Category Archives: Bankruptcy Planning

Social Security and Bankruptcy

Social Security income in bankruptcy should be a well-settled issue now in bankruptcy court.  Social Security benefits do not count as income.  Several US Circuit Courts of Appeals have held that the debtor does not have to use Social Security income to pay creditors during a chapter 13 plan.  Social Security income does not count as “projected disposable income”. I have filed several chapter 7 cases even though the debtor’s actual budget shows that he or she could make payments to creditors.   I have not received any objections until recently in one case.  The US Trustee claimed that the ability to pay was a basis to contest in a chapter 7 even though the ability was based on social security.  Ultimately, the US Trustee withdrew its motion to dismiss.  There remains a possibility the US Trustee could object in a future case.  There have been no rulings in the…
Read More »

Posted in Bankruptcy Information, Bankruptcy Planning | Tagged | Leave a comment

11th Circuit Says No Chapter 20 Lien Strip: Binding Authority?

Suppose a debtor has already filed chapter 7 and discharged his or her debts.  The debtor then files a chapter 13 and attempts to strip off a second mortgage. There have been differing opinions across the country, but locally the judges in the Southern District of Florida have said no.   A debtor who is not eligible to receive a discharge cannot strip a second mortgage. On October 29, 2013 the 11th Circuit held that the lien strip cannot take place in a Chapter 13 after the chapter 7 discharge.  The issue now seems resolved within this circuit which includes Florida-or does it?  See In re Colbourne, 2013 WL 5789159, 2013 US App Lexis 22011.  Colbourne is another unpublished opinion by the 11th Circuit which does not create binding precedent, though should be persuasive.  Also, the case involved non-homestead property.  The court expressly stated that it was not ruling as to junior liens…
Read More »

Posted in Bankruptcy Cases and Laws, Bankruptcy Planning, Chapter 13, Uncategorized | Tagged | Leave a comment

Debt on Stripped Association Liens May Survive When Condo Sold

Though Fort Lauderdale chapter 13 cases routinely enable a debtor to strip the association lien for the amounts due prior to the filing of the bankruptcy, a recent case limits the benefit of eliminating the lien.  This lien stripping of association liens seems to be well settled law amongst the bankruptcy judges in Florida.  Thus a debtor who is way behind to his association, and might be on the eve of foreclosure with the association, can file chapter 13 and eliminate that lien if the property is worth less then the balance of the first mortgage.  (Note that if the association cannot be stripped, the debtor can still pay the arrears plus the current fees over 5 years.) The debtor would continue to owe monthly payments on the current association fees as long as the debtor remains on title. Associations have tried to find a legal argument against this lien strip…
Read More »

Posted in Bankruptcy Cases and Laws, Bankruptcy Planning, Chapter 13, Uncategorized | 1 Comment