Bankruptcy Questions and Answers
Below are actual bankruptcy questions submitted to me through the internet on Avvo.com with my answers. Please note that many of the answers may be generic since these are posted by users throughout the country, so they do not necessarily pertain to California law.
Bankruptcy discharged in 2006: I filed bankruptcy in 2005. I had a motorcycle loan from TD Bank for $16000. The loan was included in the bankruptcy. I still have the motorcycle, and TD Bank has never contacted me to pick the motorcycle up. How long do they have before ownership becomes mine and I can request the title to the motorcycle?
Mark's answer: Ownership becomes yours once you pay off the balance owed on the motorcycle.
Does a student loan disbursement count as income in chapter 7 means test? This could make the difference on whether I pass.: Please let me know.
Mark's answer:
I can't see how under any circumstances a loan can be considered
income. It's definitely not considered so here in the Central District
of California. If a loan is income, what is it when it's paid back?
i filed for Chapter 7 then coverted to 13 and now I want to convert back to 7. Is it ok?: I filed for Chapter 7 and then converted to Chapter 13 thinking I would strip the 2nd mortgage on my house but the appriasal report came in too high. Can I convert back to 7? A no-asset report was issued in the 7.
Mark's answer: You must file a motion to reconvert and it must go out on notice to all creditors, the Chapter 13 Trustee and the US Trustee's Office. As the other post indicated they may dismiss your case, but unless the court finds it would be bad faith or unfair, it should grant your motion, assuming it is presented properly. Mark J. Markus, Attorney at Law http://www.bklaw.com/
What recourse do I have if a creditor files a claim on a chapter 13 that was discharged 4 years ago in chapter 7 no asset?: Chapter 7 was in Erie PA and was discharged as a no asset. The property from the mortgage was decreed by divorce to my ex-wife so between the 2, I have no legal right or liability for the property. Citi-financial filed a claim on this discharged mortgage in my current chapter 13 in St Louis which was filed because of a foreclosure attempt by Flagstar Bank who refused to work with me when I was temporarily reduced on income for 9 months because of a workplace injury. Citi-financial will lose money on a unsecured loan which is why they filed a fraudulent claim on a discharged debt. There was also one more fraudulent claim from the chapter 7 on the chapter 13, unsecured, by Palasedes for Chrysler financial.
Mark's answer:
In addition to the prior answers given, I would point out that if
your facts are correct and this debt was in fact previously discharged,
then by filing a claim in your chapter 13, this creditor is violating
the post discharge injunction of 11 USC 524 and you can seek contempt of
court sanctions against them.
I agree with the prior post that suggested you send a threatening letter
to them pointing all of this out. If they refuse to withdraw their
claim, file an objection to the claim, and then file an order to show
cause re: contempt in the bankruptcy case that the discharge was entered
in. Best to have an attorney handle all of this, of course.
If I own a corporation and file personal chapter 7, what will the consequences be? Are my corp assets at risk?: Please explain how corporate property and the value of the company itself will be treated. I understand that there are exemptions out there to protect a certain amount of property. will I have to "exempt" my corporate property?
Mark's answer:
Your interest in the corporation (i.e. the shares you hold) would be
an asset of your personal bankruptcy case and must be valued and, if
possible, exempted. The shares you own in the corporation become
property of the bankruptcy trustee unless and until the Trustee decides
not to administer them (which, in turn, depends on their value and the
amount you're able to exempt).
Valuation of corporate shares is beyond the scope of this service, but
basically it's the value you could sell the business for, after paying
liabilities of the business, divided by your percentage of the shares.
In California you can exempt up to approximately $22,000 in any assets,
so you could use that to protect your corporate interest, assuming you
don't have other assets that need to be exempted.
How to Help Family Member in Bankruptcy: We have a family member in Florida who recently filed for bankruptcy. It's probably a Chapter 7, but we're not sure. They want to keep a newer Honda car that is still financed, but they have to turn it over and keep an older Nissan with many more miles on it. Is there a way to help them by making their payments on the Honda, or is that prohibited by the bankruptcy trustee? Do we have to wait until their bankruptcy case closes before helping them financially? Thanks.
Mark's answer: You can assist them financially without any problem. The creditor secured by the vehicle doesn't care where it gets its money from. However, if they are reaffirming the debt instead of simply making voluntary payments, they need to be aware of the ramifications if you (or they) default. They need to run this by their attorney and make sure they are fully advised.
Chapter 13, 2nd Lien Elimination: Hello: If I am able to eliminate my 2nd mortgage and credit card debt through chapter 13, then what payment plan would I have? If my second is completely gone, what /whom would I paying the payments for for 5 years? If you can provide clarity, that would be great. And any attorneys in Milpitas area? Thanks.
Mark's answer:
That depends on how much your monthly payment is (which is based on
your income and expenses). The 2nd mortgage that is "avoided" in the
bankruptcy becomes an unsecured claim so it would share in the payments
made to your unsecured creditor class.
They payments in any Chapter 13 case are made to the Trustee, who
disburses to your creditors in accordance with your plan and applicable
laws.
My family is filing ch 7 bankruptcy and we have two properties owned jointly. How do I protect my interest in these properties?: Real Estate property owned jointly.
Mark's answer: There isn't enough information to answer your question. When you say your "family", what do you mean? Your mom and dad? Your wife? Families don't file bankruptcies; individuals do. If you're saying that you are a joint tenant on real estate that is going to be included in a Chapter 7 case filed by a joint tenant, there isn't much you can do to protect your interest. If there is equity in the property above any available exemptions, then the Trustee can sell the property, including your interest. You would, of course, get paid the value of your interest, but there's no way to prevent the sale. The key is the equity in the property and what exemptions are available to the party (parties) filing the bankruptcy, which is determined by what state they lived in for the 2 years prior to filing the case.
What recourse do I have if a creditor files a claim on a chapter 13 that was discharged 4 years ago in chapter 7 no asset?: Chapter 7 was in Erie PA and was discharged as a no asset. The property from the mortgage was decreed by divorce to my ex-wife so between the 2, I have no legal right or liability for the property. Citi-financial filed a claim on this discharged mortgage in my current chapter 13 in St Louis which was filed because of a foreclosure attempt by Flagstar Bank who refused to work with me when I was temporarily reduced on income for 9 months because of a workplace injury. Citi-financial will lose money on a unsecured loan which is why they filed a fraudulent claim on a discharged debt. There was also one more fraudulent claim from the chapter 7 on the chapter 13, unsecured, by Palasedes for Chrysler financial.
Mark's answer: In addition to the prior answers given, I would point out that if your facts are correct and this debt was in fact previously discharged, then by filing a claim in your chapter 13, this creditor is violating the post discharge injunction of 11 USC 524 and you can seek contempt of court sanctions against them. I agree with the prior post that suggested you send a threatening letter to them pointing all of this out. If they refuse to withdraw their claim, file an objection to the claim, and then file an order to show cause re: contempt in the bankruptcy case that the discharge was entered in. Best to have an attorney handle all of this, of course