Search Public Records

Chapter 7 Trustees Attacking Debtors' Right To Stay Put In Their Upside Down Homestead Property

The Florida Supreme Court’s expanded debtor’s $4,000 wildcard exemption earlier this year giving debtors substantially more exemptions to apply to their cars and personal property. Any debtor who does not need to use their homestead exemption can take the wildcard exemption; joint debtors have a combined additional $8,000 of available exemptions.

Chapter 7 bankruptcy trustees get compensated based upon the amount of non-exempt assets they capture and administer in the bankruptcy estate. The more that courts expand debtor exemptions the less property is available for trustees. Trustee pay goes down.. The wildcard exemption expansion is not good for bankruptcy trustees.

In today’s real estate market, most bankruptcy debtors live in upside down homestead properties. The debtor does not have to be current on his mortgage to stay in his house during bankruptcy, and a large percentage of Chapter 7 debtors, being in financial trouble for one reason or another, will remain in possession of their upside down house, default on their mortgage, and also claim the wildcard exemption because they have no homestead equity. Such debtor who defends a mortgage foreclosure case in state court can remain in their home for a year or more during and after filing bankruptcy. When a debtor does not claim homestead exemption on an upside down house in order to get the wildcard exemption the debtor is betting that the Chapter 7 trustee will not attempt to administer the homestead because there is no value for creditors.

Many of the bankruptcy trustees are trying to obtain money for the bankruptcy estate of debtors who want to remain in their upside down homes while claiming the wildcard exemption.. For example, I have heard one trustee who sold the bankruptcy estate’s rights such a home to a third party investor. The investor acquires title subject to the mortgage in default. The bankruptcy debtor becomes a tenant. The investor can charge the debtor rent, or evict the debtor and find a higher paying tenant. The investor can fight the foreclosure and collect rents while fighting with the bank.

Another possibility is for a trustee to sell the estate’s ownership to the mortgage lender. This lender is facing a long and expensive foreclosure battle with the defiant debtor. If the mortgage lender buys the trustee’s ownership position the lender can take immediate possession and eliminate the debtor’s foreclosure defenses. Trustees may have difficulty explaining this plan to a mortgage lender and then getting approval from the lender’s bureaucracy.

If bankruptcy trustees and bank work together they can fight back against debtors trying to “surrender” a house to maximize exemptions and also squat in the house to maximize free living during a foreclosure.

As far as I know, none of these trustee tactics to get money from the upside down homeowner has been tested in court. Most bankruptcy debtors do not have the financial resources to pay their attorney to litigate this type of issue. The debtors usually decide to pay the trustee money or cooperate with the trustees efforts to sell the trustee’s interest in the homestead rather than pay an attorney to fight the issue in court.

Samuel Wilkins, Douglas Wilson, Darren Perez, Robert Carlson, Raymond Moreno, Robert Williams, Jeffrey Clark, Joseph Hale, James Barnes, Robert Brown, Chris Wilson, James Wheeler, John Watson, Sean Ramirez, Douglas Turner, Jack Ortiz, William Greene, James Morgan, Ernest Cox, Andrew Phelps, Jose Parks, Richard Hill, Robert Cooper, Joseph Douglas, Richard Scott, Joseph Wilson, Frank Newman, Benjamin Ramirez, James Jordan, Randall Campbell, Ralph Duncan, Christopher Williams, Mark Anderson, Todd Harris, William Ramos, Rafael Jones, Richard Davis, Henry White, Herman James, Robert Mason, Allen Williams, Leo Dixon, Justin Brady, Kevin Fletcher, Ryan Wilson, Michael Mitchell, John Luna, Micheal Smith, William Perez, David Evans, William Reed, James Jackson, Milton Adkins, Roy Fowler, Ralph Gutierrez, Charles Brown, Jack Stephens, George Johnson, Ray Turner, Michael Wise, Tyrone Sanders, Daniel Doyle, Jimmy Perkins, Frank Rivera, Steven Rhodes, Kenneth Jackson, Christian Smith, Everett Sanders, Walter Davis, Jerry Ellis, Ronald King, Andrew Powers, Jonathan Williams, Thomas Adams, Paul Atkins, Danny Welch, Franklin Smith, Patrick Baker, David Perry, James Campbell, Charles Dean, John Hall, Calvin Bush, Leonard Cox, William Smith, Michael Boone, Ryan Baldwin, Juan Anderson, Peter Fuller, Wesley Guzman, Clifford Holmes, David Chapman, James Welch, Seth Martinez, David Castillo, John Montgomery, Hector Miller, Joseph Moreno, Stephen Brooks, Mark Olson, Kenneth Norton, Joseph Williams, Tony Jensen, John Turner, Raymond Davis, Jack Potter, Eddie Harrison, Kevin Hampton, Ralph Nelson, Jeffrey Carter, Daniel Barber, Robert Brown, Roger Greene, George Kelly, Fred Martin, Brett Miller, Thomas Mitchell, John Holmes, Earl Hudson, Norman Figueroa, Donald Farmer, Victor Arnold, Ernest Henderson, John Rodriguez, Joseph Hill, Andre Thompson, Micheal Rowe, Samuel Knight, Lester Howard, Michael Lee, Jose Adams, William Sharp, Darryl Sanders, Jason Patterson, Joseph Vasquez, Ryan Baker, Robert Lewis, Richard Kelley, Christopher Welch, Eugene Martin, Bruce Bell, Kevin Grant, Samuel Wheeler, Kevin Jimenez, Michael Ryan, Robert Williams, Mark Reynolds, Andrew Garcia, Howard Gray, Alan Hopkins, Norman Jenkins, Anthony Cox, Henry Lopez, Kenneth Hicks, Willie Elliott, Frank Allen, Richard Moore, Jim Young, Sam Wells, Luis Williams, Carl Brown, Milton Sharp, Charles Brown, George Thomas, Jesus Gomez, William Sandoval, Joshua Young, Robert Moore, Anthony Anderson, Scott Allen, Harold Payne, James Drake, John Williams, Nelson Joseph, Bryan Armstrong, Benjamin Smith, Brandon Vargas, James Hill, Randall Miller, Ronnie Williams, Jeffrey Fernandez, Leo Moore, Jacob Gonzalez, Shawn Baker, David Hodges, Mark Riley, John Thomas, John Hammond, Edward Peterson, Ronald Collins, Jeff Foster, Robert Hubbard, Robert Allen, Steven Ortega, Jason Dean, Jose Brewer, Kevin Copeland, Jacob Cooper, Raymond Martinez, Albert Fowler, Denise Williams, Katherine McDonald, Mary Carson, Mary Lyons, Vera Simpson, Beverly Stewart, Heather Flores, Janice Pierce, Wanda Williams, Michelle Smith, Carol Palmer, Betty Morrison, Dorothy Ross, Caroline Brown, Elizabeth Sharp, Tiffany Smith, Stacy Black, Lisa Hoffman, Anna Evans, Nellie Perkins, Sandra Stone, Karen Oliver, Maria Mills, Julie Taylor, Gladys Gregory, Doris Davis, Pamela Gibson, Kimberly Hopkins, Jeanette Mitchell, Sara Payne, Karen Williams, Connie Morgan, Mary Lee, Roberta McLaughlin, Martha Carroll, Cynthia Reed, Linda Smith, Wendy Hughes, Leslie King, Margaret Massey, Susan Sanders, Thelma Phillips, Jeanette Davis, Arlene Jenkins, Ida Brown, Terri Robbins, Ruth Taylor, Juanita Williams, Nora Collins, Sandra Mitchell, Julia Martin, Carol Todd, Gladys Sims, Marjorie Steele, Donna Woods, Joanne Schwartz, Stephanie Thomas, Thelma Black, Christine Ramirez, Pamela Mason, Pauline Torres, Betty Brown, Kathleen Watson, Barbara Porter, Kathleen Estrada, Dianne Coleman, Mary Tucker, Vicki Osborne, Ruby Phillips, Tanya White, Karen Craig, Monica Gross, Emma Johnson, Mary Ward, Margaret Elliott, Shannon Ramirez, Mary Marshall, Louise Herrera, Judith Lawson, Viola Dean, Peggy Poole, Melinda Lewis, Anna Elliott, Roberta Douglas, Phyllis Green, Jennifer Cook, Amber Stevens, Martha Jones, Lisa Love, Violet Gomez, Barbara Bryant, Patsy Green, Debra Herrera, Lillian James, Jackie Lindsey, Mary Burke, Patricia Robinson, Margaret Morris, Michele Smith, Leslie Smith, Eileen Carlson, Marjorie Morris, Teresa Long, Sarah Maldonado, Lillian Terry, Vivian Marshall, Margaret Russell, Emily Garcia, Laurie James, Christine Smith, Marjorie Hamilton, Amy Hogan, Patricia Freeman, Mary Stokes, Andrea Walters, Linda Harmon, Jessica Mack, Joy Hogan, Joan Dean, Annette Mills, Debra Bennett, Stephanie Johnson, Sarah Padilla, Irma Brown, Charlene Martin, Theresa Ferguson, Betty Marshall, Clara Thomas, Tracy Green, Angela Williams, Karen Thomas, Michelle Porter, Jennifer Perry, Mary Wilson, Frances Thomas, Amanda Gonzalez, Joy Carter, Sharon Boyd, Deborah Anderson, Judy Flores, Jean Allen, Margaret Cooper, Mary Davis, Donna Smith, Katherine Hill, Monica McKinney, Dorothy Franklin, Anna Ortega, Annie Riley, Maria Perez, Carrie Mitchell, Jean Hill, Samantha Ward, Barbara Russell, Christy Jones, Cindy Taylor, Jennifer Patton, Irma Myers, Marie Tran, Judy Bryant, Tiffany Rhodes, Barbara Diaz, Janet Guerrero, Stephanie Willis, Holly Ford, Michelle Sanchez, Lena Johnson, Tracy Santiago, Sarah Coleman, Violet Anderson, Catherine Lloyd, Carolyn Moore, Sandra Lambert, Vera Hunter, Dana Beck, Yolanda Parker, Shannon Berry, Judy Smith, Irene Williams, Regina Schmidt, Mary Brown, Vivian Newman, Amy Farmer, Deborah Hamilton, Karen Washington, Jenny Wright, Linda Brooks, Christine Hayes, Melissa Cruz, Doris Morgan, Gwendolyn Brooks, Nora Butler, Melissa Perry, Ellen Williams, Elaine Reynolds, Stacey Douglas, Jane Cole, Joan Kelly, Mary Perez, Judith Joseph

Post a Comment