What is lien stripping? This is an interesting topic for those looking into or exiting a Chapter 13 bankruptcy. There is an application you can use to request to remove a judicial lien against your property. In addition, this can also be used to eliminate a second mortgage or home equity line of credit that you took out on your property. This process helps you further eliminate and reduce your debts, so you can get back to your normal life quickly. A judicial lien is used in cases where you owe tax arrears or when a creditor places a lien for payment due to construction costs or costs associated with the development of your property. This lien automatically attaches to your home, making it difficult to sell or use your home in the way you would want to. By filing a Chapter 13 bankruptcy petition, you can work out a plan to repay your debt in a way that will allow for the removal of the lien. You may also then file an application to have the lien removed from your home. In fact, once Chapter 13 bankruptcy is provided to you, the protection means that you will automatically have… Continue reading
As a person struggling with options due to debt, the last thing you want to have to do is give up your home. For some people in New York, that was a very real threat, even though they were on rent-stabilized leases. Now, a Nov. 20 report shows that these leases are exemptions; that means those in their leased homes won’t have to give them up. This decision was made with millions of people in mind; in fact, New York State’s highest court has ruled to say that leases for rent-regulated properties must be bankruptcy exempt. Why? These properties are public benefits, and that means they can’t be seized as an asset in a personal bankruptcy. The ruling won 5-to-2 in the Court of Appeals. A rent-stabilized lease is a public assistance benefit, just like unemployment or disability payments, which are also off limits tobankruptcy courts. The case that brought this issue to the forefront included an 80-year-old woman whose landlord offered to buy her rent-stabilized lease and to give her the money to pay off her debt. Her debt, which was only $23,000, would have been covered, but her lawyers were worried that she would eventually be evicted from… Continue reading
Chapter 11 laws have been in the news recently, because it’s believed they need to be reformed. One thing that needs to be changed is the way derivatives are treated. In Chapter 11 bankruptcy, there are provisions that allow the derivativesto be excluded from the operations of the bankruptcy code. Instead of allowing the person going through the bankruptcy to make decisions about these derivatives on his or her own, the option instead goes to creditors; they may decide not to allow the contract with the debtor to continue even if it was left in decent standing. Several new recommendations have moved on to the American Bankruptcy Institute’s Chapter 11 Reform Commission and aim to change the way derivatives are treated under the bankruptcy code. One is to narrow the scope of Section 546 (e), which protects settlement payments. It’s been requested to reduce the section’s applicability to leveraged buyouts. It’s been requested to narrow the scope of repo safe harbors, too, in several circumstances. What all this means is that trying to protect a person or business’s right to derivatives has been an issue in the past that needs to be cleared up. If a debtor of any kind… Continue reading
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