How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TJ, Esq. Your Own Question

TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9610
Experience:  Licensed to Practice Law
Type Your Bankruptcy Law Question Here...
TJ, Esq. is online now
A new question is answered every 9 seconds

In Aug 96, XXXXX XXXXX contracted to purchase a commercial building

Resolved Question:

In Aug 96, XXXXX XXXXX contracted to purchase a commercial building for the purpose of leasing it out as multiple apartments and offices. Then he solicited partners to form an LLC to raise the money for the down payment. I am one of those partners. Josh then closed on the purchase and the building was titled in his name with an owner financed mortgage also in his name. He then conveyed the building to the LLC via quit claim deed but the mortage remains his personal obligation. The LLC established a Bank line of credit and both Josh and I guaranteed it. The LOC is maxed. Josh provided me with a personal written guarantee that he will be personally liable for my guaratee to the bank. Josh is now considering personal Ch 7 bankruptcy. Question: What happens to the building, ,which the LLC owns, and the mortgage Josh is solely responsible for? What do I need to do to enforce Josh's guarantee to me when the bank attempts to collect from me on the LOC after Josh's bankruptcy filing?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 5 years ago.

Hello and thank you for allowing me the opportunity to assist you.

Question: “Question: What happens to the building, ,which the LLC owns, and the mortgage Josh is solely responsible for? What do I need to do to enforce Josh's guarantee to me when the bank attempts to collect from me on the LOC after Josh's bankruptcy filing?”

Answer: Assuming the mortgage is included in Josh’s bankruptcy (it doesn’t have to be), then the lender will likely foreclose on the property. It doesn’t matter that the LLC owns the property since the lender’s security interest is still valid. Unfortunately, there is nothing you can do to collect from Josh if he includes your debt in his bankruptcy. It would be illegal to attempt to collect once the bankruptcy is filed (even a lawsuit is precluded). And if your debt is included in the bankruptcy, then a lawsuit would be precluded after Josh is discharged since the bankruptcy discharge acts as a permanent injunction on collecting the debt. I wish I had better news.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

Although my answer was unfavorable, please understand that my goal was to provide you with honest information. With that in mind, I hope that you found my answer useful. If so, then please remember to click the green accept button so that I will receive credit and compensation for my time. Positive feedback is always appreciated as well. Thank you and good luck!

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

 

Customer: replied 5 years ago.
I gather from your response that Josh can exclude any debt he wishes from the bankruptcy?
Expert:  TJ, Esq. replied 5 years ago.

Question: “I gather from your response that Josh can exclude any debt he wishes from the bankruptcy?”

Answer: To an extent. Josh may repay any debt he wishes. However, he may only sign a “reaffirmation agreement,” which keeps him legally liable, if doing so is in his best interests and is not overly burdensome. People generally reaffirm their debts when they want to keep the collateral that secures the debt. For example, if a debtor wants to keep his car, he may reaffirm his car loan. Similarly, Josh may want to reaffirm the mortgage if he wants to keep the property. As stated, however, keeping the debt cannot be overly burdensome since that affects the “fresh start” that bankruptcy is designed to provide.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

Customer: replied 5 years ago.
Thank you for your cogent and timely responses. One last question. When the building is sold at foreclosure, what is the order of disbursements?
Expert:  TJ, Esq. replied 5 years ago.

Hi again. Glad to help.

Question: “When the building is sold at foreclosure, what is the order of disbursements?”

Answer: The lender with the first mortgage will be paid first. If there is a second mortgage, that will be paid second, and if there is a third…you get the picture. After the lienholders are paid, and if there are any funds left over, then the money will be disbursed to the foreclosed owners of the property (i.e. the LLC).

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9610
Experience: Licensed to Practice Law
TJ, Esq. and 2 other Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.