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RONB-ESQ
RONB-ESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 357
Experience:  Right of Way Manager at Access Midstream Partners, LP
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I'm getting ready to sell a rental property that was

Customer Question

I'm getting ready to sell a rental property that was part of a chapter 11 bankruptcy cramdown. The first mortgage was bifurcated into a secured $180k and unsecured $80,000 since the property value at time my chap 11 plan approval by court in 2012 was $180k. The $180k I've been paying since approval and the $80k, I am paying 2% or $133/mo for 5 years that will end 04/10/17. The escrow company requested a payoff and the lender asked payment for $260k and not $180k. Can they legally enforce the $260k? What are my course of action to make sure they take the $180k? I will continue making payment of the $133/mo till 04/17 for the $80k.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  RONB-ESQ replied 1 year ago.

Hello my name is ***** ***** I am a licensed attorney. I welcome you to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. The question and response may be viewed by other parties as noted in JA’s terms of service. By continuing, you confirm that you understand and agree to these terms.

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You should be able to view my answer just below this response as we continue….

Expert:  RONB-ESQ replied 1 year ago.

I had some problems sleeping tonight so thought I would catch up on some stuff. I have a couple questions and fully understand if you are not online and can't respond until later today. I have practiced in the area of bankruptcy for several years.

I am presuming (correct me if I am wrong) that since you reference making payments of $133 per month until 417 then you have a chapter 11 plan that lays out payments over 5 years. After completion of all plan payments then you obtain the discharge. That is most likely why the bank is asking for the full $260 since nothing is final until you complete all plan payments. From their perspective if you stop making plan payments next month and that continues for a period of time then your plan will be dismissed for failure to comply with the plan requirements and then they can go back and collect as though there never was a chapter 11 plan.

I am sorry as this is probably not the news you wanted to hear, but I have a professional obligations to give you the most accurate answer I can so that you know what your rights are and can then act on those rights after consulting with a local attorney.

While the bank can legally enforce the original loan balance you may be able to have your attorney negotiate a settlement where they would take a lesser amount to be done with the loan. If the property clearly is not worth the $260 then they may be willing to take something in between in lieu of the potential of having to foreclose (if the plan fails) as they would receive much less typically in a foreclosure sale unless the bank buys it and holds it. You may be able to get them to allow what would amount to a short sell with the benefit being that they forgive the $80K or a portion as part of the deal?? Do note that if they forgive debt they will likely report it as forgiven debt to the IRS on a 1099C. I am ahead of things here as first thing is you need to find out if they are willing to negotiate a release of their lien for an amount less than the $260K. I may take a nap, but I will be back online later today and would be happy to reply to additional questions or further clarify my answer.

Regards,

Ron

Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  RONB-ESQ replied 1 year ago.

I took care of some things and just got back online. I see the request for a phone call. I just wanted to confirm that was you and not the website as it sends offers automatically. I will be available for some time this afternoon and can do a phone call if you prefer. A call cost $52 so just let me know if you want me to send you the offer and I will send it to you. Also note that you are welcome to just continue here for no additional fee, but I understand the typing gets kind of old and I don't type that fast myself. Let me know what you decide. If I don't respond immediately it is because I am dealing with another customer, but I will see it once you reply and will get to you next. Before I call I will confirm that you will be available.

Regards,

Ron

Expert:  RONB-ESQ replied 1 year ago.

I wanted to check back with you and make sure your question was answered. I see it mentions wanting a phone call and I must have overlooked this request. If you would still like a phone call to go over these issues just reply here and let me know and I can send you the request or if you prefer we can continue here if you need additional information. If your question has been answered then thank you in advance for leaving me positive feedback as that is the only way I am compensated for the time I spend answering questions. Once you provide a positive rating a portion of what you have already paid the website is sent to me. Let me know how best I can help you. I should be available this evening until about 10:00 PM CST. Tomorrow I have some afternoon appointments so tomorrow I will be back online after 5:00 PM CST

Regards,

Ron

Expert:  RONB-ESQ replied 1 year ago.

In case you are new to Just Answer I wanted to let you know that I am just an attorney setting at my home office and do not work directly for them. After you leave positive feedback (good-excellent) then I get a portion of what you paid JA. Note that if you do not leave feedback I receive nothing for the time I spent answering your question. Thank you in advance for leaving positive feedback before you log off. Do note that after leaving positive feedback you are welcome to reply here with any follow up questions you have related to your original question for free as long as needed.

Regards,

Ron

Expert:  RONB-ESQ replied 1 year ago.

Hello again,

I wanted to check in with you and confirm that you did not have any further follow up questions for me from the answers I provided to you on the 26th. For some reason, the Experts are not always getting replies or ratings (at the top of the question/answer page you are viewing or in the pop up box for this question), which is how we get credit (paid by the Site) for our work, that the customer thinks have gone through. In your case I have not received a rating. If you are having technical difficulties with reading, replying or rating, please let me know so that I can inform the Site administrator. Please note that Site use works best while using a computer and using either Google Chrome or Firefox.

In any event, it was a pleasure assisting you and I would be glad to attempt to assist you further on this issue, or a new legal issue, if needed. You can go directly to my page for future questions by going here: http://www.justanswer.com/law/expert-ron-b/?rpt=3800

Regards, Ron