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Brent Blanchard
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1905
Experience:  Twelve years experience in all aspects of debtor & creditor BK.
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I am a Just answer Neurology expert and I have been wrestling

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I am a Just answer Neurology expert and I have been wrestling with bankruptcy for 18 months. I was diagnosed with prostate cancer and had radical surgery and complications last year. I am in neurology disability for severe income drop and but I am still working part time. I keep on getting different answers from my BR attorney, and my cpa, who is also a attorney. Both are very well known and respected experts in Knoxville.

In summary, we all belive due to the amount of debt over 1.8 million including business and upside down mortgage that Personel chapter 11.

Exemptions 17 year old and 2 adults. 70,000.

Assets: home 0 Cars 20,000 personel belonings, furniture, etc 30,000, cash 5000

Liabilities Business--900,000. Personel Home 1st 1,000,000 second 700,000

Car loans, credit cards, etc 70,000.

My income with disability paymnents 25,000/month. 22,000 tax free disability

Leasing/purchase new house no equity. fully paid in 5 years 8,000/month. Many medical bills,kids in college and ill. disposable income probably about 1000, after credit card ards etc.

Those are the facts, here are the questions I am confused about.


Chapter 11

CPA said assets less than exeptions. He has had a lot of experience with 11. In personel 11 after 60-90 days fresh start similar to chapter 7. No clain by debters to future increse in earnings, inheritance. He said that if I win the lottery after the 90 day discharge it is mine to keep. Key: exeptions more than net worth. After resonable expenses and low net worth.. Total Discharge like 7

BR attorney; 11 has payment plan approved by creditors. Can increase or decrease plan based on future income, inheritance, etc. No way to discharge like 7.

Bank just forclosed on old house, wrote off 2nd mortgage as loss/debt> 700,000. Does this mean I am free or can they send to collection agency? Will I get a 1099 for the 700,000. Still owe 1,000,000 on 1st. Not sure if house sold or what difficency is.

When I file 11, is there any reason to keep the credit card debt? I will lose all credit anyway. My score is now 454. Years ago 780. Just include it with debtors? I am 61, will probably get no future credit anyway.

My car is financed through same bank Almost paid off. They clain that because mortgage is delinquent, It was just foreclosed friday, that they are entitled to car. I have not missed any payments. I have not assigned the car to them as collateral, bugt they still have the title. If I trade, can the dealer force them to give up title when paid. They have no judgements against me. They have sent the repo people after it, but I have it locked in a friend's garage. Will chapter 11 stop the repo people, or can they still go after it while in chapter 11.?

My middle 19 y/o son has several small federal college loans, freshman about 6000. I have consigned for them. Trust fund and I have paid for the other 22,000. Will Chapter 11 prevent my ability to cosign for him on the future federal loans.


I am still confused about chapter 11 discharge as fresh start. My CPA lawyer has done over 10 for millions, 3 last year. 50,000- personel and corp. However how he explains it does not seem to be what is described in th eLaw.????

My Bankruptcy attorney (certified BR) Has only done a few 11. But his story about the 11 seems to match the Law.

The Bankruptcy attorney and the cPA attorney are meeting this week to work out a plan to conclude the financial issues and move on in 11. The bank will not cooperate at all with anything and will probably not agree to a plan in 11. However, my attorney is trying a crampdown with another creditor.

No hurry for answer. Tomorrow oK.

Complex question. Please a cite federal code if you can.

I understand complex question. I need high detailed answer to understand what the possibilities are. Expect a Bonus for detailed clear answer. I am looking for that fresh start.

Thanks, XXXXX XXXXX Scariano, jr. MD
Expect a Bonus for detailed
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Brent Blanchard replied 3 years ago.
Thank you for your question.

Sorry to hear about the misfortunes that prompt it, though.

Your BK attorney is more correct. There will be a "creditor's committee", and if there is any surplus income to fuel a Plan, it will run more like a Chapter 13 than a Chapter 7. CPA is looking at the exemption vs. asset values, attorney is looking at income.

"Bank just forclosed on old house, wrote off 2nd mortgage as loss/debt> 700,000. Does this mean I am free or can they send to collection agency?"

Yes. Plus, if it's not your primary home, the debt forgiveness is taxable. Tennessee does allow deficiency lawsuits after foreclosure, so watch out. The period of limitations is two years after the sale. The borrower has a right to challenge the reasonableness of the price obtained, but that requires that he or she carry the burden of proof (civil standard preponderance of the evidence).

Changes in income do warrant modifications of the Plan. Though the law appears to NOT make inheritance or other windfalls more than 180 days after filing subject to capture for creditors, there is a split of authority among the circuits and the trend is to grab anything that comes in during the life of the Plan.

Keeping credit card debt (re-affirming) is a personal decision. Usually it's to preserve checking accounts with the same local bank that issued the national credit card (affinity marketing, they call it). However, that's still no guarantee that the creditor will treat the Debtor better, and the very fact of declaring BK is often an act of "default" on the credit card agreement (look for "global default" rules that impose higher interest rate, etc. if the customer is late on ANY payment to ANYONE or declares BK) often result in the credit card account being closed anyway. Some people are better off with a secured credit card or PayPal debit card during/after BK.

The CPA may also be grafting in business Chapter 11 experiences where the business shut down. However, there can be a discharge of what remains unpaid in a consumer Chapter 11 if the numbers all work out well.

The key is what details are in the confirmed Plan. There usually is a committee of largest creditors, and they do get input but not veto power over the Plan. The judge has the final say. But since a confirmed Plan may (depending on the income and other numbers) only partially pay the creditors, guess what that does to what remains unpaid? What is not re-affirmed gets discharged.

On the car repossession, yes, there are often rights of "offset" between accounts with the same bank. Filing a BK case does bring everything to a halt, but a creditor can ask for "relief from the automatic stay" to start or resume foreclosure or repossession. If the Plan calls for all arrears on a debt to be paid in full, the Plan can often be used to protect collateral from repossession for as long as the Plan and debt payments remain current.

Thank you.

BAB.
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1905
Experience: Twelve years experience in all aspects of debtor & creditor BK.
Brent Blanchard and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.

So when we file 11. If my assets are less my exemptions . I get total discharge as in & and a fresh start. Does this depend on disposable income? Does disposable income matter?

 

If my assets are greater than my exemptions, is 11 more like a 13 in which there is a payment plan. Does this vary based on disposable income?

 

Once I file chapter 11, does the bank automatically call of the repo guy, or can he still pull it off the street? If he pulls it, how doe I get it back. Through the court? That would take months.

 

Thanks for your help. Bonus after this followup.

 

DR S

 

Expert:  Brent Blanchard replied 3 years ago.
Thank you for your follow-up.

Assets less than exemptions really only affects what you get to keep. That's what the exemption scheme is all about. Any individual asset over the applicable threshold, it either gets surrendered and sold and the debtor gets the exemption dollars back (extremely rare), or the debtor takes out a loan against it for the excess dollars and turns the loan funds over to the BK estate for the benefit of the creditors.

All of that really doesn't affect the discharge. The income and the Plan determine that.

The law says that the instant a BK case is filed, there is an "automatic stay" which everyone in the world is supposed to obey. Of course, as a practical matter, any creditor can call off a repo man only after receiving "actual" notice of the filing. We often do that with a phone call with the case number.

To get a vehicle back out of imminent repossession through BK, there has to be a viable plan to cure all of the pre-petition arrears and the debtor must re-start monthly debt payments and continue as required under the loan contract.

The automatic stay is legally the same as a temporary restraining order. It's "freeze!" Everything stays where it is, except that a "turnover order" requiring any post-petition repossession to be reversed. However, it won't work for a pre-petition repossession.

Thank you.

BAB.
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1905
Experience: Twelve years experience in all aspects of debtor & creditor BK.
Brent Blanchard and 2 other Bankruptcy Law Specialists are ready to help you

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