Yes, it will stop repossession and let you put the car loan on a 60 month repayment plan.
Yes, if you file a chapter 13 within 10 days of repossession, you can get the car back.
Yes, it will stop repossession and let you put the car loan on a 60 month repayment plan.
Yes, if you file a chapter 13 within 10 days of repossession, you can get the car back.
In a chapter 13, you may be able to keep it.
In a chapter 7 (at least here in Utah), you will lose it unless you receive and spend it before we file bankruptcy.
MAY 11, 2020 UPDATE: You will not lose it. The Chapter 7 Trustees in Utah have been quietly ignoring it. Three of them have actually been stating on the record that they will not take it from you.
Plan on losing it, but nothing is guaranteed right now.
April 1, 2020 update: In Utah (and most states), the Chapter 13 Trustees have stated that they will not be taking the stimulus money. (See email at bottom of blog entry) At least one Chapter 7 Trustee has already stated that she will definitely take the stimulus checks.
In 2001, President Bush sent out economic stimulus checks of about $300 a person to try to jump start the economy after the .com bubble burst.
In 2008, President Bush sent out economic stimulus checks of about $600 a person to try to help the economy with the sub-prime lending/housing crash.
Today in 2020, there is very strong talk of a stimulus check of at least $1,000 to each adult to help stimulate the economy after the recession effects of the NOVID-19/coronavirus hit.
Throwing bankruptcy into the mix complicates matters. On the day you file bankruptcy, your bankruptcy estate is created. This estate includes all of your personal and real property and your tax refunds. Normally, we can exempt (protect) most of it from the bk trustee. Unfortunately, here in Utah, your tax refund is not safe from a bk trustee, so you need to receive and spend the refund before you go bankrupt, or the trustee can take it and use it to pay your creditors. That stimulus check may (or may not) be part of your bankruptcy estate.
All I know for certain is that if you receive and spend the stimulus before you file bankruptcy, it is gone, and it is not part of your bankruptcy estate.
If you file bankruptcy first, there is a good chance that you will lose the stimulus money to your trustee. It comes down to when your receive the right to receive the stimulus and what the stimulus is tied to. That being said, the only Utah case I found was actually positive for the debtors. In that case, Debtors filed bankruptcy in 2007. The Economic Stimulus Act passed in 2008, and their chapter 7 trustee tried to take that stimulus money when the checks came in. One of our current judges, Judge William T. Thurman, found in favor of the debtors (letting them keep the money). He found that since their right to receive the stimulus money didn’t arise until after their bk was filed, it was not part of the bankruptcy estate. See In Re Andrews, 386. B.R. 871 (Bankr. D. Utah 2008).
This sounds great, because it sounds like the court is saying: if the stimulus package isn’t passed until after you file bk, then you get to keep the money.
However, we have another case out of Kansas (which is admittedly NOT Utah), which forced debtors who had filed bankruptcy in March of 2008 to turn over their stimulus payment from the May 2008 Economic Stimulus Act because the triggering act to receive that stimulus was the filing of their 2007 tax returns. They lost the stimulus because the stimulus money was tied to their 2007 taxes (which occurred before the bk). See In Re Schwinn, 08-10528 (Bankr. D. Kansas 2008).
This doesn’t sound great, because the bk trustee took the money after arguing that it was tied to their taxes from the previous year.
I don’t know how the 2020 stimulus will be worded, but I fear that bk trustees will be salivating and sharpening their knives when those checks go out. Plan on losing it for now, and it you end up getting to keep the check, it’ll seem all the sweeter.
April 2, 2020 update: Here is the email from the Chapter 13 Trustee for Utah:
A number of you have inquired whether the Chapter 13 office will be requiring turnover of stimulus checks received by debtors. For your reference, attached is a copy of the new law as it relates to the Bankruptcy Code amendments. In short, the stimulus payments to debtors are excluded from Current Monthly Income in the same manner as social security payments under the amendments to section 101(10A)(B)(ii). In addition, the stimulus payments are excluded from disposable income under the amendments to section 1325(b)(2). We will not be requiring turnover of stimulus payments received by debtors. Thank you.
This is a changing landscape, so this information may be out-of-date by the time you read it.
President Trump directed HUD (Department of Housing and Urban Development) to suspend foreclosures and evictions through the end of April.
According to the Business Insider, about 6.7 million people live in HUD-provided housing — but over 80 million do not live in HUD housing. See:
Additionally, the FHFA (Federal Housing Finance Agency) is ordering Fannie Mae and Freddie Mac to suspend their foreclosures and evictions for at least 2 months. This covers single family mortgages, home equity conversion mortgages, and reverse mortgages. See:
As for how many people this affects, I don’t know. I called a larger foreclosure law firm, and they have no idea either. On some of their cases, they have been directed (by their mortgage company clients) to do everything up to actually scheduling the foreclosure sale (notice of default, file processing, etc). On other cases, they may be putting everything on hold for the next 2 months. It is really up in the air.
What I can say is that if you fall behind on mortgage payments, you will still have the option of filing a chapter 13 repayment plan to catch up on those payments over a 5 year plan with the bankruptcy court.
Nope, you’re thinking of New York.
In New York, there is a one week moratorium on evictions, and many landlords have pledged that they will not pursue evictions for the next 90 days. See:
In Utah, here’s the short answer: some evictions have been postponed, foreclosures are still going forward, and garnishments and repossessions will continue because they don’t require a hearing.
Long answer: on Friday, March 13, 2020, Utah’s Chief Justice Matthew Durrant directed state court judges to cancel nonessential court hearings. His Order is here:
https://www.utcourts.gov/alerts/docs/20200312%20-%20Pandemic%20Response%20Plan.pdf See also: https://www.utcourts.gov/utc/news/2020/03/14/chief-justice-issues-order-courts-are-open-but-all-non-essential-hearings-are-delayed/
CHIEF JUSTICE ISSUES ORDER COURTS ARE OPEN, BUT ALL NON-ESSENTIAL HEARINGS ARE DELAYED
Salt Lake City, UT— Utah Chief Justice Matthew Durrant has issued a follow-up order to his March 12th order regarding court operation during the pandemic. Today’s order provides the public and the Appellate, District, Juvenile, and Justice courts with more detailed information about court operations in the state during the pandemic. The most important message for the public is that the Courts in the state of Utah are open for business. Effective immediately, however, all non-essential court hearings will be delayed until further notice. The order issued today provides guidance on the types of hearings that are considered essential and will not be delayed. Courts have also taken steps to lessen the spread of the virus by cancelling group gatherings, and by using technology, when possible, to hold essential hearings.
“To be clear, the courts will continue to operate and provide mission-essential functions such as proceedings involving in-custody defendants and protective orders, to name a few,” said Chief Justice Durrant. “Using technology, we will continue to find ways to serve the public while reducing the number of people who need to physically come to court.”
Courts will be open to accept filings. The public can find more information at utcourts.gov on COVID-19. For details on the hearings, please refer to the Administrative Order.
In fact, some district courts, like the Utah 3rd District (which covers Salt Lake, Tooele, and Summit counties), have cancelled jury trials and most hearings, including eviction cases, for the next three weeks. See:
Some are, and more will be.
As of today (March 13, 2020), bankruptcy court hearings will be done by telephone, but 341 Meetings are still done in person (this will change). (5 hours after writing this, I received an email from a chapter 7 trustee cancelling the 341 Meetings for next week).
Here in Utah, the U.S Bankruptcy Court for the District of Utah just sent out an email telling the attorneys that “all hearings scheduled in the Court through April 13, 2020 shall be conducted by telephone.” General Order No.: 20-002. You can click on the link to read the order. The order was accompanied with an email to all bankruptcy attorneys stating:
Urgent: All Hearings to be Conducted by Telephone Due to Concerns of the COVID-19 Virus
Mar 12, 2020, 5:28 PM (15 hours ago)
March 12, 2020, 4:30 PM (MDT) – Due to concerns associated with the spread of the COVID-19 virus, the Court is initiating operational changes to protect the health and safety of the public, bar and the Court. By order of the Court, effective immediately, all matters scheduled through April 13 will be conducted telephonically. Instructions on how parties will make their telephonic appearance will be posted on the Court’s website at http://www.utb.uscourts.gov. In addition, if you are scheduled for an upcoming court appearance, all attorneys and unrepresented parties will be contacted by email, mail, or phone. Parties are encouraged to attempt to resolve matters without the need for court appearances to the greatest extent practicable.
This order helps protect the judiciary and attorneys for court appearances, but unfortunately, most of bankruptcy appearance revolve around the 341 Meeting of Creditors, where 8-20 debtors and creditors meet in a meeting room with their attorneys and the bankruptcy trustee to conduct their 341 Meeting. As of today, the 341 Meeting are still in person. That being said, this morning (March 13, 2020), the Chapter 13 Trustee for Utah Lon Jenkins, just sent out an email sharing the court order above and also advising that:
In addition, the Chapter 13 Office will be working in the coming days to establish a protocol for conducting section 341 meetings remotely to avoid the necessity of large group gatherings.
Thank you for your cooperation during this challenging time.
In other words, those in-person 341 Meetings are probably going to be rescheduled and/or conducted telephonically.
Until then, if you’re worried about exposure to a group of strangers at the 341 Meeting, you should let your attorney know. He should be able to reschedule the meeting until everything gets sorted out. I have a strong hunch that the courts will be signing all of those motions to continue/reschedule almost immediately.
Good luck, and wash your hands.
Update: 5 hours after posting this, I received an email from a chapter 7 trustee stating:
I have just been notified by the US Trustee’s Office that the 341 Meetings scheduled for March 16, 2020 will not be held. The Meetings will be continued and the Court will send notice to all parties in interest. Please notify your clients.
Yes, you can claim the homestead on your mobile home (manufactured home) even if you just rent the lot below it.
The 10th Circuit Bankruptcy Appellate Panel (BAP) actually ruled on this specific issue in
In Re Carlson, 303 B.R. 478 (10th Cir. BAP 2004) . The court held that:
owning the land surrounding a mobile home is not a prerequisite to claiming the mobile home exempt as homestead under Utah law
In other words, your mobile home is the homestead. It doesn’t matter if you are only renting the lot. At least $42,000 of that home’s equity is safe in bankruptcy! (As long as you are on title for the mobile home).
Spend it before you go bankrupt!
Utah has NO exemptions to protect your tax refund when you file bankruptcy. This means that if you go bankrupt before you receive and spend your tax refund, you will lose it. The chapter 7 trustee will take your refund and use it to pay your creditors. On the other hand, if you wait just a little bit to file and receive your refund, you can spend it all before filing bankruptcy.
Just remember to spend it on exempt items.
You can definitely use it to pay your bankruptcy attorney to prepare your case.
Don’t pay off friends or family! Call me if you have any questions on how to spend it. You can even text me on a Saturday at noon as you’re standing in an RC Willey trying to decide if you should purchase the new $800 bunk bed set for the twins (yes, you can). You can text me at 801-787-8860.
The list is below, but you’re always safe with food storage, clothing, washer, dryer, refrigerator, freezer, stove.
Here is a rehash of my post on this same issue last year (and the year before):
It’s that time of year again where I have to answer the phone and tell people that I don’t want their money until February or later because of tax refund season. It makes a lean December/January in our household, but it’s the only way to protect my clients.
(I am cutting and pasting from earlier posts, so please forgive the repeat information).
So let’s say you get your refund February 1, 2016. What do you do?
Better said, what don’t you do:
1. Don’t go buy a new toy like a dirt bike or a tv.
2. Don’t pay off any friends or family. This is a preferential transfer, to an insider no less, and it results in Mom and Dad being sued by the trustee.
So what do you do:
1. Spend it on exempt items under Utah Law. This basically means food, clothing, washer, dryer, fridge, freezer, stove.
(Did you see a computer on the list? No. Don’t ask me if that’s okay. It’s not).
2. And use the rest to pay me.
So let’s say you spend the tax refund on food storage March 1st and keep all of your receipts. When can you file? March 2nd.
Here is a relevant portion of the
An individual is entitlted to an exemption in …
(viii) (A) one:
(I) clothes washer and dryer;
(V) microwave oven; and
(VI) sewing machine;
(B) all carpets in use;
(C) provisions sufficient for 12 months actually provided for individual or family use;
(D) all wearing apparel of every individual and dependent, not including jewelry or furs; and
(E) all beds and bedding for every individual or dependent;
There are other items you can spend the money on, and this is by no means comprehensive, but this should give you a good idea on how to spend it. If you have questions on what to use it for, ask your attorney; that’s what he’s there for.
Basically, you take your home value, subtract your mortgage and your homestead exemption, and if there’s any money left over, judicial liens stay attached to your home. If there’s no money left over, you can remove them or avoid them in a chapter 13 bankruptcy.
This will not be a complicated discussion of the lien avoidance. Here’s the code section we rely on in the Bankruptcy Code section 522(f) :
(f)(1)Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is—(A)a judicial lien, other than a judicial lien that secures a debt of a kind that is specified in section 523(a)(5);
I am also attaching a Lien Avoidance Worksheet that we’re required to use here in Utah. You can find the form here:
Here is the best kind of example I can give you. I am cutting and pasting an email with one of my clients showing my calculations:
Sorry, it was well past my bedtime last night and I didn’t give a good full response.
Here are the numbers:
$127000 — first mortgage
$42,000 — 2nd mortgage
$42,000 — homestead exemption (we can’t claim a double exemption because your wife is not on title)
= $211,000 of the home is safe (protected)
then we get to throw in a proposed 6% realtor’s fees even if someone considered sell it which is another 12,000, so
$223,000 is safe from normal creditors when we figure out repayment plan in the 13.
Stripping Judgment Liens
As for judgment liens, they only attached to your house if the creditor actually takes the judgment and records it with the Utah County Recorder. With these, I cannot claim that extra $12,000 in realtor’s fees if I try to strip them.
If the home is worth less than $211,000 I can strip or remove those judgment liens. That way, if you sell or refinance one day, they never get paid because they are no longer attached.
If the home is worth more than $211,000, the liens could stay attached and would eventually get paid when you sell/refinance.
Judgments that attached and became judgment liens
Here are the judgments that actually filed with the Utah County Recorder and became judgment liens (much less than we thought)
$502.87 Bonneville, attached on 10/16/2017
$6,324.45 Cavalry SPV, attached on 12/13/2018
$1,771.71 Midland, attached 1/29/2019
Judgments that are not attached and are not judgment liens
Here are the judgments that did NOT become judgment liens. These are NOT attached to the home.
Discover — they attached a $12,000 lien on 7/31/2017 and then released it on 11/18/2019 even though they shouldn’t have
Barclays for $8k
Cherrington for $3.5k
What this means is that if the home is worth over $211,000, then Bonneville attaches to the next $502.87 of value, then Cavalry to the next $6,324.34 of value, and then Midland for the next $1,771.71 of value.
As I said, it’s complicated.
Remember: even if a creditor get a judgment again you, it does not automatically attach to your home (here in Utah). After getting the judgment, the creditor still has to go file it with the County Recorder to create a judicial lien against you home.
Sure, but only if you want to lose the home!
In most cases, bankruptcy wipes out your personal liability for debts, including secured debt like mortgages and car loans. However, those secured debts are still secured (attached) to your property. In other words, the mortgage is secured by your home. If you want to keep the home, you still need to pay the debt attached to it. Even if your personal liability is wiped out, they can still come after the property if you stop paying for it.
This morning, I started going through my morning email and saw the following question from a client in a chapter 13 case:
I do not make my monthly payments for my home equity anymore do I? is the home equity not included in the bankruptcy? How am I supposed to afford paying the monthly amount to the trustee, the home equity payment, mortgage, and utility bills?
It’s valid question. The horrible answer is that you have to pay for things if you want to keep them.
Home equity lines of credit (or HELOCS) are confusing to most people. Many clients think that these are not “real” mortgages and can be wiped out like a credit card. This is wrong. A heloc is a real 2nd mortgage. It is attached to your house, and if you want to keep the property, you have to pay the loans attached to it.