Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law

In Aug 96, XXXXX XXXXX contracted to purchase a commercial building

Customer Question
for the purpose of leasing...
In Aug 96, XXXXX XXXXX contracted to purchase a commercial building for the purpose of leasing it out as multiple apartments and offices. Then he solicited partners to form an LLC to raise the money for the down payment. I am one of those partners. Josh then closed on the purchase and the building was titled in his name with an owner financed mortgage also in his name. He then conveyed the building to the LLC via quit claim deed but the mortage remains his personal obligation. The LLC established a Bank line of credit and both Josh and I guaranteed it. The LOC is maxed. Josh provided me with a personal written guarantee that he will be personally liable for my guaratee to the bank. Josh is now considering personal Ch 7 bankruptcy. Question: What happens to the building, ,which the LLC owns, and the mortgage Josh is solely responsible for? What do I need to do to enforce Josh's guarantee to me when the bank attempts to collect from me on the LOC after Josh's bankruptcy filing?
Submitted: 8 years ago.Category: Bankruptcy Law
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 6 hours by:
12/8/2008
Bankruptcy Lawyer: TJ, Esq., Attorney replied 8 years ago
TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,473
Experience: JD, MBA
Verified

Hello and thank you for allowing me the opportunity to assist you.

Question: “Question: What happens to the building, ,which the LLC owns, and the mortgage Josh is solely responsible for? What do I need to do to enforce Josh's guarantee to me when the bank attempts to collect from me on the LOC after Josh's bankruptcy filing?”

Answer: Assuming the mortgage is included in Josh’s bankruptcy (it doesn’t have to be), then the lender will likely foreclose on the property. It doesn’t matter that the LLC owns the property since the lender’s security interest is still valid. Unfortunately, there is nothing you can do to collect from Josh if he includes your debt in his bankruptcy. It would be illegal to attempt to collect once the bankruptcy is filed (even a lawsuit is precluded). And if your debt is included in the bankruptcy, then a lawsuit would be precluded after Josh is discharged since the bankruptcy discharge acts as a permanent injunction on collecting the debt. I wish I had better news.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

Although my answer was unfavorable, please understand that my goal was to provide you with honest information. With that in mind, I hope that you found my answer useful. If so, then please remember to click the green accept button so that I will receive credit and compensation for my time. Positive feedback is always appreciated as well. Thank you and good luck!

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

 

Ask Your Own Bankruptcy Law Question
Customer reply replied 8 years ago
I gather from your response that Josh can exclude any debt he wishes from the bankruptcy?
Bankruptcy Lawyer: TJ, Esq., Attorney replied 8 years ago

Question: “I gather from your response that Josh can exclude any debt he wishes from the bankruptcy?”

Answer: To an extent. Josh may repay any debt he wishes. However, he may only sign a “reaffirmation agreement,” which keeps him legally liable, if doing so is in his best interests and is not overly burdensome. People generally reaffirm their debts when they want to keep the collateral that secures the debt. For example, if a debtor wants to keep his car, he may reaffirm his car loan. Similarly, Josh may want to reaffirm the mortgage if he wants to keep the property. As stated, however, keeping the debt cannot be overly burdensome since that affects the “fresh start” that bankruptcy is designed to provide.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

Ask Your Own Bankruptcy Law Question
Customer reply replied 8 years ago
Thank you for your cogent and timely responses. One last question. When the building is sold at foreclosure, what is the order of disbursements?
Bankruptcy Lawyer: TJ, Esq., Attorney replied 8 years ago

Hi again. Glad to help.

Question: “When the building is sold at foreclosure, what is the order of disbursements?”

Answer: The lender with the first mortgage will be paid first. If there is a second mortgage, that will be paid second, and if there is a third…you get the picture. After the lienholders are paid, and if there are any funds left over, then the money will be disbursed to the foreclosed owners of the property (i.e. the LLC).

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,473
Experience: JD, MBA
Verified
TJ, Esq. and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Ask TJ, Esq. Your Own Question
TJ, Esq.
TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,473
12,473 Satisfied Customers
Experience: JD, MBA

TJ, Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

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

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.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, 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!!

ElaineAtlanta, 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.

TonyApopka, 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

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,672 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
Signed a Reaffirmation Agreement (drafted by my car loan
signed a Reaffirmation Agreement (drafted by my car loan company, Wells Fargo). At that time, I was advised by my attorney to pay the "new terms" (which was far less than the "old terms"), since it wa… read more
KUMI95
KUMI95
Attorney
Doctoral Degree
17 satisfied customers
Curcumstances: I just had my 341 meeting for Ch 7 last week.
Curcumstances: I just had my 341 meeting for Ch 7 last week. I passed the means test and have elected to reaffirm two of my debts. My document from the United States Bankruptcy Court (Official form 9A… read more
KUMI95
KUMI95
Attorney
Doctoral Degree
17 satisfied customers
Rescinding a reaffirmation You've helped with this before
Rescinding a reaffirmation You've helped with this before but I'll give a quick update. 2000 behind on payments with 3000-6000 equity (depending on who you ask) ProSe for Reaff only, dealing with Asce… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,672 satisfied customers
Regarding my chapter 7 ProSe on the Reaffirmation $2000
Regarding my chapter 7 ProSe on the Reaffirmation $2000 behind on payments, $6000 equity in car Obviously, we don't want to be Repo'd with all that equity.My husband went to the reaff hearing today an… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,672 satisfied customers
Regarding my chapter 7 Reaffirmation hearing tomorrow,
Regarding my chapter 7 Reaffirmation hearing tomorrow, husband is going without me. $2000 behind on payments, 6000 equity in car. When I try to talk to the people at "ascension capital" who do Cap1's … read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
17,979 satisfied customers
I have to work on the day of the reaffirmation hearing. We
I have to work on the day of the reaffirmation hearing. We homeschool and are having a hard time finding daycare for a (very quiet and well behaved) 9 year old. Can we bring him? Maybe plug him into a… read more
DrakeLAW
DrakeLAW
Juris Doctorate
835 satisfied customers
I have asked you questions in the past but I will try to
I have asked you questions in the past but I will try to start fresh because I'm sure you get a ton of questions... My husband is attending a reaffirmation hearing alone and he is nervous. This is a c… read more
DrakeLAW
DrakeLAW
Juris Doctorate
835 satisfied customers
We filed chapter 7 bankruptcy in California with the intent
We filed chapter 7 bankruptcy in California with the intent on reaffirming the car.We are 90 days out with a report of no distribution and "awaiting discharge" on Pacer.We have $6000 equity in the car… read more
DrakeLAW
DrakeLAW
Juris Doctorate
835 satisfied customers
This is a Chapter 7 case. The Debtor signed a reaffirmation
This is a Chapter 7 case. The Debtor signed a reaffirmation agreement less than 60 days ago and now wants to rescind it...the case is about to close, discharge was ordered but case is open for adminis… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,672 satisfied customers
Well I had to file bankruptcy and I kept my automobile out.
well I had to file bankruptcy and I kept my automobile out. My atty did a reaffirmation to lender. Now almost 8 months later my lender changed the terms of said loan without my knowledge starting back… read more
Ray
Ray
Lawyer
Doctoral Degree
30,219 satisfied customers
I filed Chapter 7. My home was included due to clerical
I filed Chapter 7. My home was included due to clerical error by the trustee … read more
INFOLAWYER
INFOLAWYER
Partner
Doctoral Degree
55,439 satisfied customers
We had filed BK in 2009 and it was discharged May 2010. We
We had filed BK in 2009 and it was discharged May 2010. We had a 2nd on our house that we have been paying. I recently found out it was discharged in the bk. We did not reaffirm it in bk. We stopped m… read more
Barrister
Barrister
Attorney/Landlord/Realtor
Doctoral Degree
34,623 satisfied customers
I listed my auto financial on my bankruptcy. There was $1100
I listed my auto financial on my bankruptcy. There was $1100 left on the balance. I don't know why they hadn't repossessed the vehicle prior to my BK because of lost job i had not paid them for months… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,672 satisfied customers
After a Chapter 7 Bankruptcy, an Equity loan was reaffirmed,
After a Chapter 7 Bankruptcy, an Equity loan was reaffirmed, but only by the husband. The wife never signed. Does this mean that the loan company now has lost consent? In her not reaffirming the loan … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I asked this before and got no help. I have serious problems
I asked this before and got no help. I have serious problems with my credit and cannot get a new mortgage approved because I did not reaffirm my mortgage 6 years ago. The bank since has sold my mortga… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I missed my reaffirmation hearing due to I was in the
I missed my reaffirmation hearing due to I was in the hospital having brain surgery, what can I do to fix this so they don't take my car … read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
17,979 satisfied customers
I filed BK 7 ,in Chicago IL.I signed a Reaffirmation
I filed BK 7 ,in Chicago IL.I signed a Reaffirmation Agreemnet for my car.I see that it shows on my BK file. But I changed my mind and I would like to cancell/Rescind the Reaff Agreement. Whats the pr… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
17,979 satisfied customers
I am in chapter 7 western North Carolina - the reaffirmation
I am in chapter 7 western North Carolina - the reaffirmation agreement I got for my auto states an amount that I do not agree with in the line that says How much is the debt - On the date the bankrupt… read more
TJ, Esq.
TJ, Esq.
Attorney
12,473 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x