Category Archives: Chapter 13

Child Support Income and Bankruptcy

Child support income in bankruptcy can raise some tricky issues.  I recently posted a blog on social security and bankruptcy, and there are some related issues.  A recent case may help debtors in chapter 13 not to have to use their child support income. Child support income is included in the chapter 7 means test (unlike social security).  The child support income, together perhaps with other income, might show that the debtor is not eligible for chapter 7 (there is a presumption of abuse).  However, in chapter 13, child support income is deducted from the total income.  This could actually show that the chapter 13 means test would show that no payments are required in the chapter 13 though the chapter 7 means test would require a chapter 13. Bankruptcy attorneys must evaluate not only the means test income, but what I call the “real budget” as reflected on Schedule…
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Fort Lauderdale Bare Legal Title Decision on Real Estate

I successfully represented the debtor in a Fort Lauderdale chapter 13 involving the debtor’s claim that real estate was owned by the debtor merely as bare legal title.     In re Pengos, Case No. 14-13586 DE 64. (Southern District of Florida) Judge Raymond B. Ray held that based on the facts of this case, the debtor who was on the title to real estate only held an interest as bare legal title (so the debtor did not have to include the value of the property in her chapter 13 plan payments).  We submitted clear and convincing evidence that the debtor never had any interest or contributed any funds towards the property.  The debtor merely bought the property in her name to obtain a mortgage while her mother, who was moving to this property, sold  her home and used her funds to payoff the mortgage obtained by the debtor on the…
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Lien Strip in Chapter 13 after Chapter 7 Now Permitted in South Florida: Scantling Decision 11th Circuit

Debtors may now strip off a second mortgage in a chapter 13 even after filing a chapter 7 in Fort Lauderdale chapter 13 cases and other South Florida chapter 13 bankruptcies.   This has been an issue across the country.  In South Florida, the local bankruptcy judges have ruled that a debtor could not eliminate junior mortgage liens after obtaining a chapter 7 discharge.  However, the 11th Circuit Court of Appeals today ruled today in the Scantling case that debtors can eliminate junior liens even in the so-called chapter 20, filing a chapter 13 after a chapter 7. This means that debtors who filed chapter 7 and are not eligible now to file bankruptcy again to obtain a discharge nevertheless can file a chapter 13 to eliminate second mortgages. I would like to thank Patrick Scott for sending me the following analysis: “Jeff Kuntz of my office shared with me today’s new…
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