When Not to File Bankruptcy - 13 More Examples

13 More Examples of Situations When You Should Not File Bankruptcy.

Supreme Court to consider lien stipping

The Supreme Court has granted Bank of America's writ of certiori to consider lien striping of undewater mortgage in chapter 7.

Chapter 13 plan payments

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Thursday, November 20, 2014

Mortgage Modification under the Bankruptcy Court's New "Mortgage Modification Mediation" Program

Bankruptcy Attorney Mortgage ModificationThe Bankruptcy Courts in Miami has recently started a new program to help people get a mortgage modification in your to help them save their home from foreclosure with the assistance of the bankruptcy court as part of their  chapter 13 bankruptcy case.  Most of the time, the homeowner seeks to modify their first mortgage and is able to wipe out their second mortgage as the second mortgage is "underwater"

The program is called "Mortgage Modification Mediation" (MMM). It is available for homeowners and certain investment property owners who are seeking a modification of their mortgage and may be facing foreclosure of the mortgages on their property.  As part of the MMM program, the Bankruptcy Court appoints a mediator to work with the debtor and their bankruptcy attorney in reaching an agreement.  MMM has been successful in about 80% of the cases in other parts of Florida that previously instituted the program. One advantage of this program is that it provides for better communication with the mortgage lender in the process of negotiating a mortgage modification. A mediator is appointed by the Bankruptcy Court to help the parties negotiate an agreement.

As part of this process, an order is issued by the Bankruptcy Court requiring your mortgage lender to register with the internet portal and negotiate with you for a mortgage modification. The documents that are needed for the mortgage company to consider the mortgage for a modification are submitted on an internet portal for better communications.   All communications between the parties is done through the MMM Portal. After the order is entered the homeowner, mortgage lender and mediator communicate and meet to mediate a modification. In the meeting, all parties must be really and able to settle all matters.

Tuesday, November 18, 2014

When Not to File for Bankruptcy - 13 More Examples



miami chapter 7 chapter 13 bankruptcy attorney1. Urban Legend - doing it inappropriately because "everybody at work did it"

2. Foreclosures - to discharge a potential mortgage deficiency on your home - the mortgage lender may never bring it

3. Exemptions - recently moved to Florida from another state, another state's exemptions apply,  and alot of your property is subject to liquidation in a chapter 7 case 

4. Too Much Property - substantial amount of property that is not exempt and the chapter 7 trustee is able to liquidate a lot of property 

5. Too Much Income -  an "abusive filing" and that will be dismissed or converted to chapter 13 or 1

6. Intangible Property - intangible property is real property. A potential personal injury claim or interest in a trust or estate may be very valuable. Non-exempt intangible property is not yours anymore when you file chapter 7 - it belongs to the chapter 7 trustee. That valuable personal claim - all the chapter 7 trustee has to do is pick up the phone and settle for whatever he deems appropriate by the Court - in most case, you get nothing.

7. Chapter 7 - when should have filed under chapter 13

8. Chapter 13 - when should have filed under chapter 7, such as little income and no non-exempt property

9. Cooperation - full cooperation with a chapter 7 trustee is required and the failure to do so may result in the lack of discharge of debt

10. Only One Large Creditor - sometimes if there is only one creditor, you are just moving the state court case over to the Bankruptcy Court - even worse, the creditor may have more power over you in a bankruptcy case

11. Valuable Real Estate in Another Country - a chapter 7 trustee can have a real estate broker in the other country sell it

12. Property Owned Together with Spouse - the exemption for property owned as "tenants by the entireties" is not always not a good bet as does not always fully work or is very difficult to prove

13. Eviction - to buy a few more days




Petition for Writ of Certiorari Granted on Chapter 7 Lien Stripping Issue

Most commentators suggest that the days of lien stripping in chapter 7 bankruptcy cases is soon to end. Yesterday the U.S. Supreme Court granted Bank of America's writ of certiorari which will allow it to address the issue of lien stripping in chapter 7 cases. 

The numerous recent appellate decisions out of the 11th Circuit have been suggesting that the issue would be considered by the 11th Circuit en banc or by the Supreme Court. The 11th Circuit Courts were forced by the "prior precedent rule" to apply its Foledore decision, which allowed lien stripping in chapter 7.  Under the "prior precedent rule", the 11th Circuit held that the Supreme Court's landmark decision in Dewsnup was not explicit enough to overrule Folendore. 



The Supreme Court's Docket

Docketed: August 13, 2014 No. 14-163
Title: Bank of America, N.A., Petitioner v. Edelmiro Toledo-Cardona
Lower Court: United States Court of Appeals for the Eleventh Circuit, Case Nos. (13-15855)
Decision Date: May 5, 2014



~~~Date~~~ ~~~~~~~Proceedings  and  Orders~~~~~~~~~~~~~~~~~~~~~
Aug 13 2014Petition for a writ of certiorari filed. (Response due September 12, 2014)
Aug 25 2014Order extending time to file response to petition to and including October 14, 2014.
Oct 6 2014Brief of respondent Edelmiro Toledo-Cardona in opposition filed.
Oct 21 2014Reply of petitioner Bank of America, N.A. filed.
Oct 22 2014DISTRIBUTED for Conference of November 7, 2014.
Nov 10 2014DISTRIBUTED for Conference of November 14, 2014.
Nov 17 2014Petition GRANTED The petition for a writ of certiorari in No. 13-1421 is granted. The cases are consolidated and a total of one hour is allotted for oral argument.