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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15694
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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If I just have mortgage debt am I allowed to file Chapter 13

Customer Question

If I just have mortgage debt am I allowed to file Chapter 13 bankruptcy?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 1 year ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

Mortgage debt alone will allow you to file a chapter 13 bankruptcy,

WALLSTREETESQ :

A chapter 13 is common for home owners and investors with property, so that would not be an issue.

Customer:

OK, b/c in our last discussion you said



WALLSTREETESQ says:

10:16 AM



If you have no other debt a chapter 13 would not be approved,


Customer:

which is why I asked that question

WALLSTREETESQ :

What I stated prior is that if you do not owe anything to the mortgage lender then their would be no payment plan for creditors to pay,

WALLSTREETESQ :

A mortgage balance if owed can be put into the bankruptcy, but if you do not owe anything, then the bankruptcy is not going to happen.

Expert:  WALLSTREETESQ replied 1 year ago.
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Customer: replied 1 year ago.

So if I sign the Stipulation of Settlement paperwork with the mortgage company at the end of the week where it states they are going to forgive the debt I owe and wont look to sue me then I would be unable to file Chapter 13 and would have to pay taxes on the 1099-C which will be about 500K?


 


Are you saying I would need to file for bankruptcy before I sign any paperwork with the mortgage company where they are stating they will forgive my debt to them?

Expert:  WALLSTREETESQ replied 1 year ago.
What would be best for you is to not sign and list them on the bankruptcy, in most cases they will nor file a proof of claim for any money, this way you avoid the 1099c issue which is severe.
Customer: replied 1 year ago.

But now if I don't sign and file Chapter 13 that means I could be obligated to pay the mortgage company back on a monthly basis, correct?


 


If I make 65K is there any possibility I could file Chapter 7?

Expert:  WALLSTREETESQ replied 1 year ago.
You would only be required to pay the amount they claim you owe through a monthly payment plan that depends on your excess monthly income, so if you can show you have only $100 per month left over, you would only pay them $100 a month.
Customer: replied 1 year ago.

If I make 65K is there any possibility I could file Chapter 7?

Expert:  WALLSTREETESQ replied 1 year ago.
67,652 is the means test for a 3 person household, also in NY if this is a non consumer debt, their is no means test requirement. Debtors whose debts are primarily business debts or other non-consumer debts are not subject to the Means Test and other provisions under 11 U.S.C. §707(b). The provisions of §707(b) are those provisions under which the U.S. Trustee may move dismiss or convert a Chapter 7 case for abuse of Chapter 7.

The provisions applying the Mean Test and other provisions of §707(b) are only for cases of "primarily consumer debts." A “consumer debt” is “debt incurred by an individual primarily for a personal, family or household purpose.” If the debts are not primarily consumer debts, the U.S. Trustee cannot pursue the abuse provisions of 11 U.S.C. §707. In particular, debtors with primarily business debts and/or other non-consumer debts are not be required to file a Means Test.
Customer: replied 1 year ago.

OK, so there is a good chance I can file Chapter 7 even though I make 65K because my debt is from an investment property?


 


Are you able to take people from this site on as clients?

Expert:  WALLSTREETESQ replied 1 year ago.
Yes, as long as it is business debt their is no means test, we are not able to take clients from the site,

If you have any further questions please do not hesitate to ask.

If satisfied please provide us with positive feedback.
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15694
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
Customer: replied 1 year ago.

Just spoke with my lawyer and it looks like on 1/17 the judge will probably award summary judgment to the mortgage company and they can proceed with judgment against me and move forward with trying to sell the property although I would have thought they would have to actually foreclose on the property 1st before looking to sell it. He suggests it would be best to file Chapter 7 before the "entry" of her judgment and I wanted to know if you knew that to be true as well as I was under the impression that as long as I file Chapter 7 in the same year in which the 1099 was issued then my debt to the mortgage company would be erased and I also would not have to worry about paying taxes on that 1099 amount. Just trying to make sure that I file the Chapter 7 at the proper time so that the mortgage debt is wiped out and I wont have to worry about paying the IRS on the 1099 amount either

Expert:  WALLSTREETESQ replied 1 year ago.
For tax purposes, it would be best to file this year as you would receive the 1099c for this year, either way the bankruptcy would still discharge your income tax liability.
Customer: replied 1 year ago.

I was just informed that in addition to the mortgage amount which I owe, there will also be interest, penalties and legal fees that I technically owe which are considered "unsecured" debt as opposed to the mortgage debt. When filing the Chapter 7 would I need to know that unsecured debt amount as well so that it is in the filing and if so how could I obtain that figure? Would the mortgage company be obligated to give me that amount? I know my mortgage debt is 477K but I dont want to file just claiming that amount and a couple of years later the mortgage company comes after me for another 200K in interest, penalties and legal fees that weren't include din the bankruptcy filing.

Expert:  WALLSTREETESQ replied 1 year ago.
This is a common situation, you would list the amount of the mortgage, and the creditor would have to file an actual proof of claim, showing the amount actually owed, and once you review the proof of claim, you can object if any of the fees are not proper.

You can also contact the lender now for a pay off letter, which should list the entire mortgage with fees so you can list that amount as well.
Customer: replied 1 year ago.

Are they obligated to give me that payoff letter?


If for instance I file bankruptcy for 600K in total but in their proof of claim they submit 620K can I then revise my filing so that I make sure and wipe off the full 620K debt with no issues?

Expert:  WALLSTREETESQ replied 1 year ago.
They should provide it to you, I have never heard of a lender refusing it.

If the proof of claim is for a higher amount, that would be included in your bankruptcy, they cannot claim it after your chapter 13 is confirmed, you would have an opportunity to adjust your plan.
Customer: replied 1 year ago.

So the amount that I am claiming on my bankruptcy would not be finalized until after their proof of claim is filed so that way it would eventually be included in my filing and I wouldn't have any issues down the road?

Expert:  WALLSTREETESQ replied 1 year ago.
Yes, their are strict deadlines for a proof of claim to be filed, and if they do not file it on time, they cannot claim anything.

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