Ch. 13 plan continue after foreclosure?
Posted: Wed Mar 19, 2008 10:38 am
I'm sure this happens all the time, but I haven't had it happen and a client just asked me about the ramifications.
Assume confirmed plan paying about 50% to unsecureds over 60 months. There is also real property (debtor's residence). Let's say debtor decides to let the property go to foreclosure during the Chapter 13. Income hasn't changed, he's just tired of putting money into an underwater property.
What happens to the Plan? Will the Trustee petition to increase plan payments based on debtor's new budget (assuming new rental expense is less than his prior mortgage)? If there's a deficiency on the mortgage after foreclosure, does that become an unsecured claim? How does that get paid through the plan?
And a more direct question: If there is an unsecured portion of the mortgage debt on the date of filing, must the debtor include that amount in the 109(e) debt limit calculation?
Thanks...
Mark
______________________
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
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 (or in any attachment).
I'm sure this happens all the time, but I haven't
had it happen and a client just asked me about the ramifications.
Assume confirmed plan paying about 50% tounsecureds over 60 months. There is also real property (debtor's
residence). Let's say debtor decides to let the property go toforeclosure during the Chapter 13. Income hasn't changed, he's just tired
of putting money into an underwater property.
What happens to the Plan? Will the Trustee
petition to increase plan payments based on debtor's new budget (assuming new
rental expense is less than his prior mortgage)? If there's a
deficiency on the mortgage after foreclosure, does that become an unsecuredclaim? How does that get paid through the plan?
And a more direct question: If there is an
unsecured portion of the mortgage debt on the date of filing, must the debtor
include that amount in the 109(e) debt limit calculation?
Thanks...
Mark
______________________Mark J. MarkusLaw
Office of Mark J. Markus11684 Ventura Blvd. PMB #403Studio City, CA91604-2652(818)509-1173 (818)509-1460 (fax)web: http://www.bklaw.com/This Firm is aQualified 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 addresseeonly. 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 (or in any
attachment).
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