Surrender and Vesting: Shedding the Underwater House

By The Honorable Robert E. Nugent, Chief United States Bankruptcy Judge, District of Kansas (Wichita)

Even before the financial crisis of 2008, home mortgage holders didn’t always hurry to foreclose on and take possession of defaulting debtors’ homes. For reasons of rational economics (or, sometimes, simple inertia), lenders didn’t want their collateral back, even when debtors wanted to give it to them. This left homeowners (and particularly condominium or townhouse owners) saddled with continuing liability for upkeep, common area maintenance, homeowners’ association assessments, or ad valorem property taxes. Not even bankruptcy protected the owners from continued . . .

It looks like you are not signed in or registered! This content is only available to members.

Or Sign In Below:

No Author Biography has been linked to this Article.

From the Editor

March 31, 2019

By Wm. Houston Brown, United States Bankruptcy Judge (Retired) Lien Modification - Modification of mortgage on mixed-use property. Reviewing the split of authority on whether a Chapter 13 debtor may modify a mortgage on property used for both business and residential purposes and when the use determination is made, the bankruptcy court adopted the filing date as the appropriate time...

Members

Passing of a Legend

June 13, 2021

By Kara L. West, CPA, Chapter 12/13 Standing Trustee for the Eastern District of Tennessee (Chattanooga); Successor Trustee to C. Kenneth Still C. Kenneth Still was a legend. “Always with Barbara at this side, he epitomized qualities I think we all seek—honesty, diligence, kindness, and patience. He was a great mentor and a quick wit, and I miss him already....

The Collector

The Academy

January 14, 2024

Bankruptcy Judge (E.D. Washington) serves up classics with wooden tennis racket collection.

“Lien Stripping” Based on Claim Disallowance by Default: Ninth Circuit Clarifies its Rule

June 7, 2020

By Lawrence R. Ahern III, Brown & Ahern (Nashville, TN) Introduction Chapter 13 practitioners certainly do not need to be told that a lender with a mortgage1 on the debtor's principal residence has a special position in a Chapter 13 case. A chapter 13 plan may "modify the rights of holders of secured claims, other than a claim secured only...

Members

Safeguarding the Promise of a Fresh Start: Utilizing RESPA to Challenge Mortgage Servicing Errors Post-Discharge

Stephen F. Relyea

July 10, 2022

For many of the consumer debtors my firm represents, the primary purpose of filing bankruptcy is to save their home or other real estate from being foreclosed upon by their mortgage servicer. We help those debtors file and comply with chapter 13 plans that propose to resolve their defaulted mortgages in a variety of ways, which might include curing pre-petition...

Members

When Wishes Come True

September 19, 2021

By Helen M. Morris, Chapter 13 Standing Trustee for the Northern and Southern Districts of West Virginia Like most trustees, my case load is down, and I’ve been actively encouraging new filings. Perhaps too enthusiastically as certain new cases reflect. A bankruptcy filer who has been dormant for months filed a new case recently. Schedule A is clearly marked with...

Members

Critical Case Comment – Gotta’ Be Purchase Money to Get the Deduction

Henry E. Hildebrand, III

October 15, 2023

A little bit for everyone in this case . . .In calculating above-median income debtor’s projected disposable income, Chapter 13 debtor may not deduct the “ownership allowance” for transportation expenses if the secured debt in question is secured by a nonpurchase money security interest in a motor vehicle.

Members

From the Editor

March 24, 2019

By Wm. Houston Brown, United States Bankruptcy Judge (Retired) Discharge - Direct mortgage payments unpaid by debtor were not “provided for” in plan. The confirmed plan stated that the debtor would directly pay two home mortgages to the credit union, but there was no specification of payment terms or other treatment of those mortgages. At the time of confirmation, the...

Members

Critical Case Comment

June 27, 2021

By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) It constitutes an unfair discrimination, violative of 11 U.S.C. § 1322(b)(1), for a Chapter 13 plan which would pay more to a student loan than to the remaining general unsecured creditors. (Somers) In re Kane, 603 B.R. 491 (Bankr. C.D. Kan. June 18, 2019) Case Summary Ronald Kane filed...

Members

2022 Bankruptcy Procedure Year in Review: Revised Statute and Rules and Selected Cases – Part 7 Selected Decisions Under Parts I and II of the Federal Rules of Bankruptcy Procedure

Lawrence R. Ahern, III

March 26, 2023

Introduction Amendments to 16 rules and new one new rule took effect December 1, 2022. Many reflected changes necessitated by the Small Business Reorganization Act of 2019 (SBRA),1 and had been in place in the same or similar form on an interim basis since that legislation took effect. Part 1 of this series summarized 2022 . . . It looks...

Members