It’s Set When It’s Set, Says Anderson Bankruptcy Lawyer

August 4, 2012 12:21 am Published by

Indiana bankruptcy information – it’s the same and yet it’s different with each individual situation. That’s why, even with more than 25 years’ experience offering Indiana bankruptcy help, I like to follow court rulings from around the country, to see the ever-evolving ways courts deal with individual bankruptcy cases.

Would you believe, the majority of clients who seek the help of the good bankruptcy attorneys who work in the five Zuckerberg bankruptcy law offices are female?  That’s one of the reasons an April 2012 Massachusetts bankruptcy case involving a female debtor caught my attention in Consumer Bankruptcy News:
 

  • M. filed a petition for a debt repayment plan under Chapter 13 bankruptcy law.
     
  • M.’s home had three mortgages on it (a first mortgage and two secondary liens).
     
  • M. wanted to have the two secondary mortgages treated as unsecured debts. (I’ve often explained to clients and Bankruptcy in Indiana readers that home equity loans can be discharged as part of bankruptcy, freeing up money for the homeowner to continue mortgage payments and help stop foreclosure.)
     
  • The bankruptcy court ruled that the two second mortgages could be “stripped” and treated as dischargeable only if the home was worth less than the amount of the primary mortgage.
     
  • The big question was WHEN?  In fact, when M. first filed, her home was worth more than it was at the time the bankruptcy was confirmed. In the weeks following, real estate values continued to decline. (One of the principles I often stress is that timing can be everything when it comes to filing personal bankruptcy in Indiana!)
     
  • The ruling was that the market value of the home had to be judged as of the date the bankruptcy plan was confirmed.


The lesson here, as my colleague the Columbus bankruptcy lawyer pointed out, is that everything is measured and valued based on a bankruptcy plan’s effective date.

 

 

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This post was written by Mark Zuckerberg

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