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I bought trustee deeds from a Chapter 7 bankruptcy trustee…

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I bought trustee deeds...

I bought trustee deeds from a Chapter 7 bankruptcy trustee years ago, and the title of the properties are lised***** Anywhere, USA 12345 subject to the existing claims and creditors either known or unknown. THese interests were purchased and the bankrutpcy trustee told me that I had legally purchased all income that I could generate via rents with no legal ramifications from the creditors. He also told me that if I were to file chapter 11, that there is some flexibility with regards ***** ***** to the fraudulent conveyance rules because I am not really an owner because I have not perfected the ownership issues. So even though I am listed in the county as being the owner, I am not really an owner because the real ownership and control really belongs to the creditors, of which I am not a party to these contracts, who still retain their rights to foreclose as their remedy for non-payment. My purchase did nothing to affect their remedy. The main purpose of the transaction is to give me ownership to rent the house until foreclosure and to give me standing to settle the liens as the owner, that is what I paid for.

Lawyer's Assistant: Since laws vary from place to place, what state is this in? And has any paperwork been filed?

Oregon 9th circuit

Lawyer's Assistant: Has anything been filed or reported?

I was also told that because my interest is not perfected and all of the debt is non-recourse and unsecured being derived from another taxpayer, that fraudulent transfer exceptions are afforded to me if the Chapter 11 should not be confirmed, since this is an effort to try something different. My goal here is to see if I can take these equitable interests and develop a plan that provides the creditors with more recovery than just letting them foreclose. I am thinking about filing a Chapter 11 and the first couple of attorneys I met with had any clue as to what I am talking about so I am doing some research.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

The trustee that sold me these interests is now a judge in the 9th circuit and I can't talk to him about it anymore.

Submitted: 5 months ago.Category: Bankruptcy Law
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Customer reply replied 5 months ago
would it be faster to talk on the phone?
Answered in 9 hours by:
3/12/2018
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago
DamienJD
DamienJD, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5,418
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Hello: My name is ***** ***** I am an attorney. Please give me a moment to review your question. I may ask some questions to clarify issues.

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Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

Is anyone challenging the former trustee's interpretation? Have you been in contact with the creditors?

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Customer reply replied 5 months ago
not a good time to talk getting the kids up and around. I need to be out of the house with them in an hour. Too chaotic to use phone.If we can power through this way, its best for now, I do want to learn this
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

Okay. You ask whether something could be worked out with the creditors rather than waiting for a possible foreclosure action. So, I wonder whether you spoke to the creditors to determine any payoff amounts.

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Customer reply replied 5 months ago
nobody is challenging the US Trustees interpretation but me. My case would be different, concerned if I put assets in that I am on title and they are really no more than an equitable interest with a right to settle the liens of the debtor of the estate I bought them out of. I want to make a covenant that I won't transfer any asset beyond my 6 LLCs, that I want to treat like a consolidated entity with which I attempt to settle these liens and obtain legal title.I worry about what happens to me if I make a mistake or get a back ruling or can't confirm, do these assets then go to Chapter 7? I purchased the right to income until foreclosure under a court order does this go away upon becoming part of the estate.
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

You mention that you want to make a convenant. With whom? Also, is the original bankruptcy case still open? Or has it been dismissed or discharged?

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Customer reply replied 5 months ago
I have commingled these assets since day one. I have each entity segregated by servicer and asset, date owned. I am the sole owner, of all entities and all entities acquired the same assets have the same modelto settle the equitable interests and perfect them.If I go a year and it gets dismissed how will the income be treated? Could I transfer it back to the companies and use it to settle the rest of the homes? If there is a covenant not to ever moved the collateral outside of my entities. The creditors have zero claim to my income but they can foreclose and get paid, to the extent of their liens, I keep the rest.
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

Are you saying you want to enter into covenants and agreements with the creditors?

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Customer reply replied 5 months ago
I have faced stiff uphill battle with these interests that I have purchased - about $40,000,000 of homes. Local creditors counsel has blackballed me saying they don't like my model. I am trying to bridge the gap and this just came to me last night, a covenant so that they know that I am not going to transfer the property away unless I perfect title. I need to start somewhere, I don't see too much cooperation from local counsel, I made their jobs difficult spending countless hours working on my files that the lowest level firms were on a flat fee compensation agreement with the servicer.
Customer reply replied 5 months ago
I want to use the Chapter 11 to settle these liens as I see no other way to do this. But what if I do find another way? The protective covenant would be tied in with being treated as a consolidated group for income tax purposes to extends the stay to all of my LLCs and only have to file one BK.
Customer reply replied 5 months ago
i want to hammer home my entire goal is to settle so that I don't get inundated with bad faith filing motions from the other side that can get expensive to respond to
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

If you cannot get the creditors on board, I am afraid you are right that this will be a stiff uphill battle. So, even if you attempted to file a Chapter 11 to hammer this out, it appears you will have deep opposition from the creditors. Unless you can get the creditors to agree to the protective covenants, etc. you would have difficulty utilizing your proposed plan.

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Customer reply replied 5 months ago
except I firmly believe that once they see this as we are primarily a judicial foreclosure state right now and the junior lien holders get nothing, I am betting it wont take too long to get traction especially since the first are really for the most part already fully secured.
Customer reply replied 5 months ago
Do you have the code sections handy that deal with equitable interests?I guess my question to you is, the income my real estate interests kick off, is mine now - does that carry over the estate?Assuming no criminal intent of any kind do you see a bankruptcy judge sending my assets to a chapter 7 liquidation? If I cant get a plan approved?
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

I would have to do research on the code and/or income from real estate, etc. That is very complicated. It may be beyond my area of expertise.

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Customer reply replied 5 months ago
i would pay today, I just don't have time now and want to submerse myself into this
Bankruptcy Lawyer: DamienJD, Attorney replied 5 months ago

You can touch base tomorrow. It would be a premium service because of the time it would take. Take care.

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