Livonia Michigan Bankruptcy - Michigan Bankruptcy Blog

Livonia Michigan Bankruptcy

Michigan Bankruptcy Blog

Archive for January, 2013

2012 FEDERAL TAX REFUNDS IN CHAPTER 13 CASES

Posted by Peter Behrmann, Esq. On January 31st

Tax Refunds2012 FEDERAL TAX REFUNDS 

It’s tax time and time to remind you of the number one reason most Chapter 13 cases are dismissed without discharge.  The number one reason is because of the failure to submit Federal Tax Returns and Federal Refunds to the Chapter 13 Trustee.  Per your Chapter 13 Plan, you are required to submit your Federal Tax Return and any Federal Refund you receive to your Chapter 13 Trustee.  Even if you do not receive a Federal Refund, you must submit your Federal Tax Return to the Chapter 13 Trustee.   

 

Please see below for the addresses of the Chapter 13 Trustees that service the Detroit area.  If you have any questions or do not remember who your Chapter 13 Trustee is please contact our office.   Our goal is to make sure all of our cases get to discharge, including yours!

 

IF YOUR TRUSTEE IS KRISPEN S. CARROLL

Please mail a copy of your Federal Tax Return to:

      Krispen S. Carroll

      719 Griswold

      1100 Chrysler House

      Detroit, MI 48226

 Please mail your Federal refund to:

      Krispen S. Carroll

      PO Box 2018

      Memphis, TN 38108-2018

Make your payment payable to Krispen S. Carroll.  Make sure to write your Case No. and 2012 Federal Tax Refund on your payment.

 

IF YOUR TRUSTEE IS DAVID WM RUSKIN

Please mail a copy of your Federal Tax Return to:

      David Wm Ruskin

      1100 Travelers Tower

      26555 Evergreen Road

      Southfield, MI 48076-4251

 Please mail your Federal refund to:

      David Wm Ruskin

      1593 Reliable Parkway

      Chicago, Illinois 60686-0015

Make your payment payable to David Wm Ruskin.  Make sure to write your Case No. and 2012 Federal Tax Refund on your payment.

 

IF YOUR TRUSTEE IS TAMMY L. TERRY

Please mail a copy of your Federal Tax Return to:

      Chapter 13 Trustee-TLT

      535 Griswold

      Suite 2100

      Detroit, MI 48226

 Please mail your Federal refund to:

      Chapter 13 Trustee-TLT

      PO Box 2039

      Memphis, Tennessee 38101-2039

Make your payment payable to Chapter 13 Trustee-TLT.  Make sure to write your Case No. and 2012 Federal Tax Refund on your payment.

 

IF YOUR TRUSTEE IS CARL L. BEKOFSKE

Please mail a copy of your Federal Tax Return to:

      Chapter 13 Trustee – Flint

      400 N. Saginaw Street, Suite 331

      Flint, MI 48502

Please mail your Federal refund to:

      Chapter 13 Trustee – Flint

      PO Box 2175

      Memphis, TN 38101-2175

Make your payment payable to Chapter 13 Trustee – Flint.  Make sure to write your Case No. and 2012 Federal Tax Refund on your payment.

 Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

Keeping a House in Chapter 13 Bankruptcy

Posted by Peter Behrmann, Esq. On January 22nd

Keeping a House in Chapter 13 BankruptcyLivonia Home Chapter 13

 

So you want to keep your home and file Chapter 13 bankruptcy.  In a Chapter 13 Bankruptcy, the debt that you owe to the mortgage company will not be discharged.  However, we may be able to remove a second mortgage or home equity line of credit from your home.

 

So here is what happens:

(A) You owe $150,000 on your first mortgage;

(B) Your home is currently worth $120,000;

(C) You owe $37,500 on your second mortgage;

(D) There is no equity in your home to attach to the second mortgage and the second mortgage is removed in your Chapter 13 Bankruptcy.

 

How this is different than Chapter 7 and keeping your home!

 

In a Chapter 7, Bankruptcy the underlining debt to both your first and second mortgage is discharged; however, the liens (both of them) remain on your home.  In short, you are not responsible for the payments anymore; however, they can still foreclose and take the property back.

 

A Chapter 13 Bankruptcy makes the most sense if you plan on retaining your home long term.   In a Chapter 13 Bankruptcy, the note will not be discharged on your first mortgage; however if you plan on keeping your home this should not be an issue.  In a Chapter 13 Bankruptcy, both the Note and the Lien can be removed from your home for any second mortgages or home equity lines of credit are that no equity attaches too.

 

The bottom line: If you want to keep the property long term and you have a second, third or even a fourth mortgage, a Chapter 13 might just be the best decision for you.

 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

Keeping a House in Chapter 7 Bankruptcy

Posted by Peter Behrmann, Esq. On January 11th

Keeping a House in Chapter 7 BankruptcyHome in Chapter 7 Bankruptcy

 

So you want to keep your home and file Chapter 7 bankruptcy.  In a Chapter 7 Bankruptcy the debt that you owe to the mortgage company will be discharged, however the mortgage lien will remain on your home. 

 

So here is what happens:

(A) You have received a discharge in bankruptcy;

(B) You did not reaffirm the mortgage;

(C) You still have the property; and

(D) You have continued to make payments according to the terms of the original loan.

 

In a nutshell:

This scenario is very common, and it gives you the best of both worlds. The underlying debt has been discharged, but the creditor still has a lien on the collateral. As long as you continue to make the payments they can’t bother you or the collateral. If you ever default, then they can foreclose, but they can never claim that you owe them any money. That would be a violation of the bankruptcy discharge.

 

In a little more detail:

When you took out this loan you signed papers which gave the creditor two different rights:

(1)  to collect money from you(This was the note you signed); and

(2)  to take the property away from you if you failed to make the payments or if you otherwise defaulted on the terms of the loan (This was the mortgage you signed.)

 

The bankruptcy discharge eliminates their right to demand money from you (The Note), but in most cases it does not affect the lien that they have on your property (The Mortgage) This creates the interesting situation described above, where for most purposes the mortgage remains in effect, but you now have the absolute right to walk away at anytime if that turns out to be the right thing for you.

 

This is especially true if you have always been current on the payments for this particular loan. They are not allowed to foreclose unless you are in default, and despite what your contract might say, the law does not consider bankruptcy to be a default for these purposes.

 

The bottom line:

If you want to keep the property, just keep making the payments and be sure to comply with any other contractual terms, such as paying local property taxes and maintaining valid insurance. If you eventually pay off the loan you will own the property outright. If you ever decide that paying for the property is not in your best interest, whether that’s because you can’t sell it for enough to pay off the mortgage(s), or because you simply can’t afford to make the payments, or because the house burned to the ground, you can simply walk away and there’s nothing the mortgage company can say about it. They can still foreclose, but that’s all they can do.

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy, and Foreclosure Prevention.