Ride-Through Remains Available for Mortgages

December 4, 2015

Upon completion of a Chapter 7 bankruptcy proceeding a debtor receives a discharge of his/her debts. However, there is an exception to this rule.

A reaffirmation agreement is a post petition agreement between the individual Chapter 7 debtor and a creditor in which the debtor agrees to pay a pre-petition debt to the creditor in order to retain the property subject to the creditor’s security interest. By entering into a reaffirmation agreement, the debtor now gives up the right to have the debt discharged through bankruptcy. Therefore, counsel for debtors must carefully consider whether a reaffirmation agreement is appropriate in each situation and advise clients accordingly.

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Chapter 12 Bankruptcy

Chapter 12 bankruptcy allows "family farmers" or "family fishermen" with "regular annual income" to file for a specific kind of bankruptcy protection. Chapter 12 bankruptcy allows farmers faced with financial difficulties to propose a plan to repay their debts.  Chapter 12 plans may propose to pay all debt, but often propose to pay a portion of the debt over a period of time.  Under Chapter 12, farmers pay obligations through installments over a typical time period of three to five years with payments that include all of the  disposable income.

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Rebuilding Your Credit after Bankruptcy – Keep It Simple

November 19, 2015

Many clients come to see us concerned about fixing their credit, or with fears that bankruptcy will destroy their ability to get a car loan, a mortgage, rent an apartment, or insurance.  When it comes to credit repair, there is no secret formula to make all your previous debts disappear, and suddenly show a nice, clean credit report.  That being said, there are some important considerations in how to improve your credit score, and some significant pitfalls to avoid.

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Closing the Door to the Perfect Home - Bankruptcy

November 16, 2015

 

What does a purchaser do when he or she is about to close on the perfect house, but the seller files for bankruptcy? The options for the purchaser are limited, largely because of 11 USC 365. 11 USC 365 provides that a debtor-in-possession or a trustee may assume or reject any executory contract. “Rejection denies the right of the contracting creditor to require the bankrupt estate to specifically perform the . . . executory portions of the contract. Rejection also limits the creditor’s claim to damages for breach of contract.” Leasing Serv Corp v First Tenn Bank Nat'l Ass'n, 826 F2d 434, 436 (6th Cir., 1987). In other words, a purchaser may have a claim for damages – costs of finding another perfect house. However, a purchaser cannot request specific performance of the contract.

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Special Protection for a Marital Home in Michigan

November 12, 2015

Protecting your home in a bankruptcy can be a big concern. If there is too much equity to qualify the house as exempt, the trustee can sell the house and use the un-exempt proceeds to pay creditors. Michigan is one of the states that allows for a special type of joint tenancy between a husband and a wife called a tenancy by the entirety. In a bankruptcy context, this may allow a couple to protect their home by giving them a much larger exemption amount, avoiding this equity problem.

marital home

A recent court case even allowed the entireties exemption for a debtor whose husband had died after the filing of the case, eliminating the tenancy by the entirety.

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Michigan Driver Responsibility

November 9, 2015

The State of Michigan has claimed that the purpose of the Driver Responsibility Law is to encourage traffic safety by deterring dangerous traffic behavior.  However, Driver’s Responsibility Fees can often result in thousands of dollars of obligations to the State. The Department of Treasury can take collection action if payments aren’t set up and made timely including income tax offsets, wage levies, bank account levies or levies on any other assets.  This is when a bankruptcy may be helpful.

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Best Law Firms 2016

November 4, 2015

We are pleased to announce

Keller & Almassian, PLC

has received ranking in the

2016 Edition of U.S. News - Best Lawyers

“Best Law Firms.”

blf-badge-2016

Land Contracts in Bankruptcy

November 03, 2015

Purchasing property on a land sale contract is fairly straightforward. The buyer (vendee) provides the seller (vendor) with a down payment for the home and the seller acts as the bank, financing the balance of the purchase price. Thereafter, the buyer continually makes monthly payments until the land contract is satisfied.

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Business Bankruptcy

October 29, 2015

Small business debtors are faced with a challenge when attempting to confirm a business bankruptcy plan under Chapter 11 of the Bankruptcy Code. Satisfying the “new value” exception to the “absolute priority rule” by providing value money or money’s worth to the Debtor can be a difficult test. 11 USC 1129 addresses confirmation of a chapter 11 plan. 11 USC 1129(a) states, in relevant part:      

(a) The court shall confirm a plan only if all of the following requirements are met:

* * *

(8) With respect to each class of claims or interests —

(A) such class has accepted the plan; or

(B) such class is not impaired under the plan.

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