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Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055.  www.bublicklaw.com

The U.S. Supreme Court previously issued its decision on an important issue of chapter 13 bankruptcy law in the case of Hamilton, Chapter 13 Trustee v. Lanning. Justice Samuel Alito authored the Court's decision in which only Justice Scalia dissented. The issue involved was how "a bankruptcy court should calculate a debtor's 'projected disposable income'" which is one of the factors upon which the amount of a chapter 13 debtor's monthly plan payment is based. The Court rejected the "mechanical approach" and adopted the "forward-looking approach" pursuant to which the Court may, in the "the most unusual cases," go beyond the statutory formula for determining "disposable income" and "take into account other known or virtually known certain information about the debtor's future income or expenses."

The Court first reviewed the pre-BAPCPA (which was enacted in 2005) situation in which the Bankruptcy Code only "loosely defined 'disposable income'" and did "not define term 'projected disposable income.'" The Court stated that "in most cases, bankruptcy courts used a 'mechanical approach' in calculating projected disposable income" pursuant to which monthly income was multiplied by the number of the months of the plan and then the portion of the result that was "excess" or "disposable" was determined for dedication to the chapter 13 plan. "In exceptional cases, the bankruptcy courts took into account foreseeable changes in a debtor's income or expenses."

The Court noted that the BAPCPA "left the term 'projected disposable income' undefined but specified in some detail" the manner in which it is to be calculated. In general "disposable income" is based upon "current monthly income" less certain "amounts reasonably necessary to be expended" for maintenance and support and other items. The term current monthly income is statutorily defined and generally based on the 6-month period prior to the date preceding the filing of the bankrkuptcy case. "Amounts reasonably necessary to be expended" is calculated in a different manner for those below and those above the State median income amount.

The Court adopted the "forward-looking approach" which would allow for the consideration of the debtor's actual projected income in addition to the historically based "current monthly income." The court held that this approach is supported by the "ordinary meaning of the term 'projected.'" The Court noted that the term "projected" is not defined in the statute and that in "ordinary usage future occurrences are not 'projected' based on the assumption that the past will necessarily repeat itself.

The Court also noted the usage of the word "projected" in other federal statutes and stated that "Congress rarely used it [the phrase "projected"] to mean simple multiplication." In contrast, the Court referred to certain provisions in the Bankruptcy Code and noted that when Congress wished to mandate "simple multiplication, it does so unambiguously-most commonly by using the term 'multiplied'".

The Court remarked that pre-BAPCPA case law favors the "forward-looking" approach in that the general rule was that "courts would multiply a debtor's current monthly income by the number of months" of the plan as the first step in determining projected disposable income. But the Court also observed that the courts also "had discretion to account for known or virtually certain changes in the debtor's income." The Court noted that pre-BAPCPA practice is telling based on the principal that it "will not read the Bankruptcy Code to erode past bankruptcy practice absent a clear indication that Congress intended such a departure."

The Court also observed that the mechanical approach "clashed" with the terms of 11 U.S.C. section 1325 in that it would read out of the statute the phrase "to be received in the applicable commitment period" and the direction to determine projected disposable income "as of the effective date of the plan" (as opposed to the filing date).

But the Court noted that the statutory formula for determining "disposable income" still plays an important function under the forward-looking approach in that in "most cases, nothing further is required" and that only "in the most unusual cases" may a court "go further and take into account other known or virtually certain information about the debtor's future income or expenses." In short, the Court adopted the Tenth Circuit's analysis that "a person making a projection uses past occurrences as a starting point."

The Court further noted that the mechanical approach would "produce senseless results that we do not think Congress intended" where the debtor's income has changed since the historical six month period.

Justice Scalia dissented and held that the Court's conclusion is "contrary the Code's text" and "refus[es] to hold that Congress meant what it said."Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.

Bankruptcy Attorney Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055.  www.bublicklaw.com

A topic of much concern is liability in a residential mortgage foreclosure in Florida.

In a typical residential mortgage transaction in Florida, there are two instruments - the promissory note and the mortgage. The promissory note documents the actual terms of borrowing and the mortgage provides for a lien on the real property to secure the debt of the promissory note.

In a typical residential mortgage foreclosure action in this part of Florida, the foreclosure case initially usually only seeks a judgment setting a foreclosure sale of the involved real estate - not a "money judgment" upon which the mortgage company can seek "execution" or collection of the sum of due.   This judgment of foreclosure only usually seeks the setting of a foreclosure auction sale by the Clerk of the Court. It should be noted though, that some residential mortgage foreclosure cases contain an additional count for a judgment on the promissory note which would be a "money" judgment and allow the mortgage company to seek "execution" or collection from any non-exempt assets

After the foreclosure sale, the mortgage company may be able to seek a "deficiency" judgment or otherwise sue for the balance due on the promissory note that was not paid from proceeds of the foreclosure sale. In recent times in Miami, Florida most mortgage companies have not pursued deficiency judgments for a variety of reasons.

In a situation of a first and second mortgage on a property in today's market, often the second mortgagee will not pursue a foreclosure but will sue on the promissory note to obtain a "money" judgment upon which it may seek collection.

Where a husband and a wife own a property, it needs to be clarified if both parties actually signed the promissory note. Often only one of the spouses only signed the mortgage and not the promissory note and such non-signing spouse would not generally face liability for a deficiency or on the promissory note. The spouse would have signed the mortgage but not the promissory note if he or she was a title holder or even if not on title, due to the Florida homestead provisions.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.

Deciding to file for bankruptcy is a major step toward financial freedom, that is, once you explored all of your options and thoroughly examined your situation.  In getting an idea of whether filing is best for you, there are a few questions to think about that may put your circumstances into a better perspective. How [...]

Move over Dracula, there’s a new kid in town – the vampire foreclosure.
RealtyTrac, a company that compiles and publishes information about the housing market, has coined a new term.
“Vampire foreclosures,” refer to bank-owned homes  still occupied by the former owners.
The press, ever hungry for a news story that shows an America in crisis, is sucking every drop out of this one.
But I can’t help but wonder whether the vampire foreclosure isn’t such a bad thing after all.
Keep Houses Occupied, Keep Neighborhoods Vibrant
As a child of the 1970s in New York City, I vividly remember driving through The Bronx and noticing all of the boarded-up buildings.
This was the time of Fort Apache, rampant crime and a general sense of, “do not go to The Bronx ever, under any circumstances, unless you place very little value on your life.”
Things were so bad that then-mayor Ed Koch spent $300,000 on decals to cover up decaying windows.
Now, banks are leaving former owners in their homes rather than letting the properties go vacant.
Kids continue to play in the streets, and the trash gets hauled away on a weekly basis rather than piling up at the curb.  Cars drive through the neighborhood, leading to increased vigilance on the part of the residents.
Someone waters the lawn.  At night, lights come from living rooms.
Life goes on, rather than stopping and leaving a ghost town. This is the stuff of neighborhoods, and is what makes an area more attractive to new residents as opposed to new investors.
How is this a bad thing for the fabric of society?
Banks Holding Back The Tide Of Foreclosures
The flip side of the argument is that, by not releasing the properties to the sales market, banks are artificially propping up the housing market. Reduced supply, after all, drives up prices.
Mortgage experts will say that this shadow inventory is sure to cause an avalanche of properties hitting the market … someday. But what they don’t understand is that for the first time the banks have the exact same interests as homeowners.
The banks want these properties to fetch the highest possible prices, so they won’t release all of them for sale at the same time. Rather, they’ll dribble them out over time.
Homeowners want their homes to retain as much value as possible. They want the vampire tenants to keep watering the lawns and taking out the trash.  They have a vested interest in keeping the neighborhood a vibrant one, if only to protect their own resale value.
Cities Face A Shrinking Tax Base
When the homeowner loses the house in foreclosure, there’s not much motivation to keep paying the taxes. Sometimes the bank will step in to foot the bill, but that’s not always the case.
Cities and towns are disturbed that the reduction in tax revenue cuts into the bottom line. But the city can decide to foreclose on the house for unpaid taxes, or even (as one city in California is doing) take the house through eminent domain.
See also:

• Richmond’s rules: Why one California town is keeping Wall Street up at night

Either way, the cities have a way to get their money in the long-run.
Maybe Vampires Aren’t All Bad
As a nation, we’re struggling with the effects of the foreclosure debacle. Banks continue to press forward, homeowners, keep on trying to right their financial ships.
Until things are sorted out and we can all get back on our feet, perhaps the vampire foreclosure problem isn’t so much of a problem.
Perhaps, it’s an unintended way for homeowners to keep from becoming homeless and to prevent communities from disintegrating.
Time will tell how it plays out, but the upshot is that sometimes a vampire’s kiss isn’t always such a bad thing.
Image credit:  Conekt