《杨清泉律师专栏》DAUGHTERS’ BANKRUPTCIES FAIL TO SAVE PARENTS’ INVESTMENT...(PART II)

DAUGHTERS’ BANKRUPTCIES FAIL TO SAVE PARENTS’ INVESTMENT PROPERTIES

DAUGHTERS’ BANKRUPTCIES FAIL TO SAVE PARENTS’ INVESTMENT PROPERTIES(Part I)

Hence, both debtors filed plans proposing to retain the properties in their Chapter 13 cases. But neither debtor could have her plan confirmed. Normally, plans cannot be confirmed due to income shortages. Net incomes do not show sufficient disposable income to fund a plan that fully the mortgage defaults over a period of three years. To illustrate, if the default is $36,000, debtor must have disposable income, i.e. after all allowed expenses are deducted from net income, there must be at least $1,000 left monthly to repay the default of $36,000 over 36 months. But since the Chapter 13 trustee gets 10% of each plan payment to administer the case, the real minimum disposable income required confirming the plan in this example is $1,100. In addition, priority debt such as taxes and non-dischargeable debts such as student loans must be paid 100% over 5 years. These two factors may require more disposable income from debtor the she may not have, making the plan infeasible.

It seems sisters did not have adequate disposable income to confirm a plan to save the properties. The court said the plans produce nothing but delay and found no cause to believe that either debtor would confirm a plan. Section 362(d)(4)(B) says bankruptcy courts “shall grant” relief from the automatic stay, “insofar as the stay enjoins acts against real property by a creditor whose claim is secured by that property…if the court finds that the filing of the petition was part of a scheme to delay, hinder, or defraud creditors that involved…multiple bankruptcy filings affecting such property,” the court said. “That is precisely the case here as to both daughters, and relief under Section 362(d)(4) is therefore warranted and required in both cases.”

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.