How to Avoid a Foreclosure when Filing for Bankruptcy Most people have a mortgage that lasts for 30 years. There’s a lot that can happen in 30 years. You can lose your job, you can become seriously ill or injured and rack up hundreds of thousands in medical debt, or you can struggle to make ends meet and get over your head in debt. You may find that you have fallen behind on your mortgage payment, and now you owe so much that you are at risk of the house falling into foreclosure. Filing for bankruptcy in Arizona may be able to help you avoid foreclosure, depending on what your other finances look like. Here’s what you need to know: Chapter 7 Bankruptcy Chapter 7 bankruptcy is the “clean slate” bankruptcy that most people think of when they think of filing. However, it applies to unsecured debts, such as personal loans, medical bills, and credit card debts. It doesn’t apply to secured debts like mortgages or car loans. You won’t be able to discharge your missed mortgage payments by filing Chapter 7 bankruptcy in Mesa. However, if you have decided that you don’t want to stay in the house, you can allow the bank to take the house and you can discharge what is left over. Chapter 13 Bankruptcy Chapter 13 bankruptcy is what’s known as a debt reorganization plan, and it’s the right choice if you want to keep your home. Rather than discharging debt, this chapter of bankruptcy puts your debt into a new payment plan – one that you can afford, based on your finances. The plan would include all the money that you owe your mortgage lender, and it would allow you to get current on your mortgage. The Chapter 13 debt repayment plan lasts for three to five years, depending on what you owe and what you negotiate with the bankruptcy court. At the end of that time, you may not have paid off everything you owe. If that is the case, the court may discharge what remains. Sometimes, you may carry more than one mortgage or line of credit related to your home. For example, you may have taken out a home equity loan to try to manage your debts on your own. If that is the case, you may have more debt tied up in your home than what your home is now worth. You may then be able to petition the court to strip these loans from your home, thereby making them unsecured debt. The value of the home doesn’t match the value of the debt, so the debt isn’t exactly secured. If the court agrees to your request, you may be able to discharge that debt entirely. You won’t be able to discharge your mortgage, but you may be able to discharge a second mortgage, home equity loan, or similar line of credit. Talk to a Bankruptcy Attorney Every bankruptcy filing is different because every person’s situation is unique. The best way to know what kind of bankruptcy will work for you – or even if bankruptcy will work for your goals – is to talk with an experienced Mesa bankruptcy attorney. An attorney will closely study your finances and determine the best path of action based on all the nuances and complexities of your case. For example, your home may have already moved into foreclosure, or you may be considering a short sale. Your bankruptcy attorney in Mesa can help you understand how bankruptcy can affect those and other situations. The most important things for you to remember is that you should never resign yourself to inaction. Though your circumstances may feel hopeless at times, they are not. There is a path forward that can help you get your finances under control and get you out from the weight of overwhelming debt. Call My AZ Lawyers today to learn more about how bankruptcy may help you. Our bankruptcy attorneys have been representing individual and business clients for many years, and they can handle even the most complex cases. We are committed to helping you find the best resolution as quickly as possible, and our attorneys are here to offer compassionate guidance at every step of the way. Call us today to schedule a consultation with a bankruptcy attorney and learn more. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: http://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post How to Avoid a Foreclosure when Filing for Bankruptcy appeared first on My AZ Lawyers.
How to Avoid a Foreclosure when Filing for Bankruptcy Most people have a mortgage that lasts for 30 years. There’s a lot that can happen in 30 years. You can lose your job, you can become seriously ill or injured and rack up hundreds of thousands in medical debt, or you can struggle to make ends meet and get over your head in debt. You may find that you have fallen behind on your mortgage payment, and now you owe so much that you are at risk of the house falling into foreclosure. Filing for bankruptcy in Arizona may be able to help you avoid foreclosure, depending on what your other finances look like. Here’s what you need to know: Chapter 7 Bankruptcy Chapter 7 bankruptcy is the “clean slate” bankruptcy that most people think of when they think of filing. However, it applies to unsecured debts, such as personal loans, medical bills, and credit card debts. It doesn’t apply to secured debts like mortgages or car loans. You won’t be able to discharge your missed mortgage payments by filing Chapter 7 bankruptcy in Mesa. However, if you have decided that you don’t want to stay in the house, you can allow the bank to take the house and you can discharge what is left over. Chapter 13 Bankruptcy Chapter 13 bankruptcy is what’s known as a debt reorganization plan, and it’s the right choice if you want to keep your home. Rather than discharging debt, this chapter of bankruptcy puts your debt into a new payment plan – one that you can afford, based on your finances. The plan would include all the money that you owe your mortgage lender, and it would allow you to get current on your mortgage. The Chapter 13 debt repayment plan lasts for three to five years, depending on what you owe and what you negotiate with the bankruptcy court. At the end of that time, you may not have paid off everything you owe. If that is the case, the court may discharge what remains. Sometimes, you may carry more than one mortgage or line of credit related to your home. For example, you may have taken out a home equity loan to try to manage your debts on your own. If that is the case, you may have more debt tied up in your home than what your home is now worth. You may then be able to petition the court to strip these loans from your home, thereby making them unsecured debt. The value of the home doesn’t match the value of the debt, so the debt isn’t exactly secured. If the court agrees to your request, you may be able to discharge that debt entirely. You won’t be able to discharge your mortgage, but you may be able to discharge a second mortgage, home equity loan, or similar line of credit. Talk to a Bankruptcy Attorney Every bankruptcy filing is different because every person’s situation is unique. The best way to know what kind of bankruptcy will work for you – or even if bankruptcy will work for your goals – is to talk with an experienced Mesa bankruptcy attorney. An attorney will closely study your finances and determine the best path of action based on all the nuances and complexities of your case. For example, your home may have already moved into foreclosure, or you may be considering a short sale. Your bankruptcy attorney in Mesa can help you understand how bankruptcy can affect those and other situations. The most important things for you to remember is that you should never resign yourself to inaction. Though your circumstances may feel hopeless at times, they are not. There is a path forward that can help you get your finances under control and get you out from the weight of overwhelming debt. Call My AZ Lawyers today to learn more about how bankruptcy may help you. Our bankruptcy attorneys have been representing individual and business clients for many years, and they can handle even the most complex cases. We are committed to helping you find the best resolution as quickly as possible, and our attorneys are here to offer compassionate guidance at every step of the way. Call us today to schedule a consultation with a bankruptcy attorney and learn more. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post How to Avoid a Foreclosure when Filing for Bankruptcy appeared first on My AZ Lawyers.
Read Our Bankruptcy Lawyer Reviews! More than 800 Five-Star Reviews from People Like You Reviews for Bankruptcy Law Office of Robert Weed 814 customer reviews Average rating:5 5 Laura M. Jones,… There are no words to express our gratitude for the care, attention and expertise demonstrated by this wonderful, caring lady. Laura went […] The post Reviews Just reviews by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.
When you file bankruptcy, they make it hard to pay your car payment. Be prepared to use the mail. You file bankruptcy and you want to keep your car. You know that means you need to keep paying. Seems like the car finance people would welcome your payments; but they make it hard. That may […] The post When you file bankruptcy, they make it hard to pay your car payment by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.
The Credit Effects of Foreclosures and Short Sales A mortgage is a secured debt, meaning that you can’t just decide not to pay and to walk away. If you fall behind on your payments, for any reason, the bank has the right to sell the property and recoup whatever value it can. That is the foreclosure process. The bank seizes your property and sells it at auction, trying to get as much as it can to cover what you still owe on the loan. If you fall behind on your mortgage and can’t pay it, you may decide to just let your home fall into foreclosure. You may even stop trying to pay anything, knowing that the inevitable will come. You know that you will take a hit to your credit, but you may not feel that you have any other options. Alternately, you may decide to take a more proactive approach and sell the house yourself before the foreclosure process can start. Yet, if you owe more than the house is worth, you may feel stuck. A short sale may help. With a short sale, you sell the house at a loss, and then you file a short sale request with the bank, indicating your financial hardship. The bank may agree to do so in order to get what it can, knowing that you are unable to pay. In most cases, you would not be responsible for the difference between the sale and the loan amount. Impact on Your Credit Score Exactly how a short sale or foreclosure will impact your credit score depends on a number of factors, including your credit history, how many payments you missed on the mortgage or how many payments you were late, the status of your other credit accounts, the amount of your debt, and so on. Typically, reports have shown an average drop in credit scores of anywhere from 150 to 300 points for both foreclosures and short sales. There is debate over whether foreclosure or short sale has a bigger impact, with people in both camps saying that one is better than the other. Reports of when you can apply for traditional financing after a foreclosure or short sale range anywhere from two to four years. Filing for Bankruptcy Filing for bankruptcy in Phoenix may be another option if you are falling behind on your house payments or want to get out of your debt. Which chapter of bankruptcy you file depends on your finances and your goals. For example, if you don’t want to keep your house, you can file for Phoenix Chapter 7 bankruptcy if you meet the income guidelines. You would relinquish the house, and any remaining debt would be discharged, as well as your unsecured debt. If you want to keep your house, and it has not already entered the foreclosure process, you can file for Phoenix Chapter 13 bankruptcy and get your debt reorganized. The amount you owe on your mortgage can be included in your debt repayment plan, which lasts for three to five years. You may be able to catch up on what you owe and save your home. You will also get your other debt under control, as you will have a single, affordable monthly payment. Debt that remains at the end of the repayment term may be discharged. Besides helping you get debt relief, an advantage of bankruptcy is that it doesn’t have the same impact on your credit as a foreclosure or a short sale. You’ll still see a drop in your credit score, but on average, it won’t be as bad as it would have been with a foreclosure or short sale. You’ll be able to rebuild your credit more quickly. If you are struggling to pay your mortgage or other debts, talk to My AZ Lawyers about how bankruptcy might help you. Our experienced bankruptcy attorneys will carefully review your finances and help you understand how each chapter of bankruptcy can impact you. We’ll help you find the best option to get the maximum debt relief and to meet your goals, whether that is to keep your house or other assets. Call in Phoenix today to meet with a bankruptcy lawyer and learn about your options for debt relief. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: http://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post The Credit Effects of Foreclosures and Short Sales appeared first on My AZ Lawyers.
The Credit Effects of Foreclosures and Short Sales A mortgage is a secured debt, meaning that you can’t just decide not to pay and to walk away. If you fall behind on your payments, for any reason, the bank has the right to sell the property and recoup whatever value it can. That is the foreclosure process. The bank seizes your property and sells it at auction, trying to get as much as it can to cover what you still owe on the loan. As a Mesa bankruptcy law office, My AZ Lawyers is very familiar with this process. If you fall behind on your mortgage and can’t pay it, you may decide to just let your home fall into foreclosure. You may even stop trying to pay anything, knowing that the inevitable will come. You know that you will take a hit to your credit, but you may not feel that you have any other options. Alternately, you may decide to take a more proactive approach and sell the house yourself before the foreclosure process can start. Yet, if you owe more than the house is worth, you may feel stuck. A short sale may help. With a short sale, you sell the house at a loss, and then you file a short sale request with the bank, indicating your financial hardship. The bank may agree to do so in order to get what it can, knowing that you are unable to pay. In most cases, you would not be responsible for the difference between the sale and the loan amount. Impact on Your Credit Score Exactly how a short sale or foreclosure will impact your credit score depends on a number of factors, including your credit history, how many payments you missed on the mortgage or how many payments you were late, the status of your other credit accounts, the amount of your debt, and so on. Typically, reports have shown an average drop in credit scores of anywhere from 150 to 300 points for both foreclosures and short sales. There is debate over whether foreclosure or short sale has a bigger impact, with people in both camps saying that one is better than the other. Reports of when you can apply for traditional financing after a foreclosure or short sale range anywhere from two to four years. Filing for Bankruptcy Filing for bankruptcy in Phoenix may be another option if you are falling behind on your house payments or want to get out of your debt. Which chapter of bankruptcy you file depends on your finances and your goals. For example, if you don’t want to keep your house, you can file for Phoenix Chapter 7 bankruptcy if you meet the income guidelines. You would relinquish the house, and any remaining debt would be discharged, as well as your unsecured debt. If you want to keep your house, and it has not already entered the foreclosure process, you can file for Phoenix Chapter 13 bankruptcy and get your debt reorganized. The amount you owe on your mortgage can be included in your debt repayment plan, which lasts for three to five years. You may be able to catch up on what you owe and save your home. You will also get your other debt under control, as you will have a single, affordable monthly payment. Debt that remains at the end of the repayment term may be discharged. Besides helping you get debt relief, an advantage of bankruptcy is that it doesn’t have the same impact on your credit as a foreclosure or a short sale. You’ll still see a drop in your credit score, but on average, it won’t be as bad as it would have been with a foreclosure or short sale. You’ll be able to rebuild your credit more quickly. If you are struggling to pay your mortgage or other debts, talk to My AZ Lawyers about how bankruptcy might help you. Our experienced bankruptcy attorneys will carefully review your finances and help you understand how each chapter of bankruptcy can impact you. We’ll help you find the best option to get the maximum debt relief and to meet your goals, whether that is to keep your house or other assets. Call in Phoenix today to meet with a bankruptcy lawyer and learn about your options for debt relief. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post The Credit Effects of Foreclosures and Short Sales appeared first on My AZ Lawyers.
https://www.nydailynews.com/new-york/ny-tlc-taxi-medallion-oversight-20201015-2pyve3pmfreuvfsii6mpjh43ta-story.htmlOriginally appeared on NY Daily NewsNew York City Council members hope a new office within the Taxi and Limousine Commission will keep taxi medallion owners from being taken for a ride.The Council on Thursday will vote on a bill to establish a new “Office of Financial Stability” within the TLC designed to keep tabs on the health of the city’s crumbling yellow cab industry. Bronx Councilman Ritchie Torres, the bill’s sponsor, said he wanted to prevent a repeat of history when the city sold medallions or approved medallion sales at prices of $1 million and more. The new office would give the TLC a “statutory obligation to oversee and regulate the financial stability of the medallion market,” Torres said.Medallions give yellow cabs the exclusive right to street hails in most of the city — but their value began to plummet in 2012 when Uber and other e-hail companies arrived in New York. Many medallion owners took out home loans or refinanced against their medallions — and are now drowning in insurmountable debt. The COVID-19 pandemic made things even worse, causing yellow cab ridership to fall by 92% in June from the same month of 2019. The Office of Financial Stability — which would open in November 2021 — won’t necessarily help cabbies who are now underwater, but it should prevent others from a similar fate, Torres said. “We cannot afford to have the TLC auction off medallions at speculative prices,” said Torres. “We cannot allow the TLC to approve medallion transfers with speculative loans.” With the majority of ride hails in New York being taken by Uber and Lyft, it’s unclear if the medallion values will ever rebound to sky-high levels. But Torres — the Democratic nominee for New York’s 15th Congressional district in the Bronx — said he was concerned by the “growing presence of private equity" in the medallion market, including MarbleGate, a Connecticut-based firm with roughly 4,000 New York taxi medallion loans in its portfolio. “I do not take for granted that there could never be a medallion bubble again,” said Torres. “I hope for the best but I prepare for the worst.”
FILING A CHAPTER 7 BANKRUPTCY IN PHILADELPHIA One of the biggest questions that people ask themselves when they are in financial trouble and contemplating filing for bankruptcy is “which of my property will I be able to keep?” Bankruptcy filings can allow you to protect certain personal assets from creditors that would otherwise be lost. […] The post Which of My Property Would Be Safe from Liquidation in a Chapter 7 Bankruptcy in Philadelphia? appeared first on .
Originally appeared on Baltimore Business Journal Filing for bankruptcy protection may seem taboo to small business owners, but a relatively new and little-known program could prove to be the difference between surviving the Covid-19 pandemic or closing for good. The flood of bankruptcies that many economists, lawyers and accountants expected has not transpired. While several large companies in the retail industry have filed for Chapter 11 bankruptcy — J.C. Penney, Neiman Marcus and Brooks Brothers to name a few — most small businesses have held off as they try to tread water. Small businesses have typically not filed Chapter 11 bankruptcy because the reorganization process associated with doing so tends to be costly and take a lot of time. If businesses don't have enough cash for reorganization, creditors will push them to liquidate. However, for many small businesses the clock is getting closer to striking midnight as the federal stimulus money dries up and the coronavirus pandemic continues to persist. Despite what President Donald Trump says, medical experts don't expect a vaccine to be widely available until 2021. A law passed by Congress last year that went into effect in February provides small businesses with a lifeline: a new section of Chapter 11 known as Subchapter V, which involves a more timely and less costly reorganization process. Subchapter V was created to provide an option for businesses with $2.7 million or less in debt. It prevents creditors from proceeding with collections, guarantees a reorganization plan is filed within 90 days and waives quarterly bankruptcy trustee fees. Congress raised the debt limit to $7.5 million when it passed its coronavirus relief package, known as the CARES Act, in March. "It was pure luck that we have such a useful tool that came out right when this [pandemic] happened," said Vadim Ronzhes, a tax consultant at Rosen, Sapperstein & Friedlander in Towson. Accountants and attorneys have traditionally recommend against filing for Chapter 11 in the past because of how difficult it can be to get a reorganization plan approved, Ronzhes said. With Subchapter V it's a much easier and quicker process, he said. During the proceedings, a business may continue to pay expenses such as employees wages and benefits while it develops a plan for paying off creditors, Ronzhes said. "The whole goal is to make sure that the business is operational and that you're able to continue supporting the community that you're operating in and make sure your employees are getting paid," Ronzhes said. "That is definitely one of the biggest benefits." Another benefit is that the company can bring on new investors or owners. In the current operating environment with all-time low interest rates, Ronzhes said outside investors are looking to provide debt or investment capital. Perhaps most important, Ronzhes said, is that the Subchapter V process brings all creditors to the table to come up with a plan for paying off debt. Everyone does not have to approve of the plan, but at least all parties will have been a part of the conversation, he said. During the pandemic many small business owners have complained about the challenges of working with landlords who are unwilling to rework leases. The Subchapter V process can force those landlords to come to the table while allowing the business to remain operational instead of being forced to close. There are downsides to filing for bankruptcy though. For one, it will negatively impact credit ratings. Filing for bankruptcy also carries a negative stigma. But in the current economic situation brought on by the pandemic, Ronzhes said the good more than likely outweighs the bad. "If you have multiple debtors and one person decides to file suit and take money out of your bank account through levies, that could end an organization," Ronzhes said. "As soon as you start paying employees, they're not showing up. This is a way to reorganize and I think it's going to be used a lot by businesses to give themselves breathing room." One industry that won't be helped is real estate, Ronzhes said. Real estate firms are usually structured by having separate limited liability companies for individual properties. Those LL Cs won't be able to file for Subchapter V protection because the overall organization may still be profitable.
Another important chapter 13 case involving a post-petition sale of a home for $11,000 net proceeds in excess of Colorado's $75,000 exemption in a chapter 13 when home had no nonexempt equity in filing was involved in In re Baker, 2020 Bankr. LEXIS 2771, Case No. 17-14041-EEB (Bankr. Colo, 29 Sept 2020). In ruling that the debtor could retain the proceeds of the sale rather than being forced to turn such proceeds over to the trustee, Judge Elizabeth Brown made a detailed analysis of the current law on the issue. The debtor had filed a motion to modify the plan to cease payments on the mortgage, and the chapter 13 trustee requested that the debtor be required to immediately turnover the $11,000 nonexempt proceeds, and be forced to segregate the $75,000 exempt homestead proceeds and restrict their use to purchase a new home and to turnover the proceeds toward payment of unsecured creditors if the proceeds were not so used within two years of filing. Debtor initially valued the home at $230,000 subject to a mortgage of $196,131; claiming the $34,131 equity as exempt. The court presumed that the initial valuation was accurate, and the $86,000 equity at the time of sale was due to post-petition appreciation in the value of the property. The court noted the relevancy of a number of bankruptcy statutes involved in this determination. Initially the court examined the fundamental policy in chapter 13 vs chapter 7. In chapter 7 the debtor loses non-exempt property in exchange for retaining future income. In chapter 13 the debtor retains the property but contributes future disposable income in an amount to at least cover the amount the trustee would have received in a chapter 7 case. Any interpretation of the chapter 13 statutes must not blur the fundamental premise that the plan payments substitute for the debtor's property, leaving the debtor with the freedom to threat his property as his own without court intervention at every turn.1 However the Bankruptcy Code also requires debtors to make their best efforts to repay creditors with future income, and §1329(a) provides for modification of a confirmed plan to 1) increase or decrease payments, 2) extend or reduce the length of the plan payments, 3) modify a creditors rights under the plan to account for other payments received by the creditor, or 4) decrease plan payments as necessary so as to allow the debtor to obtain health insurance. Any modification must satisfy the original confirmation requirements, including the best interest of creditors test of §1325(a)(4) and (2) and the good faith requirement of §1325(a)(3). §1329(b) does not state a date at which the best interest of creditors is measured, hence resulting in a number of courts determining that it is measured as of the date of the modification. However §1325(a)(4) specifies the the best interest of creditors test is to be applied 'as of the effective date of the plan.' The legislative history indicates:In applying the standards of proposed 11 U.S.C. § 1325(a)(4) to the confirmation of a modified plan, 'the plan' as used in the section will be the plan as modified under this section, by virtue of the incorporation by reference into this section of proposed 11 U.S.C. § 1323(b). Thus, the application of the liquidation value test must be redetermined at the time of the confirmation of the modified plan.H.R. Rep. No. 595, 95th Cong., 1st Sess. 431 (1977), as reprinted in U.S.C.C.A.N. 5787, 6387. While this statement could be interpreted to support the determination as of the modification date, it also can be interpreted as requiring the test to be reapplied, but not necessarily with a change in the measuring date. In a typical modification based on a decrease in income, the test still requires the debtor to pay in at least as much as the trustee would have received in a chapter 7 on the effective date - the testing date for best interest remains the same as the original confirmation determination. Even if the legislative history is clear courts need not be bound by it, and can expand a statute's literal meaning to accomplish beneficial results, or to serve an act's purpose, or to avoid thwarting a legislative intent apparent from an entire act.2 Instead of stating the tests that apply to modifications, §1329(b) merely incorporates other statutes by reference. One of these statutes, §1325(a)(4), states that the test is to be applied 'as of the effective date of the plan.' Thus it should be assumed that the court should apply the same date under §1329(b). The collier treatise supports the conclusion that the court should not recalculate the best interest test based on property value at the time of modification.[t]he best-interests test turns on what would have happened had the debtor filed a chapter 7 case instead of a chapter 13 case. If a chapter 7 case had been filed, only property of the estate under section 541 would have been available to creditors and not the additional property that became property of the estate under section 1306(a). Therefore, property acquired after the petition, other than the limited types that become property of the estate under section 541, is not relevant to application of section 1325(a)(4) to a proposed plan modification. To hold otherwise, a court would have to find the best-interests test to be a constantly fluctuating standard, subject not only to property coming into the estate and leaving the estate but also to changes in the value of estate property. Indeed, if a case is converted from chapter 13 to chapter 7, property of the estate ordinarily is based on the property the debtor had on the date of the petition, and not the date of conversion. [§ 348(f)(1)] The policy behind this provision, that a debtor should not be discouraged from filing a chapter 13 case by the possibility that property acquired during the case could be lost to creditors who would have no right to it had the debtor initially filed a chapter 7 case, is equally applicable. For similar reasons, the acquisition or liquidation of assets should not be grounds for modification, at least if those assets do not produce additional ongoing income for the debtor.8 Collier on Bankruptcy ¶ 1329.05[3] (Richard Levin & Henry J. Sommer eds.,16th ed. 2019). To require an increase in payments due to post-confirmation appreciation of property would threaten the very fabric of the chapter 13 bargain. Suppose a debtor owns a house. The §1325(a)(4) test is conducted at the time of the confirmation hearing and the court finds that, given the appraised value of the house, all creditors would receive more from the plan than they would have received in a chapter 7 liquidation. Two years later, however, the house has increased in value. If an unsecured creditor moves to modify, and if the § 1325(a)(4) test is redone, the payments, previously high enough to justify confirmation, no longer suffice. To make the plan work as modified, the debtor would have to liquidate principal, not income. This would be a violation of the basic chapter 13 bargain.Carlson, supra, at 599-600. The court next examined the trustee's argument under §1306(a)(1), which provides that property of the estate includes all property specified in §541 that the debtor acquires after the commencement of the case, but before the case is closed, dismissed, or converted, which the trustee asserted included post-petition appreciation in the property. However, §1327(b) provides that except as otherwise provided, confirmation of a chapter 13 plan vests all property of the estate in the debtor. §1327(c) provides that such property vests free and clear of any claim or interest of any creditor provided for by the plan (except as otherwise provided in the plan or order confirming the plan). There are a number of interpretations of the meaning of this section in the caselaw. Judge Brown concluded that the 'estate termination' approach is the best interpretation of the statute. This interpretation concludes that the estate ceases to exist upon confirmation, and all property of the estate, whether acquired before or after confirmation, becomes property of the debtor. Judge Brown cited In re Dagen, 386 B.R. 777, 782 (Bankr. D. Colo. 2008) wherein the court found that a creditor collecting pre and post-petition child support from debtor's postpetition income was not in violation of the stay, finding that the estate termination approach was the only interpretation consistent with §362(b)(2)(B) allowing a child support creditor to collect its debt from property that is not property of the estate. The court concluded that the estate termination approach is the only interpretation that respects the plain meaning of §1327(b). In §1306(b) the Code already provides that a chapter 13 debtor has the right to possess all property of the estate from and after the date of filing. Therefore unless the concept of vesting in §1327(b) refers to a transfer of ownership, §1327(b) is rendered meaningless. This interpretation does not conflict with §1306(a). Under this interpretation when debtor files chapter both a debtors home and wages become property of the estate under §1306(a) protected by the automatic stay. On confirmation both the home and wages become property of the debtor again, but continue to be protected by the automatic stay (with narrow excepts set out in §362(b) until the case is closed, dismissed or discharged. §362(a)(5)-(7), (c)(2). §1306(a) still plays an important role in bringing those assets under the protection of the automatic stay, and determining what assets must be considered in the best interest of creditors test at confirmation. §1327(b) on the other hand terminates the estates rights to that property. The debtor is free to spend his wages and deal with his assets as he wishes, so long as he fulfills his plan obligations. He should not be required to seek court approval to trade in his car or obtain a home-equity line of credit to repair his plumbing. The plan is the only contract between the debtor and his prepetition creditors. An increase in income may require a modification of this contract, not because of §1306(a), but because Congress expressly provided for the adjustment to reflect changes in the debtor's financial circumstances, and does so not by changing ownership of the wages but by by increasing the payment obligation - ie granting unsecured creditors an in personam remedy, not an in rem remedy. The interpretation is also consistent with the definition of vest in §1141(b), which has been consistently interpreted as meaning the property is no longer property of the estate. Similarly §349(b)(3) uses the term 'revest' to put property in the estate back into the entity in which such property was vested immediately before commencement of the case when a case is dismissed. Finally, Judge Brown examined the trustee's argument that the modification was not in good faith. The trustee asserted that the debtor's failure to commit the proceeds from the sale of his home to repay creditors was bad faith. That a debtor refuses to modify a plan in accordance with his present ability to pay allegedly contravenes the purpose and intent of chapter 13. §1325(a)(3) does require a plan to be proposed in good faith, and such requirement is to be applied to plan modifications per §1329(b). One of the questions in the good faith analysis is whether the debtor has unfairly manipulated the Bankruptcy Code.3 In ruling in favor of the debtor, the court examined the case of In re Cranmer), 697 F.3d 1314, 1319 (10th Cir. 2012). In this case an above-median income debtor did not include his $1,940/month social security income in his computation of projected disposable income, and did not commit such funds toward payment to unsecured creditors. While the Code expressly omits social security income from the computation of disposable income, the trustee argued that given the virtual certainty of the receipt of these additional $87,000 funds during the plan such funds should be taken into account in determining the amount to be paid in the plan per Hamilton v. Lanning, 560 U.S. 505 (2010). The 10th Circuit disagreed as the Code expressly authorized the exclusion of social security income, thus such income as note one of the unusual cases contemplated by Lanning. When a debtor calculates the plan payments exactly as the Bankruptcy Coe and Social Security Act allow him to, the exclusion of social security income cannot constitute a lack of good faith. Id. 697 F.3d at 1319. Likewise the court in In re Boisjoli, 591 B.R. 468 (Bankr. D. Colo. 2018) rejected the trustee's argument that a 60 month 100% plan was in bad faith when the debtors had the ability to repay creditors much sooner. If the plan met all the Code's requirements they had done everything the Code required of them. Judge Brown concluded the same reasoning applied here, as the Code permits the debtors to retain the proceeds from the sale of the home. 1 Yoon v. Krick (In re Krick), 373 B.R. 593, 607 (Bankr. N.D. Ind. 2007). and see David Gray Carlson, Modified Plans of Reorganization and the Basic Chapter 13 Bargain 83 Am. Bankr. L.J. 585 (2009).↩2 2A Norman Singer & Shambie Singer, Sutherland Statutes and Statutory Construction § 48:1 (7th ed., October 2019 update) ("Sutherland") (citing Train v. Colo. Public Interest Research Group, Inc, 426 U.S. 1, 10 (1976)).↩3 Robinson v. Tenantry (In re Robinson), 987 F.2d 665, 668 n. 7 (10th Cir. 1993).↩Michael Barnett, Esq.Law Offices of Larry Heinkel, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com