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The December 17, 2014 Third District Court of Appeals decision in Harry Beauvais case addresses important mortgage foreclosure issues. It may give reason for many Miami homeowners with mortgage foreclosure issues to re-evaluate their position. It may be that some should put more efforts towards the direction of achieving a mortgage modification under the present opportunities offered by HAMP or other programs as a possible better resolution of their mortgage foreclosure situation.
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That is, "technical" legal defensive arguments in a foreclosure case are in many cases less likely going to be what truly resolves a homeowner's mortgage foreclosure situation and saves their home.
Since 2008, certainly a lot of interesting legal issues have been raised, "won" or lost about standing, chain of assignment of notes, lost notes, mortgage-backed securities, MERS, robo-signing, bearer instruments, hearsay and business record rules of evidence, statutes of limitations, and statutes of repose. But in view of Harry Beauvais, these "wins," for many homeowners, may not be the source of what truly "saves my home" from foreclosure.
The Court certified the case to the Florida Supreme Court where the appeal from the 5th DCA's opinion in Bartram is already pending. It appears that the Court in Bartram reached the same result as Harry Beauvais did, but with a partially different reasoning.
What Did "Foreclosure Defense" in Harry Beauvais Achieve?
What did all the efforts of "foreclosure defense" in Harry Beavais ultimately achieve? The answer is probably - ultimately not much at all. The homeowner only won of a "battle" and not the "war." While the Court upheld the trial court's ruling that this particular foreclosure action, on the record and arguments before it, was barred by the statute of limitations - - of greater significance, the Court held that the mortgage note and mortgage including its lien, remain valid, and there was no quieting of title in favor of the homeowner. The homeowner is left somewhat in limbo.
The "big picture" may be that the homeowner may be spending significant amounts and efforts on "foreclosure defense," but the most that can be achieved on an statute of limitations argument is to bar filing of a second foreclosure second - which would leave the mortgage note and mortgage still valid. In the meanwhile the mortgage debt - at what is probably a rate of interest higher than what would be in a modified mortgage, monthly late fees and advanced property taxes and insurance accrue. It should be noted, that in a many cases, the lender is required to buy "forced placed insurance" which is sometimes triple or more the cost of a regular policy and does not even fully cover the homeowner's interests. Furthermore, the homeowner would not be able to sell or refinance the property without paying off, the continuing to accrue mortgage debt in full.
Furthermore, as referenced below, even if a foreclosure action could not be filed on the expired mortgage note default, the homeowner may still face a "new" foreclosure action - based on a breach of covenants in the mortgage, aside from the mortgage note, which also may provide a "new" foreclosure cause of action that is not barred by the statute of limitations.
Modification of Mortgage
Typically, a modified mortgage payment is targeted to be at about 31% of one's monthly income. The 31% would normally include the property taxes, property insurance, and association fees - which amount in some cases could be about 1/2 of the 31% figure - leaving only 1/2 of the 31% for principal and interest. For example, a case may be that, if the new payment is $1,500.00, $800.00 might be for property taxes, property insurance and association fees and $700.00 for principal and interest. With possible income tax benefits, the actual cost may even be less.
Statute of Limitations and Deceleration Issues
The Court in Harry Beuvais decision teaches much about "deceleration." The decision undercuts statute of limitations arguments to a large degree. The case only held that the statute of limitations came into play in this foreclosure action as the previously accelerated mortgage note had not been decelerated as the prior dismissal had been "without" prejudice. The Court held that under the applicable rule of Florida Rules of Civil Procedure, a dismissal "without prejudice"is not a "determination on the merits" and did not decelerate the mortgage note back to its original installment terms. That is, the statute of limitations ran on this "old" foreclosure cause of action before the lender filed the second action.
But the Court also held that a dismissal "with" prejudice is a "determination on the merits" indicative that the any alleged default or acceleration in the first foreclosure action was invalid or ineffective. That is, the statute of limitation never even began to run ab initio. Thereby, there would not be any issue of statute of limitations coming into play in the second foreclosure action. A second foreclosure action could be properly brought on a "new" installment payment, with a "new" default, with a "new" acceleration, which gives rise to a "new" cause of action, filed in a "new" action governed by a "new" five-year statute of limitations.
May Dismissal "Without Prejudice" Trigger Deceleration Indirectly ?
The Harry Beauvais decision held that a dismissal without prejudice does not, in and of itself, effect a deceleration. But the Court's decision did give reference on page ten to the notion that although the dismissal without prejudice in itself does not effect deceleration (i.e. is not an "affirmative act"), it could "trigger" deceleration in a different manner.
Here the Court referenced that in this instance that "[n]either the note or mortgage provides that dismissal without prejudice of the foreclosure action would negate the acceleration of the debt or otherwise reinstate the installment nature of the loan." Perhaps, this is an indication to lenders that with focus on this notion, a Court may be convinced that there is a contractual provision in the mortgage note or mortgage that is automatically triggered by the order of dismissal without prejudice.
"Legal Significance" of Language in a Complaint - Does it Also Apply to the Homeowner's Allegations? Judicial Estoppel
Otherwise references by the Court may also defeat the defense of the statute of limitations by the homeowner in a second foreclosure action. In footnote four, the Court stated that the lender's allegations in the first foreclosure complaint of acceleration were not simply "mere factual allegations", but "carried independent legal significance". This, or a similar notion, may also apply to the allegations made by the homeowner in his "foreclosure defense" in the first foreclosure action, i.e. that they too may not not be "mere factual allegations" but also carry "independent legal significance" or be otherwise of import.
If the factual allegations of the homeowner in the first foreclosure actions are also of "legal significance," they may support estoppel or otherwise defeat efforts by the homeowner in the second foreclosure action to raise a statute of limitations defense. That is, the homeowner may have alleged facts that there had not been a valid or effective default and acceleration of the mortgage note prior to the first foreclosure action. If there had not been a valid or effective default and acceleration in the first foreclosure action, the statute of limitations would not have even begun to run in the first instance and could not have run before the second foreclosure action.
It is noted that the doctrine of "judicial estoppel" generally prohibits, a litigant from taking inconsistent positions in different courts.
Foreclosure Cause of Action on Other Mortgage Covenants
One should note that Florida case law and commentators review that there are many covenants by the homeowner in the mortgage itself - aside from the covenant to pay the mortgage note installment payments. Examples of such covenants are to protect the collateral by keeping it insured or paying the property taxes. With the mortgage and its lien continuing to be valid - even if a foreclosure action on the "old" mortgage note cause of action is barred - for a very extended period of time pursuant to its statute of repose, there would in a typical case, be breaches of these separate mortgage covenants giving rise to "new" foreclosure causes of action upon which a "new" foreclosure action may be filed with "new" statute of limitations.
Conclusion
In summary, the Harry Beuvais case, although being a cold dose of reality, is a blessing in disguise to homeowners to focus their efforts on what will truly "save my home." The opportunities to achieve a modification of a mortgage are presently probably as good as they ever will be and may, if not seized now, not be available later.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
As the holiday season gets fully into swing here in midtown Manhattan, we at Shenwick & Associates wanted to take this time to wish you a happy, safe and warm holiday season and a very happy and healthy 2015. We also wanted to thank you for your friendship, your business, your referrals and your trust in us. Personal and business bankruptcies and workouts are keeping us busy as 2014 draws to a close. We're here for you now and in the upcoming year, and we look forward to working with you.
We also wanted to update you on the fascinating case of Santiago-Monteverde v. Pereira (In re Santiago-Monteverde), which we've previously discussed here. When we last wrote about this case, the Second Circuit Court of Appeals had certified the following question to the New York State Court of Appeals:
Whether a debtor‐tenant possesses a property interest in the protected value of her rent‐stabilized lease that may be exempted from her bankruptcy estate pursuant to New York State Debtor and Creditor Law Section 282(2) as a "local public assistance benefit"?
In a decision issued on November 20th, the New York State Court of Appeals held in a 5-2 vote to answer the question in the affirmative. Writing for the majority, Judge Abdus-Salaam held that "[t]he rent-stabilization program has all of the characteristics of a local public assistance benefit" and "[w]hile the rent-stabilization laws do not provide a benefit paid for by the government, they do provide a benefit conferred by the government through regulation aimed at a population that the government deems in need of protection."
The 2nd Circuit Court of Appeals still needs to issue its decision in the next few months, but this ruling finally settles that rent–stabilized and rent–controlled tenants in New York State no longer have to fear losing their leases when considering a Chapter 7 bankruptcy. Any persons having questions about personal bankruptcy or the Santiago-Monteverde v. Pereira (In re Santiago-Monteverde) case should call Jim Shenwick.
Happy holidays and happy 2015 from Shenwick & Associates!
The issuance of the Third District Court of Appeals recent decision in Deutsche Bank Trust Company Americas, etc. v. Harry Beauvais, et al., Case No. 3D14-575, may be an appropriate time to review what actions a Miami homeowner that seeks to save their home from foreclosure should consider. If upheld, the Court's decision may indicate that some notions of "foreclosure defense" may be based on assumption that now appear false. A homeowner may be better served on directing his or her efforts towards the modification of their mortgage.
Present Modification Opportunities
If a homeowner seeks to save their home from foreclosure, solely focusing on "delaying foreclosure" is not likely to solve their proble. The federal government, the mortgage lenders, and the general economic climate, present good opportunities to modify your mortgage that may not exist in years to come.
Costs
For many, the after-tax benefit cost of paying a modified mortgage payment may not be significantly more than paying for a "foreclosure defense".
Possible Rising Real Estate Price and Interest Rates
A homeowner may be making a error in not taking the opportunity to modify their mortgage based on present real estate values and interest rates. Real estate prices may be rising, causing the new modification payment to be higher.
If a person has a first and second mortgage, a rise is in real estate prices would not help. If their second mortgage is wholly "underwater", it maybe avoidable in bankruptcy. If real estate prices go up enough that the second mortgage is even $1 "above water," it could not be avoided at all.
"Winning" Foreclosure
There may not exist much of a thing as "winning" a foreclosure case. For many, simply getting a foreclosure case dismissed, "with" or "without" prejudice is not much of a "win". In most instances, a new foreclosure action may be filed on a new default.
For example, "winning" a foreclosure case on a rule of "hearsay" or other rule of evidence, is not much of a "win" - it only means that the lender did not establish a sufficient evidentiary record - this time around.
Statute of Limitations
Even if the statute of limitations has run to bring a foreclosure action on the mortgage note, the mortgage note remains valid and the mortgage and its liens remains valid (until the mortgage statute of repose runs).
"Lost Mortgage Note"
Getting your foreclosure case dismissed on the grounds that the mortgage note is "lost" or the plaintiff cannot prove standing may only effects a dismissal of the foreclosure case. Another foreclosure could be filed. The mortgage note and mortgage lien remains valid.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
The issuance by the Third District Court of Appeals in Miami of the recent decision in Deutsche Bank Trust Company Americas, etc. v. Harry Beauvais, et al., Case No. 3D14-575, may be an appropriate time to review what actions a Miami homeowner that seeks to save their home from foreclosure should consider. If upheld, the Court's decision may indicate that some notions of "foreclosure defense" may be based on assumptions that are contrary to what the Court's appears to have ruled. A homeowner seeking to save their home from foreclosure may be better served on directing his or her efforts towards the modification of their mortgage instead of "winning" a foreclosure case. For example, it appears that in most cases, arguments regarding statute of limitatations issues will not result in a "quiet title" judgment.
Present Modification Opportunities
If a homeowner seeks to save their home from foreclosure, focusing primarily on "foreclosure defense" is not likely to be the solution. The federal government, the mortgage lenders, and the general economic climate, present good opportunities to modify your mortgage that may not exist in years to come. For many, the after-tax benefit cost of paying a modified mortgage payment may not be significantly more than paying for a "foreclosure defense".
Possible Rising Real Estate Price and Interest Rates
A homeowner may be making a error in not taking the opportunity to modify their mortgage based on present real estate values and interest rates. Real estate prices and interest rates may be rise, causing the new modification payment to be higher the longer a person waits to pursue a modification.
Also, if a person who has a first and second mortgage, it would be better to address their situation before there is a rise is in real estate prices. If the second mortgage is wholly "underwater", it may be avoidable in a bankruptcy case. If real estate prices go up enough that the second mortgage is not wholly "underwater," the second mortgage could not be avoided at all.
"Winning" Foreclosure
There may not exist much of a thing as "winning" a foreclosure case. For many, simply getting a foreclosure case dismissed, "with" or "without" prejudice may not be much of a "win". In most instances, a new foreclosure action may be filed on a new default almost immediately.
For example, "winning" a foreclosure case by getting the case dismissed on a on rule of evidence, is not much of a "win" - it only means that the lender did not establish a sufficient evidentiary record at the trial. In most cases, the lender can simply file another case.
Statute of Limitations
Even if the statute of limitations has run to bring a foreclosure action on the mortgage note, generally the mortgage note remains valid and the mortgage and its liens remains valid. The continued validity of the mortgage and its lien is governed by the time period set forth in the statute of repose.
"Lost Mortgage Note"
Getting your foreclosure case dismissed on the grounds that the mortgage note is "lost" or the plaintiff cannot prove standing only effects a dismissal of the foreclosure case. In most cases, this simply buys time until the lender refills another case. The mortgage note and mortgage lien remains valid.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
May a second foreclosure action be brought after a first foreclosure action was dismissed and the statute of limitations has expired on the cause of action upon which the first action was brought? Apparently, based on the Florida Third District Court of Appeal's recent decision in Deutsche Bank Trust Company Americas, etc. v. Harry Beauvais, et al., Case No. 3D14-575, the key is something "new."
"New" Things
A "new" second foreclosure action may be brought upon a
- a "new" mortgage note installment payment
- upon which there is a "new" default and optional acceleration
- upon which a "new" cause of action arises
- brought before its "new" five year statute of limitations periods expires
Deceleration
After acceleration, "new" mortgage note installment payment can come due only if the mortgage note is "decelerated." If the first foreclosure case was dismissed "with" prejudice, there is an indication that the default and acceleration never happened in the first instance (or the dismissal otherwise decelerates the mortgage note).
The Court makes reference that deceleration may be effected by an "affirmative act" by the lender or holder of the note. Such affirmative acts include contractual reinstatement or modification by the parties. The decision make reference to the notion that deceleration make also be effected by revocation, which may or may not require a contractual provision in the mortgage note allowing such.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
May a second foreclosure action be brought after the first foreclosure action has been dismissed - "with" or "without" prejudice? How does the foreclosure statute of limitations come into play? The Florida Third District Court of Appeal's recent decision in Deutsche Bank Trust Company Americas, etc. v. Harry Beauvais, et al., Case No. 3D14-575 gives guidance. The following may be how the holdings of this decision would generally seem to direct.
Generally
In general, a foreclosure action may be had on a foreclosure cause of action on which the foreclosure statute of limitations has not expired. A foreclosure cause of action based on a mortgage installment note accrues after default and acceleration. The five year statute of limitations to bring a foreclosure action begins to run upon such accrual.
Prior Dismissal With Prejudice - Second Action Permitted
If the first foreclosure action had been dismissed "with" prejudice, a second foreclosure action may be brought action with "new" items.
It would appear, generally, that no second foreclosure action, after the first was dismissed with prejudice, could ever be possibly be barred by the foreclosure statute of limitations as it never began to run in the first instance. The dismissal "with" prejudice was a "determination on the merits" and indicates that the previously asserted default and acceleration was invalid or ineffective i.e. it "never happened."
The second foreclosure action would be based upon these "new" items: 1. "new" mortgage note installment payments coming due, 2. a "new" default and acceleration made, 3. which creates a "new" foreclosure cause of action, 4. commencing a "new" statute of limitations period, 5. to bring a "new" foreclosure action.
Prior Dismissal Without Prejudice - Generally Can Bring Second Action
if Brought within Statute of Limitations that Previously Commenced
If the first foreclosure action had been dismissed "without" prejudice, nothing "new" is required as the mortgage note remains in default and accelerated and the foreclosure cause of action is still in existence. In fact, as the note has already been accelerated, no new payments, default, acceleration, and cause of action can exist. The second action must be filed before the statute of limitations expires.
Deceleration - Can or Has the Already Commenced Statute of Limitations be Stopped?
The Court makes reference that deceleration of an accelerated mortgage installment note may be effected by an "affirmative act" by the lender or holder of the mortgage note. The affirmative acts referenced include contractual reinstatement or modification by the parties. The decision makes some reference to the notion that deceleration make also be effected by revocation, which may or may not require the existence of a contractual provision in the mortgage note allowing such. There is also a reference to the concept that dismissal, even "without" prejudice could automatically trigger a deceleration if provided for by the contract.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
A reaffirmation agreement is a new contract between a creditor and the debtor(s) in a Chapter 7 Bankruptcy. Simply put, it is a promise to pay the debt. The legal document outlines the terms in which the filing debtor(s) agrees to remain liable or legally responsible for a debt that would otherwise be dischargeable in […]
The post Bankruptcy Lawyers Michigan: What is the Purpose of a Reaffirmation Agreement in Chapter 7 Bankruptcy? appeared first on Acclaim Legal Services, PLLC.
Casino and entertainment company Caesars Entertainment Corp will be filing for bankruptcy next month in an attempt to cut its growing debt.
Caesars signed what is known as a lock-up agreement with its bondholders on Friday, consenting to place its greatest unit, Caesars Entertainment Operating Co (CEOC), into Chapter 11 bankruptcy in mid-January—by January 15 at the latest.
The proposed filing for Chapter 11 bankruptcy protection will decrease Caesar’s current debt of $18.4 billion to roughly $8.6 billion, according to the company.
On Monday, Caesars Entertainment Corp announced it will acquire affiliate Caesars Acquisition Co in an all-stock agreement. This procurement will allow the company to restructure its $18.4 billion debt without seeking outside financing.
Other portions of the Las-Vegas based company, Caesars Entertainment, Caesars Entertainment Resort Properties and Caesars Growth Partners, will not be included in the bankruptcy process, according to CEOC.
One term of the lock-up agreement is that a particular percentage of first-lien bondholders must sign the contract before Caesars is prepared to file bankruptcy papers. Caesars must receive approval from other senior creditors in order to meet voting requirements to approve a bankruptcy plan before a judge can approve
CEOC plans to divide its U.S.-based enterprises into two separate companies: an operating firm and a publicly traded real estate investment trust that will maintain a recently formed property company.
By splitting the aforementioned assets, CEOC will cut its annual interest expense by 75 percent.
Caesars was weighed down with debt after the company was made private for $30.7 by Apollo Global Management LLC and TPG Capital in 2008. The deal occurred before the credit crisis and part of a buyout; Caesar’s has lost money every year since 2009.
Friday’s closing price for Caesars Entertainment was $1.22 billion, or $8.96 per share.
Still Struggling with honest debts you can’t pay? Are you struggling with honest debts you can’t pay? Why not plan for something better! I’d like to get together with you in person. In January. I’d like to go over your complete financial picture, and see if there’s an easy fix to your debt problems. […]The post New Years Resolution? Debt-free by Spring! by Robert Weed appeared first on Robert Weed.
I had the pleasure of attending the Nebraska Association of Trial Attorneys seminar held at the Nebraska College of Law a week ago, and it got me thinking about how much trial attorneys need to understand about the bankruptcy process. In a nutshell, here are seven things every trial attorney should understand about bankruptcy.
1. Injury Claims Must Be Listed as Asset on Bankruptcy Schedules. A debtor must list all his or her property in the bankruptcy schedules. The bankruptcy estate includes every interest of the debtor including causes of action owned by the debtor. This is especially critical in Chapter 7 cases where all of the property of the debtor is temporarily vested in the Chapter 7 Trustee until the Trustee reviews the asset schedules and interviews the debtor. If the injury claim is not listed as an asset, the claim remains in the possession of the bankruptcy trustee, and that means the debtor does not have standing to proceed with the injury claim after the bankruptcy case is completed. Armed with that information, counsel for the defense may seek a motion to dismiss the injury claim if it was not listed in the bankruptcy schedules since the debtor lacks standing and such a dismissal, of course, may then cause the unpleasant topic of an expired statute of limitations on the injury claim to arise.
Do you know if your PI client filed bankruptcy? Is that question on your client intake form? Is that question asked again prior to trial? If the claim was listed, how was it listed? Have you reviewed a copy of the bankruptcy schedules? Have you checked the federal PACER computer system for possible bankruptcy case filings? How will you respond to a client whose case is dismissed after the statute of limitations has expired when they say “I thought you knew that I filed bankruptcy because of all those medical bills I was facing?”
2. Personal Injury Claims are Exempt under Nebraska Law (but it may constitute Disposable Income). Nebraska Statute 25-1563.02 provides that “all proceeds and benefits, including interest earned thereon, which are paid either in a lump sum or are accruing under any structured settlement providing periodic payments, which lump-sum settlement or periodic payments are made as compensation for personal injuries or death, shall be exempt from attachment, garnishment, or other legal or equitable process and from all claims of creditors of the beneficiary or the beneficiary's surviving dependents unless a written assignment to the contrary has been obtained by the claimant.” Some Chapter 7 Trustees questioned whether this exemption protected compensation awarded for lost wages and medical expenses, however, the Nebraska Bankruptcy court ruled that the exemption expressly protects all proceeds and benefits including lost wages and medical expenses. In re Rhea, BK 04-42427.
Although personal injury proceeds are exempt under Nebraska law, when a substantial settlement is received in the middle of a Chapter 13 payment plan this will open a discussion of whether the debtor is now able to pay a greater portion of their debts. The Chapter 13 Trustee will need to be notified of the settlement and the trustee may inquire as to how the settlement will be spent. The trustee cannot compel a turnover of the settlement, but they can seek to increase the bankruptcy payment or dismiss the case if it is apparent that not all of the funds received will be necessary to pay future medical bills or basic living expenses.
3. Motion for Relief from bankruptcy stay required to allow litigation. The filing of a bankruptcy petition causes a federal injunction to automatically come into existence that stays all collection efforts against the debtor, and this injunctive relief is commonly referred to as the “Automatic Stay.” In a cause of action involving claims and counterclaims it may be necessary to obtain authority from the bankruptcy court to allow the personal injury claim to proceed. Bankruptcy courts will commonly grant limited relief from the bankruptcy stay to allow the parties to an injury lawsuit to proceed with litigation under the provision that any settlement of the case be subject to future court approval.
4. Chapter 7 is Fast. Chapter 13 is Slow. Which do you need? Chapter 7 cases are completed in approximately 90 days whereas a Chapter 13 case is open for three to five years. If a settlement of a claim is expected in the near future, most debtors are better off filing a Chapter 7 case so that they can be free of debt before they obtain possession of a large settlement. A debtor who receives a large settlement before or during a Chapter 7 case may find that they are no longer eligible for the quick discharge if it is apparent that they have the ability to pay back some of their debt. Chapter 13 offers debtors the benefit of time. It gives them the ability to reject low-ball settlement offers on their injury claim since they have the ability to hold off creditors while the case is pending. Chapter 13 gives the debtor time to litigate their injury claim and to maximize their net recovery. In addition, Chapter 13 offers flexibility in that a debtor may offer a minimal monthly payment to creditors at the beginning of the case while they are still healing from injuries or going through physical therapy and then increase the bankruptcy payment in the later years of the bankruptcy plan.
5. Motion to Employ Counsel Required in Chapter 13 Cases. In order to be able to be paid compensation for representing a debtor in a personal injury case it is necessary to request approval of the bankruptcy court to employ counsel. Those lawyers who provide legal services to a debtor without seeking court approval risk having their request for compensation denied. If you volunteer services there is no right to demand compensation. Bankruptcy Code Section 327 provides that a debtor may, with the Court’s approval, employ one or more attorneys as long as they do not hold an interest adverse to the bankruptcy estate. An affidavit of the personal injury attorney stating that they have no adverse interest to the estate should accompany the motion along with a copy of the legal service agreement.
6. Reaffirmation of Legal Services Agreement in Chapter 7. What is the effect on a legal retainer agreement that is not reaffirmed in a Chapter 7 proceeding? The simple answer is that the agreement is discharged and the compensation to be paid for services rendered to a debtor after the Chapter 7 case is filed is no longer determined by the agreement. For this reason it is essential that the personal injury attorney either execute a reaffirmation of the original retainer agreement or sign a new retainer agreement following the completion of the Chapter 7 case.
7. Motion to Approve Settlement: A settlement that is reached during a Chapter 13 case must be approved by the bankruptcy court. The claim is property of the bankruptcy estate, and a debtor is incapable to transferring or converting estate property without prior court approval. In addition, the Chapter 13 trustee will be interested in seeing a copy of the settlement and a statement of the future medical or income needs of the debtor to determine if the debtor’s bankruptcy payment should be increased.
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