
> >
>
>
>
Thank you for your reply. I have some follow up questions:3A. I assume that the procedural device to obtain an order determining property value is a motion. What is the procedural device to obtain extinguishment of the deed of trust upon entry of the discharge? Is it also a motion? Should these two requests be combined in a single motion?
3B. What if the client never obtains discharge--will the extinguished deed of trust be revived? If the extinguished deed to trust can be revived, do you get a more permanent outcome by doing an adversary proceeding to avoid lien.
4. What does "EOD" stand for? Is it "entry of the discharge"?Gratefully,
Alik Segal Alik.Segal@gmail.com 310-367-3626On Sun, Dec 21, 2008 at 1:14 AM, Law Offices of Louis J. Esbin <Esbinlaw@sbcglobal.net> wrote:
Here is the analysis under California and Bankruptcy Law:
1. Under California law, the deed of trust must be extinguished once
the underlying trust purpose is extinguished; i.e., there is no longer
a debt owed to be secured by the deed of trust.
2. Under Bankruptcy Code Section 506, the deed of trust is determined
to be wholly unsecured (rather than undersecured) and therefore, under
In re Timbers of Inwood and In re Zimmer (citing In re Lam) there are
no adequate protection payments required.
3. If you ask that the lien be avoided as of the commencement date,
which our courts will not do without an adversary proceeding, you wind
up extinguishing the trust purpose as of the date of filing, and
therefore, possibly, increasing the unsecured claims in excess of the
statutory limitation amount of Chapter 13. So, my recommendation has
always been that you merely have an order determining value, with the
extinguishment of the deed of trust upon entry of the discharge (the
Valley Judges proceed in this manner, as now does Judge Riblet, and it
is my understanding, the Riverside Judges and it is my understanding
the Santa Ana Judges).
4. The Chapter 13 provides for payments to the wholly unsecured
second (or third, etc.) as if it were, and paid prorata with, the
Class 5 unsecured creditors. This is so stated in the Miscellaneous
provision of the Plan with reference to the Order EOD determining the
value. You may want to amend the Chapter 13 plan to be confirmed with
such reference so that you have claim and issue preclusion upon entry
of the final order of confirmation. You may need to object to a
secured claim that is filed by the wholly unsecured lien holder(s) so
that the Trustee pays them accordingly, as they must pay claims as
filed, unless subject to objection and order thereon.
Best regards. Lou Esbin
>
> The property value (350K) has sunk below the 1st Trust Deed/Mortgage
> (375K) and the 2nd Trust Deed/Mortgage (115K) has become completely
> unsecured. The debtor will strip it off in this chapter 13.
>
> 1. Should the 2nd Trust Deed/Mortgage that has become completely
> unsecured still be listed on Schedule D?
>
> 2. The plan form says: "The Debtor estimates that non-priority
> unsecured claims total the sum of . . ." on page 5, in the Class 5
> section. Is that question asking for the total amount listed on
> Schedule F (60K) or should the amount of the 2nd Trust Deed/Mortgage
> (115K) that has become completely unsecured because of property value
> decline be added to the total from Schedule F (60K) for a total of
> 175K to be listed on page 5 of the plan.
>
> Gratefully,
>
> Alik Segal
> Alik.Segal@...
> 310-367-3626
>
The post was migrated from Yahoo.