In the Maryland case of In re: Miller, Bankruptcy Judge Martin Teel determined that the automatic stay should be lifted to allow a sale in lieu of partition case to proceed between previously divorced parties. He also decided that the Maryland State Court could determine that the proceeds of sale could be disbursed in a manner which differed from the parties’ separation agreement. Counsel for the debtor argued that the request to deviate from the settlement agreement penetrated the bankruptcy estate and was thus, subject to continued protection by the stay. However, the bankruptcy court indicated that the division of proceeds was a state court function.
In the case of In re Madeoy, Maryland Bankruptcy Judge Thomas Catliota has ruled that the purchase of a bankruptcy debtor’s home by an insider, followed by the renting back of the home to that debtor, does not, in and of itself, create a general right for other creditors to equitably subordinate the insider’s claim. Judge Catliota noted that there was no evidence that the insider took advantage of his relationship to extract favorable terms. In particular, he negotiated at arms length with the secured lender in order to purchase the home in the first place.
An oldie but a goodie — this New York Times article talks about the difficulty in getting rid of student loans in bankruptcy:
The United States Supreme Court in the case of Bank of America v. Caulkett has ruled that a junior lien secured by real property can never be stripped off in a Chapter 7 case. In doing so, the court affirmed the rulings of most lower courts on this issue. The party seeking to strip the lien in the Bank of America case argued that the Supreme Court’s prior ruling in Dewsnup v. Timm (which previously barred lien strips in Chapter 7 cases) only applied to cases in which some equity remained after deducting the payoffs of senior liens. Such liens are labelled “partially underwater liens” in the Bank of America opinion. The court held that liens that are completely underwater cannot be stripped even though the lender would receive nothing if the property were sold for market value.
In Maryland, a mortgage lender is required to send detailed notice before filing a foreclosure case. In the case of Ramon Granados, his lender brought two foreclosure cases. Prior to filing the first case, it sent the required notice. However, it dismissed the first case. Later it filed a second case and sent no notice before this case was filed. The Maryland Court of Special Appeals determined that the failure to send the notice before the filing of the second foreclosure case was fatal to the second foreclosure case. As a result the foreclosure sale was invalidated.
Terren Curtis thought he was smart enough to act as his own attorney in a bankruptcy case. Admittedly he was pretty smart; smart enough to appeal a bankruptcy court decision to the U.S. District Court. Unfortunately, he still lost his appeal. Mr. Curtis simply did not have the ability to properly prepare a Motion to Avoid a Judicial Lien. As a result, he ran out of chances to fix what he filed and was unable to avoid the proper amount of the lien. As a result, it remained attached to his real property. Mr. Curtis’ case is just one example of how hiring an experienced bankruptcy lawyer to handle your bankruptcy case is a wise investment.
Judge Mannes of the Maryland Bankruptcy Court has ruled that a proof of claim must be filed in order to strip a junior mortgage. Mortgages can be turned into unsecured claims in a chapter 13 case. In many cases, a bankruptcy filer can pay a small portion of a second mortgage or home equity loan in a period of less than five years and never have to make another payment. Generally creditors are responsible for filing a proof of claim or a statement that shows how much they are owed. If this proof of claim is not filed (and it often isn’t), and you have a Judge Mannes case, you run the risk of not being able to strip this claim. Make sure you have an experienced bankruptcy attorney on your side!
It is commonly known that bankruptcy stops garnishments. However, did you know that you can get money back that has been garnished if you file bankruptcy? A person filing bankruptcy will often get back money that his employer or a bank is holding. The bankruptcy filer can also recover funds taken in the 90 days prior to filing bankruptcy. Call our office and find out how we can help you!
If you want to file bankruptcy and no longer be responsible for a mortgage, this is often possible. However, many mortgage companies have begun refusing to foreclose because they realize that they will likely end up owning the home and they do not want the risks and responsibilities that come with home ownership. This is especially true with cases that include condominium units in less desirable neighborhoods. The problem is that when a foreclosure does not occur, a bankruptcy filer or debtor will still own the property. So, who does the Condominium Association or Homeowner’s Association look to for payment of its assessments? The homeowner, of course!
A debtor can get rid of all assessments that are incurred before filing a bankruptcy case. However, if he files a chapter 7 bankruptcy, he cannot get rid of any assessments incurred after filing (post petition assessments). In addition, he may or may not be able to get rid of these post petition assessments even if he files a chapter 13 case. Recently, Judge Mannes of the United States Bankruptcy Court, Greenbelt Division decided a case handled by Wampler & Souder, LLC, which allowed the debtor it represented to discharge or get rid of post petition assessments in a chapter 13 case. Unfortunately, this isn’t uniformly the case, as there is some remaining authority which suggests that a debtor continues to be responsible for post petition assessments even when a chapter 13 case is filed.
A couple of common misperceptions of the bankruptcy process are that: 1. a person filing bankruptcy has to give up their property or that 2. a person filing bankruptcy can keep an unlimited amount of property and not have to repay debt. The reality is that you can generally keep all property which you can exempt and which is not the subject of a lien (i.e. mortgage or car loan). Additionally, you can keep more property if you pay for it in your bankruptcy plan.
Generally, Maryland exemptions are:
You may exempt $22,625 for a home which you live in. Presently, it is unclear as to whether this exemption may be used for both a husband and wife. If you and your spouse bought a home together it is exempt from your individual, but not your joint creditors.
$6,000 in cash or any property may be exempt.
Property besides Houses, buildings or land
Up to $5,000 total in any property plus you may exempt up to $1,000 total in Clothing, household goods, furnishings, appliances, books or pets. Exemptions are unlimited for a burial plot, a perpetual care trust fund, and prepaid college trust funds; health aids; personal injury recoveries, 75% of net wages, 75% of net alimony, child support, Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans), unemployment compensation, workers’ compensation, Baltimore police death benefits, crime victims’ compensation, public assistance benefits, tools of trade (this can include motor vehicles) up to $5,000, fraternal benefit society benefits, certain life insurance or annuity contract proceeds, dividends, interest, loan, cash, or surrender value if beneficiary is a dependent of the insured, medical benefits deducted from wages as well as medical insurance payments, disability or health benefits.