Central District Consumer Bankruptcy Attorney's Association

If I understand you correctly, your proposal is that the property be valued
early in the case and that the lien strip adversary action be filed at or
near the end of the case using the results of the valuation motion as res
judicata. This was in an earlier post and that is what we will be doing as
necessary - sometimes the lien to be stripped does not cause the debtor to
exceed $336,xxx.
My hope was that the new legislation would obviate the need for this 2 step
process - no such luck.
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.
Law Offices of Louis J. Esbin
Sent: Wednesday, January 07, 2009 10:49 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Helping Familes Save Their Homes Legislation
David,
The issue of exceeding the jurisdictional amount of Chapter 13
following the valuation of property subject to liens is, or under
California law, should be a non-issue. As long as the underlying
trust purpose is not extinguished; i.e., the personal debt that is
subject to the lien is not discharged, the lien survives. Therefore,
as a matter of California law, the lender continues to be secured
(undersecured, but nevertheless secured by a lien secured by the
property) and not unsecured, because the lender was pledged the real
property as security, the lien for which survives until there is a
discharge of the underlying note (personal liability) is entered.
And, therefore, you do not want the lien "stripped," as it is commonly
and mistakenly referred, at the time of confirmation or effective upon
filing. Valuation of property and determining the extent a lien is
secured by equity in property does not effect property rights, as does
demanding a lien to be stripped, which requires due process and an
adversary proceeding.
Lou Esbin
Tilem" wrote:
>
> The Proposed Legislation:
>
> Section 2: Amendments to Section 109 do NOT appear to solve the
problem of
> having a stripped lien amount added to the general unsecured claim
amount
> making a debtor ineligible for Chapter 13. It DOES deal with post
> foreclosure deficiency amounts which would otherwise cause the
debtor to be
> over the unsecured debt limit. Credit counseling would not be required
> following receipt of foreclosure notice.
>
> Section 3: Amendments to Section 502(b) are completely ambiguous.
On the
> one hand, they appear to confer jurisdiction on the Bankruptcy Court
to hear
> and resolve TILA and other consumer protection claims before the
claim can
> be allowed. On the other hand, they appear to withdraw any jurisdiction
> from the Bankruptcy Court to hear these types of objections.
>
> Section 4: Amendments to Section 1322(b) would specifically allow
Chapter
> 13 lien stripping, or better yet, lien reductions on partially secured
> loans, i.e. first mortgages where the value is lower than the principal
> balance (but doesn't solve the eligibility problem mentioned above).
The
> loan term can be extended and the interest rate can be fixed at a rate
> established by the Fed's Board of Governors plus a "risk premium"
which will
> likely be the subject of extensive litigation.
>
> Section 5: Amendments to Section 1322(c) would require mortgage
lenders to
> file claims or notices of so-called garbage fees or have those fees
deemed
> waived.
>
> Section 6: Amendments to Section 1325(a) would impose a good faith
> requirement on lien reductions and specifically require that the
remaining
> lien on the property survives until the mortgage is completely paid
off, or
> the Chapter 13 discharge is entered - whichever is later. This is
somewhat
> ambiguous because it is unclear whether the surviving lien would
secure the
> original loan amount or the reduced loan amount.
>
> Section 7: Amendments to Section 1328 would clarify that a Chapter 13
> discharge would not discharge the mortgage as modified.
>
> Section 8: Would make these amendments effective as of the date of
> enactment and applicable to all pending or later filed cases.
>
> 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.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
> -----Original Message-----
[mailto:cdcbaa@yahoogroups. com] On
Behalf Of
> James T. King
> Sent: Wednesday, January 07, 2009 7:54 AM
> To: cdcbaa@yahoogroups. com
> Subject: [cdcbaa] Helping Familes Save Their Homes Legislation
>
>
>
>
> "Helping Families Save Their Homes in Bankruptcy Act" is now out and
ready
> to proceed!
>
> An e-mail from Maureen Thompson, NACBA Legislative Director was on
the list
> serve this morning indicating that Congress would probably be
included the
> new legislation in Obama's economic recovery plan. She also
indicated that
> John Conyers introduced identical legislation in the House of
> Representatives. I have attached the legislation in PDF and will
try and
> put in the documents on Yahoo.
>
> Jim King
>
Message
If I understand you
correctly, your proposal is that the property be valued early in the case and
that the lien strip adversary action be filed at or near the end of the case
using the results of the valuation motion as res judicata. This was in an
earlier post and that is what we will be doing as necessary - sometimes the lien
to be stripped does not cause the debtor to exceed $336,xxx.

My hope was that the new
legislation would obviate the need for this 2 step process - no such
luck.


David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.