Question Liens remove in Chapter 7?

[revitup]

I have just filed Chapter 7 to stay foreclosure sale and allow my DCA appeal against the lender to proceed. My goal is to save my home which is burdened by a total of four liens. Three of these liens were incurred by my ex husband before he left and my total debt is around $150k. I understand that Chapter 13 will allow me to redeem my property by paying off the senior lien and removing the others, but I have also heard the same might be possible in this district of Northern Florida by remaining in Chapter 7. The court has scheduled the creditors 341 meeting in mid July, the day after my initial brief is due in the appeal court to prove lack of jurisdiction. Should I just go to the meeting .and explain the situation then or file for a time extension now? I have no problem with the means test and cannot afford representation. Any advice on switching to 13 also appreciated

[justbroke]

Did you file with an attorney? You should have already worked out your strategy before you filed. It is true that in the 11th Circuit, which includes Florida, Folendore still controls which allows strip offs of "wholly unsecured" junior liens from a principle residence. You would file a Motion to Strip Lien (in Chapter 7). Some judges within the Florida Districts also allow negative noticing, so you could do this on a 30-day negative notice. You would need to follow the local procedure for such, as some courts require that there is a Claim actually filed (which you could file on behalf of the creditor).

You need to be very careful. A Chapter 7 cannot be simply dismissed. If there is property that the Trustee can administer, that Trustee will object to any dismissal. Of course, you can convert to a Chapter 13, but I don't know why you are thinking of changing Chapters at this time. The strategy of which Chapter should have been worked out prior to filing. In fact, if you only used bankruptcy to stay a foreclosure, then you probably don't have a good strategy and may find yourself in a very bad position.

If you have issues with your divorce decree and you're appealing to the (Florida) Distirct Court of Appeals (DCA), then this is really getting complex. Are you appealing a decision of the lower (family) court in which they found that your ex-spouse is not liable on that old debt?

[revitup]

Thanks JustBroke

Thanks for your reply and to answer your question, no, I cannot afford an attorney or find a pro bono one in this small town. You are correct in thinking the bankruptcy stay was to work with the appeal, which incidentally, is because I was never served properly and the lender does not have standing to prosecute a lawsuit in Florida. I wish to continue with the bankruptcy but want to redeem the house at a figure the dca will decide. I have arranged a pay off loan for this. I am vague on which loans may be removed but really just want to go for the best code to release my home. This is my main concern

Did you file with an attorney? You should have already worked out your strategy before you filed. It is true that in the 11th Circuit, which includes Florida, Folendore still controls which allows strip offs of "wholly unsecured" junior liens from a principle residence. You would file a Motion to Strip Lien (in Chapter 7). Some judges within the Florida Districts also allow negative noticing, so you could do this on a 30-day negative notice. You would need to follow the local procedure for such, as some courts require that there is a Claim actually filed (which you could file on behalf of the creditor).

You need to be very careful. A Chapter 7 cannot be simply dismissed. If there is property that the Trustee can administer, that Trustee will object to any dismissal. Of course, you can convert to a Chapter 13, but I don't know why you are thinking of changing Chapters at this time. The strategy of which Chapter should have been worked out prior to filing. In fact, if you only used bankruptcy to stay a foreclosure, then you probably don't have a good strategy and may find yourself in a very bad position.

If you have issues with your divorce decree and you're appealing to the (Florida) Distirct Court of Appeals (DCA), then this is really getting complex. Are you appealing a decision of the lower (family) court in which they found that your ex-spouse is not liable on that old debt?

[justbroke]

Has the home already been foreclosed upon? There was a recent case out of a Florida Bankruptcy court regarding redemption after foreclosure, by using the bankruptcy process to stay the issuance of the title and allowing the debtor to cure the arrears in the bankruptcy. The answer is probably not what you want to hear. The debtor lost that battle. (I apologize, but I can't find the case but I read it recently.)

Of course, if you are talking about a service defect, that's another story. However, you word it as not served "properly". Did you have knowledge of the lawsuit? Is there caselaw that suggests that "constructive" notice is not enough? Just wondering.

You are in the deep end of the pool. I wish you luck!

[despritfreya]

Revitup,

You really need a lawyer. A Chapter 7 is not going to help you save your home if you are behind in payments to any lien holders that are not completely, 100% underwater.

1. You are dealing with an appeal. That means you already lost your argument at the trial level.

2. You do not "redeem" the house in a Chapter 13. In a Chapter 13 you "cure and maintain" while having the ability to strip off any fully unsecured junior liens.

3. You indicate that the debt against your residence is $150k but you do not tell us how much is owed to each lien holder and you do not tell us what the property is worth. Before we can really attempt to assist we need to know these details.

Des.

[justbroke]

I would also suggest you look at the Stoppa Law blog. He's a Florida foreclosure defense attorney and a good one. He references many cases where pro-se debtors have had significant issues.

As Des writes, you have many other "technical" issues.

[revitup]

Thanks to Des and Just Broke

Point taken 100% Des believe me. I am familiar with Mr Stoppa Just Broke and as you say it appears he is the best there is. Retainers are my problem and in this area a $3000 retainer is quoted to get your foot in the door. The house is worth $100k or it would be if the repairs and the un permitted structures were not there. The senior lien is $98k and I am relying on an appraisal coming in below that when the necessary remedial work is done (removing structures etc). The second mortgage is 27k and the two others are flaky ($4K FOR CHILD SUPPORT for me UNPAID AND $14K FOR OFFICE FURNITURE HE BOUGHT AFTER DIVORCE) I have access for a loan to pay off the entire $98k if the court agreed, hence my dilemma about ch 7 or convert to ch13. I agree that a dca appeal without an attorney is also a long shot but I wasn't listened to at all in circuit court so you never know; lack of service and legal standing are something the loan servicer will have to explain, although I am sure they will find a way around it. That said, I was resigned to losing my home and used the automatic stay to delay the sale. Its only when I began to read up on all of this that I began to get hope back that I could keep the home. Yes there is case law about not going straight to constructive service when there is no affidavit of diligent search. I will dig it out for the appeal anyway so be happy to forward it when I find it. Another big problem if "bad advice." One attorney told me the appeal is stopped by the Ch 7 (Filed 2 weeks ago My 16) which I gather is inaccurate, however I do wonder if there is a time limit for me to transfer from Ch 7 to Ch 13 if thats my best course.