Ch13 100% + 2 rental Properties

[ToledoTek]

Consulting 2 different lawyers now but wanted to ask community.

Situation:
-12 year marriage - ran up debt to 90k but total owed now is only $60k on my end.
-Own 2 rental properties that are paid in full - together worth $175k (House 1=$110 + House 2=65k) BUT they are not mine. They are my mothers that were placed in my name 5 years ago. I do not pay anything on them nor do i collect anything from them. She takes care of all income/expenses...i see none of this. --- but as i understand because they are in my name, that's all that matters to the court and they will probably penalize me in some way.
-Divorced now
-I rent at 3rd location
-high income puts me in only Chapter 13 100% category according to both lawyers.

Question:
-Amount they would put into the 5 year plan would only be $60k? or would I have to pay $115k (different of rental properties minus debt)?
-Would it be smarter to just remove renter from location worth more and make that my primary residences?

One lawyer is saying since the properties aren't being paid by you and you can prove it, then they shouldn't be an issue getting exempt. Other lawyer is saying they will definitely be put into the plan.

Anyone have similar situation that could give me some insight?

Thank you guys!

[Carmella]

I am not an expert, but if the house is in your name isn't it legally your house? I think the trustee would question why did your mom put her houses into your name 5 yrs ago? Was that to protect assets? Was that her way of gifting them to you now instead of having an inheritance? The attorneys in your area should know the law or how the trustee has dealt with this issue in the past. Like I said I am not an expert, but you could sell the one house that is worth less and practically pay off your debt.

Maybe you need to ask a 3rd attorney and don't tell him what the other two had said to get his most unbiased opinion.

[ToledoTek]

Thank you Carmella for reply!
Yeah...lawyer 2 basically said, your name then your house. He also said the trustee will be the end all decision. I'm just worried if they're going to make me pay 60k or if they're going to make me pay 115k because the value of the houses are more than the debt owed that's the part that seems to be different between the two lawyers.

[despritfreya]

1. In a 100% repayment plan you pay all allowed claims in full - nothing more, nothing less. If you owe $60k in unsecured debt and all creditors file timely claims you will pay $60k plus the Trustee's fee (up to 10%) plus your attorney's fees. If you have secured debt such as a vehicle you will probably pay that also. Same thing with back taxes.

2. The 1st attny is telling you that you have a legal interest in the properties but no equitable interest therefore, you being on title is not a big deal. This is typically my approach in Arizona - bare legal title means there is no value to the bk estate.

The other attny is telling you that whether or not you have an equitable interest in the property does not matter.

Which position is correct will turn on state law and bankruptcy court decisions in your district. For example, North Carolina state law (or maybe it's SC - don't remember) does not distinguish between holding legal title but not having an equitable interest. If you are on title the property is yours.

The title to the properties is not a big deal if your income will force you into a 100% Plan regardless of any non-exempt property you may "own".

Des.

[ToledoTek]

despritfreya that's what i'm looking for...I should only be paying max 60k plus fees! Thank you so much for your reply! Attorney #2 mentioned that in my district that I will be filing in...normally doesn't distinguish between holding legal title and equitable interest. yeah unsecured is 60k. Plus a car and motorcycle that are both paid off. Thank you again!!

[justbroke]

The Florida Trustees will go after anything with your name on it. It's just their favorite sport. (I say that tongue in cheek, but it seems to be true in Chapter 7 cases.). Despritfreya conveyed all that you need to know. The question is about whether you're in a 100% plan because of income and that seems to be the case just due to your income.

[ToledoTek]

Thank you guys! Forgot i had another question... justbrokedespritfreya What about TDI in a 100% plan. Do they still figure out all the expenses and say approved i have $3000 left over TDI will they pursue that amount monthly or is it normally unsecured debt/60 +10% Trustee Fee+ Attorney fee putting the amount closer to $1200 monthly.

[justbroke]

In a 100% plan, you pay your plan base divided by the number of months of your plan. For example, in a 5 year 100% plan, with a plan base of $120,000, you would pay $2,000/month for those months. No other money matters. If you actually earn $12,000/month from a job or other income, your payment will still be $2,000/month for 60 months. While some Trustees and even debtor attorneys may suggest that you try to pay your "actual" disposable monthly income (DMI), there is nothing in the code which requires this. In fact, I suggest that debtors reject that idea.

That's my opinion on that because why would you not save money rather than take a chance that your Chapter 13 is successful. I want every Chapter 13 debtor to be successful and the statistics are proving that more are getting through a Chapter 13 (more than 50% now compared with < 40% prior to around 2018). The fact is that in a 100% plan you are not required to commit your DMI. You are only required to pay 100% of the allowed secured claims, plus all the priority, secured and other fees over your commitment period (typically 36 or 60 months).

I think you means DMI and not TDI (temporary disability income). I believe that my response in the two paragraphs preceding this one, explain the "excess" income over the amount necessary to pay 100%.

[Jsbk]

I’m in a similar situation with the rental owned by my mother, title has my name. But I have zero to do with the property, Lawyer says we’ll have to see what they say. My mom did it for estate planning purposes, she thought she was being smart but it’s not great for me now. My court date is tomorrow!

[ToledoTek]

justbroke Thank you for the help!

[ToledoTek]

Jsbk Good luck with the case!

[Jsbk]

Thanks, we might need it. The trustee’s attorney questioned the property and said he wanted to speak to my attorney afterwards, he also muttered something about a case just like this happened and the other attorney didn’t go for it. Not sure what all this means, but now we wait to see :/