Blogs

5 years 4 months ago

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.
The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.
Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.
The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.
Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.
McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)
Dewsnup v. Timm, 502 U.S. 410 (1992).
Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).
11 U.S.C. Sec. 502
11 U.S.C. Sec. 506(a)
11 U.S.C. Sec. 506(d)
The post Can I Strip off a Second Mortgage in Chapter 7? Now you Can! appeared first on St. Petersburg Law Blog.


5 years 4 months ago

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.
The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.
Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.
The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.
Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.
McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)
Dewsnup v. Timm, 502 U.S. 410 (1992).
Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).
11 U.S.C. Sec. 502
11 U.S.C. Sec. 506(a)
11 U.S.C. Sec. 506(d)
The post Can I Strip off a Second Mortgage in Chapter 7? Now you Can! appeared first on St. Petersburg Law Blog.


7 years 4 days ago

Many individuals filing for bankruptcy experience various types of collections efforts prior to filing.  These collections efforts can include anything from harassing phone calls and letters to law suits and even garnishment.  If you, or someone you know, is currently receiving phone calls or other collections efforts you should contact an attorney immediately. 
Creditors can make certain efforts to collect debts, however, some types of conduct are illegal and the debtor may be able to recover monetary damages.  Even if your situation does not rise to the level of damages, collections efforts can be frustrating, embarrassing, and even costly for a debtor. 
Once you choose to retain an attorney you can inform your creditors that you are represented and provide your attorney's name and contact information to the creditor.  The attorney can then confirm representation and your creditor may stop contacting you.  However, it is important to know that your creditor is not legally required to stop contacting you until you actually file your bankruptcy petition with the court. 
Once your case is filed your creditors are not legally permitted to contact you or try to collect the debt from you.  If your creditors continue to contact you please inform your attorney. 
There is an exception to this general rule that creditors may not collect debts after filing.  If you currently have a bank account with an institution that is also listed as an unsecured creditor (i.e. you have a debit card and a credit card with the same bank), the creditor can take the funds out of your bank account until the debt is satisfied in full.  When filling out your debts  you should check to see if you owe any money to your bank for anything: including, but not limited to, credit cards, overdraft fees, and/or personal loans.  If you do you should inform your attorney who can provide advice accordingly.
While generally we are looking for unsecured debts, there are a handful of financial institutions that will block use of ATM or debit cards if you hold a secured debt (for example a car loan or home loan) with the institution pending a reaffirmation agreement.  You should still be able to access your funds from a bank branch, but your debit card may not work.  This is not the policy of every institution, but you may want to check with your financial institution prior to filing if the situation applies to you.  
If you have questions, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney today!


7 years 4 days ago

Many people filing for bankruptcy choose to hire an attorney to file their petition.  Bankruptcy law is very complex and changes from time to time making it somewhat difficult to navigate for a pro se debtor.  It is important to remember, that even though you have an attorney you are still personally responsible for the completeness and accuracy of your petition. 
Your attorney will ask you to provide a number of documents including, but not always limited to, pay stubs, tax returns, and lists of assets and debts. When you are providing information about your debts it is imperative that you provide a complete and accurate list.  It is also imperative that addresses of creditors are correct.  Your attorney cannot obtain all of this information for you because your attorney doesn't know what your debts are.  We can run a credit report for you, but you still need to review that information for accuracy and missing information. 
You will also have to provide information regarding your assets.  Your attorney will then review this information and prepare your bankruptcy petition.  Your attorney can only properly advise you about your case when all of the information is accurate and complete.  Any missing information hinders your attorney's ability to advise you and it may adversely affect your case. 
After your petition is prepared, your attorney will have you come in to review and sign the petition.  This time should be used very wisely.  It is imperative that the debtor thoroughly review the petition for any inaccuracy or missing information.  This is the last opportunity to add creditors prior to filing.  If you realize after filing that you missed a creditor there will be fees to add the creditor(s) to your bankruptcy. Undisclosed assets can cause very serious problems as the trustee may consider the failure to disclose an asset fraud. 
When you sign your petition you are signing it under penalty of perjury.  You alone, and not your attorney, is responsible for the contents of the petition.  This is also a great time to ask any questions you may have.  This is the time to make sure you understand what has been listed.  You can also ask your attorney about the process and any other questions you may have. We cannot answer an unasked question.
If you have questions, or would like to schedule a free consultation, please contact a St. Louis Bankruptcy Attorney today!


7 years 4 days ago

I am pleased to announce Diamond Law has opened a 2nd location on the eastside of El Paso.  For about a year we had a small office on the eastside opened 2 days a week, but now we finally took the plunge and opened up a beautiful (I decorated) new office to better serve El Pasoans.  I always heard that El Paso was one of the largest cities per square mile in the country. El Paso covers  1013 square miles - all the more reason to add a second office. 
bankruptcy law office open for businessDIAMOND LAW is no different than any other small business - in order to expand we spent money on furniture and equipment.  We purchased another huge blue DIAMOND LAW sign to be recognized and to make it clear what type of law we practice we added a red lit 'Bankruptcy' sign.  DIAMOND LAW is all about being on top of  technology just ask Christian our IT guy. We have cameras at each location so if your lawyer happens to be on the opposite side of town - you can still have a face to face appointment.  DIAMOND LAW is all about customer service.  I know people say that especially in the service industry, but we do.  We fight the fights in Bankruptcy Court- to protect our clients in their Chapter 7, 11 or 13 for personal and business cases.   Why? - because that's our job - to protect you - by providing hard line representation.  We really work hard at raising the bar and now DIAMOND LAW is proud to announce we offer free hugs. 


7 years 4 days ago

There is one call every bankruptcy lawyer dreads getting from a client after their case has been closed.  The call  regarding a missing creditor - a creditor not listed on their bankruptcy schedules and now the creditor is making demands for payment or a lawsuit has been filed against the client by this creditor.  It's a common mistake and one that unfortunately happens all too frequently.  The Bankruptcy Courts are divided on whether or not a no-asset chapter 7 case can be reopened to add a new creditor.  In the Western District of Texas where I practice, the current state of the law is you cannot discharge the claim of the creditorIf there was a distribution made to the creditors by the Chapter 7 Trustee then the law is uniform that the debtor is flat out of luck.missing creditors
By the time potential clients contact a Bankruptcy Lawyer they are under a great deal of stress.  Often they've stopped answering all creditor calls and trash all their mail. Obtaining a Credit Report helps a great deal, especially if it's one of the specialized reports designed for the purpose of preparing bankruptcy documents.  A Credit Report is not a cure all.  Not every creditor reports to one or more of the Credit Bureaus.  A Credit Report lists: mortgage lender, car purchases and most but not all credit cards.  Certain creditors are automatically listed on bankruptcy schedules such as the Internal Revenue Service (IRS).  The foregoing types of creditors are listed because of requirements established by the local rules of a Bankruptcy Court.
There are many types of creditors and other potential claimants that do not show up on Credit Reports: small retailers; medical bills; ambulance bills; utilities; payday loans; pawned items; loans guaranteed for a family member or friend; money borrowed from a family member or friend; rent from an apartment complex or to the homeowner of  the house you rented are examples of creditors not listed on a Credit Report.  There are potential claimants such as those arising from of an accident which is not covered by insurance, a dispute with a neighbor over a variety of issues,  unpaid tuition, are types of claims not listed in a Credit Report.  If a client fails to disclose a creditor to their lawyer, this debt would not be listed in their bankruptcy.  Another example of a missed creditor:  I didn't think I owed the claimant anything and in fact, I think the claimant owes me. 
On the business side of bankruptcy, there are potential claims by customers for warranty issues, business creditors the client guaranteed for their corporation or limited liability company.  It's important to include every possible liability to your bankruptcy schedules.
The prime rule in real estate is location, location and location and in the same vein the prime rule in bankruptcy is notice, notice and notice (review, review and review).    When filling out the bankruptcy questionnaire take time to reflect and think about every potential person or business who might claim you owe them money.  There are two important things a client should do: first, not to rely on a Credit Report exclusively; second, take your time to reflect on who might be out there with a claim or potential claim.  Remember, whether you really owe the claimant something is not the issue.  The issue is giving notice to the claimant so that any potential claim is disposed in your bankruptcy.  Even if you don't owe the claimant anything, you still may be faced with having to defend a lawsuit, which is expensive. This type of lawsuit can be avoided by simply providing a name, address, and some basic information.


7 years 4 days ago

Chapter 13 Bankruptcy gives you an opportunity to pay arrearages for your home, car, furniture or other secured debts and it allows you to have a repayment plan for your unsecured creditors.  If you are currently in a Chapter 13, it is important for you to know that your attorney's realize 'life happens' which can upset your financial obligations. People can lose their jobs, get divorced, have major car trouble, damage to their home, illness and so on.  In order for your Chapter 13 case to be successful it is necessary for you to keep in touch with your attorney when the going gets tough. There are different kinds of remedies that may be available for you to keep your Chapter 13 case afloat.successful bankruptcy, bankruptcy, debt relief  It is important that you follow your attorney’s instructions closely and make sure that your payments to the Chapter 13 Trustee are made timely and consistently. If this is going to be a problem then you should address it with your bankruptcy attorney in order to find a solution before your case spirals downward. If you fail to make your Chapter 13 payments your case could get dismissed and this could put your assets in jeopardy. During the three (3) to five (5) years of your bankruptcy, you must keep your attorney informed.  Having a positive attitude helps when dealing with bumps in road that come your way.  Falling behind on your Chapter 13 payment or being in a tight situation doesn’t mean you should give up on your bankruptcy. There can be setbacks but if you reach out for help there may be a solution for you.


7 years 4 days ago

Myths and Truths About Chapter 7 Bankruptcy, Part III
Myth:  If a debtor wishes to retain personal property or real property, the property can be excluded from the bankruptcy and does not need to be listed in the petition.
Truth:  All property, real and personal, a debtor owns at the time of the bankruptcy must be listed in the bankruptcy schedules, even if the debtor intends to retain the property and maintain the payments.  Many debtors believe that if they are current on their payments and are going to continue paying for the real or personal property, such as a vehicle or home, they can leave the debt off the bankruptcy petition entirely.  This is not true.  The trustee and bankruptcy court want to know the assets debtors have at the time of filing.  They want to know what property the debtors have, the value of the property, and the amount still owed on the property.  The lien holder for the property must be listed with their address so they get notice of the bankruptcy.  If the debtor wishes to retain the property and maintain the payments, the debtor will indicate that in the petition so the creditor knows they intend to retain and reaffirm.  It is important for debtors to list all their property, even if they wish to retain it, so the trustee may determine whether there is unexempt equity and proceed accordingly.
Myth:  A debtor is not required to list cash they have on hand.
Truth:  A debtor must list any cash they have on hand at the time of filing the bankruptcy.  Schedule B specifically asks about cash on hand.  If the debtor leaves that question blank, they are stating to the trustee that they do not have cash on hand.  The debtor has an obligation to list any money they have in their possession, in their house, or anywhere else, such as a safe deposit box at the bank.  This rule also applies to un-cashed checks the debtor possesses.  Many debtors may believe it is acceptable to take money out of the bank or cash a check and keep it in cash so the trustee does not know about it and potentially require the debtor to turn that money over to pay some of their unsecured creditors.  This is false.  Any property a debtor has must be listed, including cash.  If not reported, the debtor can be investigated.  It is essential for a debtor to list all property and value that property honestly and fairly. 
If you have any questions, please contact a St. Louis or St. Charles bankruptcy attorney.


7 years 4 days ago

Myths and Truths About Chapter 13 Bankruptcy, Part III
Myth:  A debtor can only file a Chapter 13 bankruptcy if they are trying to save a house from foreclosure or a car from repossession.
Truth:  There are several reasons why a person may file a Chapter 13 bankruptcy.  One reason is the debtor is over median.  There is a median income that is determined for each state depending on the household size.  If a debtor's income is more than the median income, the debtor may be required to file a Chapter 13 bankruptcy instead of Chapter 7.  The debtor would then pay back a certain amount to their unsecured creditors based on the disposable monthly income in the means test. 
A debtor may also need to file a Chapter 13 bankruptcy if they have equity in their property.  This is referred to as the liquidation analysis.  If a debtor has unexempt equity, they may want to file a Chapter 13 and pay back their unsecured creditors an amount equal to their unexempt equity.  For example, if a debtor has a vehicle worth $10,000 without a loan against it and $3,000 is exempt under the vehicle exemption and $500 under the wildcard exemption in Missouri, there is $6,500 in unexempt equity.  In a Chapter 7, the trustee would be able to take the car and sell it to pay $6,500 to unsecured creditors.  The other option through a Chapter 13 is to pay the $6,500 to unsecured creditors.  In return, the trustee will allow the debtor to retain their property and keep the equity.  If the debtor is under median, they would pay back $6,500 to unsecured creditors, and the rest would be discharged.
Another reason to file a Chapter 13 bankruptcy would be if the debtor is not eligible to file a Chapter 7 bankruptcy.  A person can only file a Chapter 7 bankruptcy every eight years, but they can file a Chapter 13 six years after filing a Chapter 7.  If they are being pursued by creditors, the Chapter 13 may be their best option if a Chapter 7 may not be completed at that time.
As you can see, there are many reasons for debtors to file a Chapter 13 bankruptcy.  If you would like more information about this, please contact a St. Louis or St. Charles bankruptcy attorney.


7 years 4 days ago

There is a common misperception that debtors cannot purchase or sell any property while in a chapter 13 bankruptcy.  That simply is not the case.  However, you will need permission from the court to complete any purchase or sale. 
Should you find that you would like to sell or purchase an item, for example a house or vehicle, you should contact your attorney right away.  Your attorney will need some information from you.  This information will include the selling price, financing terms, the length of the agreement and so forth.  Basically, you should provide the proposed contract terms to your attorney. 
Your attorney will then prepare a motion to either sell or purchase, whatever is appropriate, and file the motion with the court.  That motion will have to be set for a hearing a minimum of 21 days from the day of filing.  That 21 day period allows all of your creditors and the trustee to receive notice and allows time for any objections.  If there is an objection all may not be lost.  It may be an objection that you and your attorney can cure.  If the objection holds you may not be able to buy or sell the property. 
If there is no objection within the 21 day time frame, a judge will likely grant your motion.  At that point, your attorney can submit an order to the judge.  The judge will need to sign this, and only after there is a signed order can you sell or purchase the property.
If you intend to purchase something, like a car, the motion can be written to cover any comparable vehicle up to a an established debt limit in the event that a particular car you were in interested in is no longer available after this process has been completed.  It is also important to know that must be able to demonstrate that you can actually afford the purchase. 
As you can see, this can take some time to complete so you should speak to your attorney about the process as soon as possible if you are interesting in making a purchase or selling an item while in a chapter 13 bankruptcy. 
If you have questions about this, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney today.


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