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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 16036
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I will settle out of court with the lender of a business bad

Resolved Question:

I will settle out of court with the lender of a business bad debt that I signed a personal guaranty pledging an investment property that was related to a defective mortgage (joint tenancy by the entireties owned, but my spouse never signed the note and personal guaranty). The debt was discharged under Chapter 7 but the trustee allowed the lender to pursue the collateral for the loan. Since I will be paying the lender 10% of the property's market value, will the bankruptcy trustee have any claim to the net proceeds of the sale of the originally pledged investment property? The property is located in Florida.
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 : When was the case discharged?
WALLSTREETESQ : Was the trustee under the assumption the lender would take the entire property?
WALLSTREETESQ : Did the trustee ask you to provide information regarding the sale or settlement?
Expert:  WALLSTREETESQ replied 1 year ago.
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Customer: replied 1 year ago.
When was the case discharged? August 22, 2011
Was the trustee under the assumption the lender would take the entire property? Yes, but specified that the bank would not be entitled to distribution from the bankruptcy estate for any unsecured portion.
WALLSTREETESQ : Did the trustee ask you to provide information regarding the sale or settlement? Not at this time. However, the dispite the discharge date of August 22, 2011, the case is still in the process of being closed.
Expert:  WALLSTREETESQ replied 1 year ago.
If the bankruptcy case is not closed, you would have to notify the trustee of the settlement, and any non exempt portion can be taken, if the case is still open, if the case is closed and a discharge has happened, the trustee would not have to be involved.

What you may want to do is contact the trustee and ask them when the case will be closed, to see if you can delay the settlement for a time after the closing of the case.
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 16036
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.
My bankruptcy attorney seems to think that I do not have to inform the bankruptcy trustee about the settlement reached with the originator of the loan nor the subsequent sale of the rental/investment property. He said that the secured property was listed as property claimed as exempt (jointly held with non-filing spouse-tenants by the entireties in the state of Florida) under Schedule C of the Personal Chapter 7 bankruptcy filing. However, my other attorney seems to think that it may complicate things with respect to the settlement with the original lender of business equity line. What say you?
Expert:  WALLSTREETESQ replied 1 year ago.
If the property was listed as exempt, your bankruptcy attorney is correct, that it does not have to be disclosed, however, if the trustee is waiting for the settlement to close the estate, you should disclose the terms, also, if the settlement gives you income, that at the time of the filing of the petition would not be exempt, you may have to disclose.

First I would find out what the delay is in getting the case closed, if it has nothing to do with the settlement issues, and it was listed as exempt, you would be fine not to disclose.
Customer: replied 1 year ago.

what happens if I settle with bank and defer selling it until the chapter 7 is closed. Also since my wife who is not part of the bankruptcy and who is co-owner under joint tenancy by the entireties sells the property , shouldn't the net proceeds from the sale be exempt from any claims, including bankruptcy trustee?

Expert:  WALLSTREETESQ replied 1 year ago.
It would be fine if this happens after the case is closed, in terms of the joint tenancy issues, her share would be protected as well as yours under FL law.
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 16036
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

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