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40 year old BK, Sec. 506, and an old SBA loan
charset="windows-1251"
Does this create a problem for me on my mortgage against David Eng?
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.
Patrick Green
Sent: Monday, July 19, 2010 9:26 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] 40 year old BK, Sec. 506, and an old SBA loan
See civil code 882.020 et seq. for ancient mortgages. May or may not help.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.
charset-ascii
The sol on enforcing the deed of trust has not run. Last I checked, I recall it being 60 or so years
Kenneth Jay Schwartz, Esq.
LAW OFFICE OF KENNETH JAY SCHWARTZ
21031 Ventura Boulevard, 12th Floor
Woodland Hills, California
91364-2203
Telephone: (818)226-1205
Email: kennethjschwartz@yahoo.com
Sent from my iPhone
On Jul 19, 2010, at 9:25 AM, "Patrick Green" wrote:
> See civil code 882.020 et seq. for ancient mortgages. May or may not help.
>
>
>
> If you have any questions or concerns, please contact me.
>
>
>
> Pat
>
>
>
> Patrick T. Green, Esq.
>
> Fitzgerald & Green
>
> Attorneys at Law
>
> 1010 E. Union Street
>
> Suite 206
>
> Pasadena, CA 91106
>
> Tel: 626-449-8433
>
> Fax: 626-449-0565
>
> pat@fitzgreenlaw.com
>
>
>
>
>
Holly Roark
> Sent: Sunday, July 18, 2010 2:06 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] 40 year old BK, Sec. 506, and an old SBA loan
>
>
>
>
>
> This is a unique one. Not my case, but a real estate attorney on my floor, George, came by my office to ask me whether I had any idea about how to deal with this. All thoughts are appreciated, and if you would be willing to take a call from George to discuss, let me know.
>
>
>
> 40 years ago the debtors filed a Chapter 7 in our jurisdiction and received a discharge. The debtors had an SBA loan that was secured by the debtors' business, which folded prior to the filing of the personal bankruptcy. (I don't know whether the business was liquidated or if any creditors got paid.) As is customary, the SBA recorded a deed of trust against the debtors' house stating in the deed of trust that it was "additional security" for the loan. In the last 40 years, the SBA has made no effort to foreclose on the home, though no payments have been made on the loan in 40 years. In fact, the SBA doesn't even have any records of this loan and were only apprised of their interest recently.
>
>
>
> About 10 years ago, the debtors' son inherited the home. Now, the debtors' son wants to sell the home. In order to clear title (since the SBA deed is popping up), George went to the SBA and asked them to sign a reconveyance. Obviously, the SBA declined; now that they are aware the deed exists, they want to get paid - with 40 years of interest.
>
>
>
> I told George that unfortunately, the bankruptcy did not wipe out the lien, and he agreed that's probably correct, however, he found a case somewhere in Louisiana (decided under section 506) saying something to the effect that if the SBA deed of trust can be construed as a "pledge", then it could have been wiped out in the bankruptcy. George then pointed to the "additional security" language in the deed and wondered whether that language makes it a "pledge" since the original security was the business. My initial response to that is that since the SBA had "perfected" its security interest by recording the deed, then I don't see how they could be considered to be an "unsecured" pledge. (He also said that if it is a "pledge", then the statute of limitations on that has run in any event.)
>
>
>
> In the original bankruptcy case, no one ever filed anything to get a determination of secured status or extent of the lien, but George's client seems to think that 40 years ago everyone understood that the loan had been "wiped out" and that's why the SBA hasn't tried to foreclose all these years, but obviously, that may not be the case. With regard to "stripping off" the SBA loan in the Chapter 7, I understand that Dewsnup applies in the 9th Circuit, but that case was decided in 1992. 40 years ago (for those of you who may have been practicing then), would the debtors have been able to strip off or strip down this SBA loan in their chapter 7, and if so, would that law apply if the bankruptcy case was reopened today? (I understand these involve some substantive and procedural issues that I can and will research on my own, but I just thought I would put it out there since some of you guys have been at this a long time and might know off the top of your heads!)
>
>
>
> On the date of filing the home was worth about $14K, and the SBA was owed about $80K. I believe there was a senior loan that was for more than the fair market value such that the SBA loan would have been unsecured.
>
>
>
> Thanks for all your insights and I am looking forward to hearing what you have to say on this interesting issue!
>
>
>
> --
> Holly Roark
> holly@roarklawoffices.com
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
>
>
>
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The sol on enforcing the deed of trust has not run. Last I checked, I recall it being 60 or so yearsKenneth Jay Schwartz, Esq.LAW OFFICE OF KENNETH JAY SCHWARTZ21031 Ventura Boulevard, 12th FloorSent from my iPhoneOn Jul 19, 2010, at 9:25 AM, "Patrick Green" <pat@fitzgreenlaw.com> wrote:
See civil code 882.020 et seq.
for ancient mortgages. May or may not help.
If you have any questions or
concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
From: cdcbaa@yahoogroups.com
[mailto:cdcbaa@yahoogroups.com] On Behalf Of Holly Roark
Sent: Sunday, July 18, 2010 2:06 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] 40 year old BK, Sec. 506, and an old SBA loan
This is a unique one. Not my case, but a real estate
attorney on my floor, George, came by my office to ask me whether I had any
idea about how to deal with this. All thoughts are appreciated, and if
you would be willing to take a call from George to discuss, let me know.
40 years ago the debtors filed a Chapter 7 in our
jurisdiction and received a discharge. The debtors had an SBA loan that
was secured by the debtors' business, which folded prior to the filing of the
personal bankruptcy. (I don't know whether the business was liquidated or
if any creditors got paid.) As is customary, the SBA recorded a
deed of trust against the debtors' house stating in the deed of trust that
it was "additional security" for the loan. In the last 40 years,
the SBA has made no effort to foreclose on the home, though no payments have
been made on the loan in 40 years. In fact, the SBA doesn't even
have any records of this loan and were only apprised of their interest
recently.
About 10 years ago, the debtors' son inherited the
home. Now, the debtors' son wants to sell the home. In order
to clear title (since the SBA deed is popping up), George went to the SBA and
asked them to sign a reconveyance. Obviously, the SBA
declined; now that they are aware the deed exists, they want to get paid -
with 40 years of interest.
I told George that unfortunately, the bankruptcy did
not wipe out the lien, and he agreed that's probably correct, however, he found
a case somewhere in Louisiana (decided under section 506) saying something to
the effect that if the SBA deed of trust can be construed as a
"pledge", then it could have been wiped out in the
bankruptcy. George then pointed to the "additional
security" language in the deed and wondered whether that language makes
it a "pledge" since the original security was the
business. My initial response to that is that since the SBA had
"perfected" its security interest by recording the deed, then I don't
see how they could be considered to be an "unsecured"
pledge. (He also said that if it is a "pledge", then the
statute of limitations on that has run in any event.)
In the original bankruptcy case, no one ever filed anything
to get a determination of secured status or extent of the lien, but George's client
seems to think that 40 years ago everyone understood that the loan had been
"wiped out" and that's why the SBA hasn't tried to foreclose all
these years, but obviously, that may not be the case. With regard to
"stripping off" the SBA loan in the Chapter 7, I understand that
Dewsnup applies in the 9th Circuit, but that case was decided in
1992. 40 years ago (for those of you who may have been practicing then),
would the debtors have been able to strip off or strip down this SBA loan in
their chapter 7, and if so, would that law apply if the bankruptcy case was
reopened today? (I understand these involve some substantive and
procedural issues that I can and will research on my own, but I just
thought I would put it out there since some of you guys have been at this a
long time and might know off the top of your heads!)
On the date of filing the home was worth about $14K, and the
SBA was owed about $80K. I believe there was a senior loan that was for
more than the fair market value such that the SBA loan would have been
unsecured.
Thanks for all your insights and I am looking forward to
hearing what you have to say on this interesting issue!
--
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
Reply to sender |
Reply to group |
The post was migrated from Yahoo.
See civil code 882.020 et seq. for ancient mortgages. May or may not help.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.
This is a unique one. Not my case, but a real estate attorney on my floor,
George, came by my office to ask me whether I had any idea about how to deal
with this. All thoughts are appreciated, and if you would be willing to
take a call from George to discuss, let me know.
40 years ago the debtors filed a Chapter 7 in our jurisdiction and received
a discharge. The debtors had an SBA loan that was secured by the debtors'
business, which folded prior to the filing of the personal bankruptcy. (I
don't know whether the business was liquidated or if any creditors got
paid.) As is customary, the SBA recorded a deed of trust against the
debtors' house stating in the deed of trust that it was "additional
security" for the loan. In the last 40 years, the SBA has made no effort to
foreclose on the home, though no payments have been made on the loan in 40
years. In fact, the SBA doesn't even have any records of this loan and were
only apprised of their interest recently.
About 10 years ago, the debtors' son inherited the home. Now, the debtors'
son wants to sell the home. In order to clear title (since the SBA deed is
popping up), George went to the SBA and asked them to sign a
reconveyance. Obviously, the SBA declined; now that they are aware the deed
exists, they want to get paid - with 40 years of interest.
I told George that unfortunately, the bankruptcy did not wipe out the lien,
and he agreed that's probably correct, however, he found a case somewhere in
Louisiana (decided under section 506) saying something to the effect that if
the SBA deed of trust can be construed as a "pledge", then it could have
been wiped out in the bankruptcy. George then pointed to the "additional
security" language in the deed and wondered whether that language makes it a
"pledge" since the original security was the business. My initial response
to that is that since the SBA had "perfected" its security interest by
recording the deed, then I don't see how they could be considered to be an
"unsecured" pledge. (He also said that if it is a "pledge", then the
statute of limitations on that has run in any event.)
In the original bankruptcy case, no one ever filed anything to get a
determination of secured status or extent of the lien, but George's client
seems to think that 40 years ago everyone understood that the loan had been
"wiped out" and that's why the SBA hasn't tried to foreclose all these
years, but obviously, that may not be the case. With regard to "stripping
off" the SBA loan in the Chapter 7, I understand that Dewsnup applies in the
9th Circuit, but that case was decided in 1992. 40 years ago (for those of
you who may have been practicing then), would the debtors have been able to
strip off or strip down this SBA loan in their chapter 7, and if so, would
that law apply if the bankruptcy case was reopened today? (I understand
these involve some substantive and procedural issues that I can and will
research on my own, but I just thought I would put it out there since some
of you guys have been at this a long time and might know off the top of your
heads!)
On the date of filing the home was worth about $14K, and the SBA was owed
about $80K. I believe there was a senior loan that was for more than the
fair market value such that the SBA loan would have been unsecured.
Thanks for all your insights and I am looking forward to hearing what you
have to say on this interesting issue!
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
This is a unique one. Not my case, but a real estate attorney on my floor, George, came by my office to ask me whether I had any idea about how to deal with this. All thoughts are appreciated, and if you would be willing to take a call from George to discuss, let me know.
40 years ago the debtors filed a Chapter 7in our jurisdiction and received a discharge. The debtors had an SBA loan that was secured by the debtors' business, which folded prior to the filing of the personal bankruptcy. (I don't know whether the business was liquidated or if any creditorsgot paid.) As is customary, the SBArecorded a deed of trust against the debtors'house stating in the deed of trust that it was "additional security" for the loan. In the last 40 years, the SBA has made no effort to foreclose on the home, though no payments have been made on the loanin 40 years. In fact, the SBA doesn't even have any records of this loan and were only apprised of their interest recently.
About 10 years ago, the debtors' son inherited the home.Now, the debtors' son wants to sell the home. In order to clear title (since the SBA deed is popping up), George went to the SBA and asked them to sign a reconveyance.Obviously, the SBA declined;now that they are aware the deed exists, they want to get paid - with40 years ofinterest.
I told George thatunfortunately, the bankruptcy did not wipe out the lien, and he agreed that's probably correct, however, he found a case somewhere in Louisiana (decided under section 506) saying something to the effect that if the SBA deed of trust can be construed as a "pledge",then it could have been wiped out in the bankruptcy.George then pointed to the "additional security" language in the deed and wondered whether that languagemakes it a "pledge" since theoriginal securitywasthe business.My initial response to that is that since the SBAhad "perfected" its security interest by recording the deed, then I don't see how they could be consideredto be an "unsecured" pledge. (He also said that if it is a "pledge", then the statute of limitations on that hasrun in any event.)
In the original bankruptcy case, no one ever filed anything to get a determination of secured status or extent of the lien, but George'sclient seems to think that 40 years ago everyone understood that the loan had
The post was migrated from Yahoo.