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 WALLSTREETESQ Your Own Question

WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15814
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
16356563
Type Your Bankruptcy Law Question Here...
WALLSTREETESQ is online now
A new question is answered every 9 seconds

My California C corp owns a commercial building... purchased

Resolved Question:

My California C corp owns a commercial building... purchased for 2.3 million and financed with CIT. Haven't had funds to pay mortgage last 9 months... CIT is proceeding with foreclosure and auction is scheduled for Nov. 12. I have an attorney that is filing Chapter 11 this week to stop foreclosure and then work with CIT for mortgage modification.

Question...

Will Chapter 11 stop foreclosure.. if so for how long? One of my tenants has been told by CIT that Chapter 11 won't stop foreclosure and that her options are to leave premises within 15 days after auction or she can purchase building for 2 million.

Help...
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 4 years ago.
Filing Chapter 11, and chpater 13 and 7 will stop a foreclosure, however, filing it to avoid foreclosure is a complicated, especially if the mortgage in question is the only significant debt that creditors are trying to collect.

The automatic stay will last for as long as the case proceeds, however if rejected could be less than three months.
Customer: replied 4 years ago.
What does complicated mean? The mortgage is the only asset owned by my corporation but funds aren't available to pay back mortgage or start paying it now... we need a modification as the value has dropped about 50%. I have 2 tenants in building that are worried they will get kicked out.

Would the person who buys building in auction have to honor existing leases on building or can they get kicked out? What recourse do tenants have?
Expert:  WALLSTREETESQ replied 4 years ago.
under new foreclosure the tenants can stay as long as their leases allow, also, when you file the bankruptcy the creditors will object to you reorginzation in most cases the secured creditor will work out some type of agreement prior to the filing, the threat of a filing may work for you as much as the filing, but during the actual case, the trustee will have to see that you will have the money to pay off any other debts, and the current mortgage. It will not force the bank to modify your loan
Customer: replied 4 years ago.
So if both tenants have leases that don't expire until June of 2018, are they able to stay even if there is an auction and a new owner buys in auction?? My main concern is the tenants not getting evicted, not so much me retaining ownership of building... as building is worth about 1.3 million now and I paid 2.3 for it in 2006.
Expert:  WALLSTREETESQ replied 4 years ago.
If the tenants are residential renters they are protected if they are stores, in the building they can be evicted.

The basic rule for commercial leases in foreclosure is called "first in time, first in right." If the mortgage was recorded before the lease was signed, the general rule is that the lease is wiped out.

This allows the new owner of the property to do with it as they please -- typically sell it, lease it to the current occupants or lease it to someone else. The new owner can evict the current tenant (even if the tenant has fully complied with their lease), but typically must get court permission to do so.

Some leases (or agreements accompanying leases) contain subordination, non-disturbance and attornment clauses. Attornment means agreement to remain as a tenant with a new landlord.

Title VII of the Helping Families Act (the “Act”) is entitled “Protecting Tenants at Foreclosure” and generally requires the immediate successor-in-interest on foreclosed property to recognize the lease rights of existing tenants on the property.

The Act applies to any property where there has been a foreclosure on a “federally-related mortgage loan or on any dwelling or residential real property” after May 20. “Federally-related mortgage loan” is defined in RESPA as being limited to mortgages on property “designed principally for the occupancy of from one to four families.” Therefore, the Act’s requirements apply only to residential, and not commercial, property.

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15814
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and 3 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.