Hello! New to This Forum

[Albrecht62]

Glad to learn about you and impressed with the knowledge and willingness of your contributors!

Looked over the previous threads

Didn't see any that were similar to my situation, but forgive me if I missed some where this sort of thing was discussed before

Quick Version:

Filed for Ch 13 to halt Foreclosure proceedings on my home

It's completely paid off and nearly current on property taxes, but our City Government foreclosed on it for unpaid Code Violations.

Got through the initial steps of Ch 13

• Narrowly escaped the Public Auction (by a of couple hours!!!) :/
• Managed to file several years of delinquent tax returns in time
• Been keeping up with the monthly payments

But now the Trustee is threatening to dismiss the case because I have not been able to demonstrate a credible plan yet for making the necessary repairs, which is the primary concern of the City. [Estimates range from $16k to $30k]

My credit is "shot" – that's why I'm declaring Bankruptcy – or I'd have financed the necessary repairs long ago and/or paid any legitimate fines.

My questions:

1. Are there ways of securing financing – to show a good faith attempt to comply with the City's and Trustee's expectations?
2. Will the Trustee approve incurring new debt?
3. How do I get my Attorney to really advocate for me in this situation? Rather than relieving much of the stress, she regularly warns me that the Bankruptcy Courts do not look kindly on attorneys who accept cases that are not filed in good faith and waste the time and resources of the Courts.
4. Am I S.O.L. in this case or what are my options?

Thanks!

[justbroke]

Glad to learn about you and impressed with the knowledge and willingness of your contributors!

Welcome to BKForum.

I see that you list Florida as your state. I wonder if despritfreya has any ideas on this.

Are there ways of securing financing – to show a good faith attempt to comply with the City's and Trustee's expectations?

You would need to qualify for financing based on your ability to prove creditworthiness. There may be some options, but they are likely severely limited. Have you considered an FHA 203K loan? The problem is that you're now in bankruptcy and you need to be 1 year into a Chapter 13 to get an FHA loan. It would be difficult to get the rehab loan since it would be a manual underwriting, you'd still need a 580+ score (620 for some creditors), and would need to prove that you can make the new payments and be under any DTI requirements.

Will the Trustee approve incurring new debt?

A Chapter 13 Trustee may approve incurring new debt if the plan can afford it and it's in the best interest of the plan and debtor. Chapter 13 Trustees approve new debt all the time (typically cars and even a new home). However, you still have the issue from your first question; could you otherwise qualify for a loan.

How do I get my Attorney to really advocate for me in this situation? Rather than relieving much of the stress, she regularly warns me that the Bankruptcy Courts do not look kindly on attorneys who accept cases that are not filed in good faith and waste the time and resources of the Courts.

Yes. If your case is "infeasible" then that would be bad faith. Many people have used a Chapter 13 to stave off a foreclosure with no intention of ever completing or being in a Chapter 13. It got so bad that in 2005 the bankruptcy code was revamped under the BAPCPA to throw up barriers to repeat filers.

If your plan is infeasible, it's infeasible. The attorney can't advocate FOR an infeasible plan.

Am I S.O.L. in this case or what are my options?

As you know, you have few options. You did try to use Chapter 13 to save property, which is perfectly fine. The issue is that you don't appear to have a feasible plan to satisfy the government's health/safety issues with the home and you don't seem to have the ability to meet the financial requirements to fix those issues.

The fines themselves are not the issues since they could be discharged. The issue is with the government's regulatory concerns with the state of the home. For that, I have no answer if you cannot obtain financing to correct the problem.

[despritfreya]

Your post is confusing. In one sentence you state "but our City Government foreclosed on it for unpaid Code Violations" but in the next you state that you "Narrowly escaped the Public Auction (by a of couple hours!!!)" Which is it?

If the foreclosure was completed and, assuming under Florida law, you lost all strings to the property, the bankruptcy will not help you.

As to the City Code violations, if you cannot fix the problems you will lose. There is no automatic stay as it relates to a government's right to enforce its regulatory power. See 11 USC 362(b)(4).

Your attny's concern over a bad faith filing probably deals with your continued violation of the City Code and inability to fix the violation quickly. Assuming I am correct I fully understand the attny's concern. Bankruptcy is not set up to allow one to continue to violate such a regulation while the property owner tries to find money to fix the problem.

Sorry to sound harsh about this but I have dealt with this exact issue. In the case I handled, the judge did not boot the case out as a bad faith filing since there were other issues my client had to deal with. However, he did give the County the ability to take possession of the property as the property was in a condition that was a danger to the general public.

As to getting a loan. . . try friends, family or maybe even a hard money lender but you need to do it fast.

Des.

[Albrecht62]

Thanks Des and Just for replying so promptly to my questions. I will act accordingly.