Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789
407-740-7379
Contact Us
Bankruptcy
The bankruptcy process can be very complicated so at the Winter Park, Florida, law firm Lanigan and Lanigan, P.L., we want to make sure you know and understand the court process. Hence, it is important to understand the way in which bankruptcy jurisdiction is channeled to the bankruptcy and district court. Bankruptcy Code The Bankruptcy Code is a federal law created by Congress and falls within the realm of federal courts. Under 28 U.S.C. 1334, jurisdiction over bankruptcy is conferred to the district court. This jurisdiction covers the bankruptcy case itself as well as matters arising under the Code and relating to the case. The district court then refers these matters to the bankruptcy court where most of the litigation occurs. However, the final disposition of the bankruptcy litigation depends on the nature of the rights in issue. This is because bankruptcy judges do not have Article III status under the U.S. Constitution and thus cannot adjudicate matters that do not arise out of the bankruptcy code itself. Bankruptcy Core Proceedings vs. Non-Core Proceedings As a result, the bankruptcy code makes a distinction between “core” proceedings and “non-core” proceedings to determine if a bankruptcy court has the power to render a judgment on an issue or whether it must give recommendation to the district court. A core proceeding has been defined as one that, “invokes a substantive right provided by Title 11…that, by nature could arise only in the context of a bankruptcy case.” In re Wood, 825 F. 2d 90, 97 (5th Crt. 1987). On the other hand, if it is not a core proceeding and is related...
Bankruptcy
Making the Decision to File Bankruptcy The Lanigans explain how Chapter 11 Bankruptcy and Chapter 13 Bankruptcy differ. Chapter 13 bankruptcy and Chapter 11 bankruptcy are both plans of reorganization but they have very specific differences. When you reach the point where you are considering bankruptcy contact Winter Park, Florida, lawyer Roddy Lanigan for a meeting to determine your bankruptcy options. The final decision is yours but you have to qualify and find out based on your finances which bankruptcy is optimal. Chapter 11 Bankruptcy Chapter 11 is usually for businesses or for individuals who owe much more than the average person. Chapter 11 allows businesses to get on a payment plan and try to get out of debt while still operating as a viable company. Section §109(d) governs Chapter 11 which gives the same list found in §109(b) for Chapter 7 (you can file in Chapter 11 only if you can file under Chapter 7) except Chapter 11 includes railroads, uninsured banks and banks organized under the Federal Reserve Act. Chapter 11 is very loose, can be expensive and complex but this flexibility allows the companies to negotiate and can take a lot of time. In addition, Chapter 11 does not require a trustee and the person running the bankruptcy is known as the “debtor in possession.” This allows any party of interest to file a plan which is then voted on by the creditors to determine which one best serves their interests. Chapter 13 Bankruptcy Conversely, Chapter 13 bankruptcy is known as the “working man’s or woman’s plan” and focuses on average consumers who are not looking to...
Bankruptcy
Under section 506(a) of the Bankruptcy Code, a creditor holding a lien perfected under non-bankruptcy law against bankruptcy estate property, and which is not subject to avoidance, is entitled to retain that encumbrance. However, where the value of the collateral is less than the amount the debtor owes, the debtor may elect to retain the collateral and be obligated to pay the creditor only that amount equaling the value of the estate’s interest in the property. This process is called “lien stripping” which reduces the lien to the value of the collateral to which it attaches and removes a wholly unsecured lien in its entirety. Thus, this allows a debtor to bifurcate a mortgage claim into secured and unsecured debt based on the value of the home so that the debtor will only have to pay the secured part of the claim. The code is clear that this is not permissible for homes that are the debtor’s principal residence. Furthermore, courts generally have determined that only senior liens can be stripped down and that it is impermissible to strip down junior liens (a second lien). However, in the recent landmark decision in LORRAINE MCNEAL v. GMAC MORTGAGE, LLC, HOMECOMINGS FINANCIAL, LLC the 11th circuit reversed this holding. In this case, the debtor had reported that her home was subject to a first and second priority lien. The debtor contended that, because the senior lien exceeded the home’s fair market value, GMAC’s junior lien was wholly unsecured and, thus, void under section 506(d). The bankruptcy court denied the debtor’s motion, concluding that section 506(d) did not permit a Chapter 7...
Bankruptcy
In bankruptcy, generally, secured claims are paid first and in full while general unsecured creditors are paid pennies on the dollar. However, for policy reasons the bankruptcy code has determined several “priority claims” which get paid after secured creditors but before general unsecured claims. Bankruptcy code and details are as important as working with a bankruptcy attorney experienced in handling the details of Chapter 7 or Chapter 13 bankruptcy. Eric Lanigan and Roddy Lanigan will explain and clarify complex bankruptcy information that you need to understand if and when you decide to file bankruptcy. Consult with the Lanigans in their Winter Park, Florida, office. You’ll learn what to do, when to do and will leave the court and filing process to the Lanigans. Section 507 lists the order of priority claims which are paid in descending order. The order only matters in a Chapter 7 bankruptcy case because in Chapter 13 bankruptcy priority claims must be paid in full. Nevertheless, the fourth and fifth priority claims involve past due employee salary and benefits. This includes wages, salaries, severance, etc. earned during the 90 days prior to filing but cannot exceed $11,725 per employee. Any remainder will be an unsecured non-priority claim. In addition, employee’s can receive the contributions made to employee benefit plan during the 180 days before filing or end of business. Thus, the formula to determine fourth and fifth priority claims are as follows: Take $11,725 and multiply it by the number of employees That number is the maximum amount you can give to the 4th and 5th priority claims. You take that number and subtract the amount of...
Bankruptcy
Fraudulent Credit Card Charges Are Easy to Spot There are very serious legal consequences for individuals who spend thousands of dollars on a credit card before filing bankruptcy. Bankruptcy attorney Roddy Lanigan warns debtors: Do not max out your credit cards and then file bankruptcy because you may face fraud charges which can’t be dismissed or waived. People overwhelmed by debt file bankruptcy due to high medical bills, job loss, accidents with injuries, high credit card bills (from legitimate expenses not shopping sprees), mortgages with massive late fees and balances due to high annual percentage rates. Individuals and businesses have the right to file bankruptcy. If you’re going to file Chapter 7 bankruptcy or Chapter 13 bankruptcy, do not spend carelessly and fill up your credit limit. Doing this will become a very serious issue. Winter Park bankruptcy attorney Roddy Lanigan can help to explain why this can be considered credit card fraud. Questionable Credit Card Activities Do not: Go on a shopping or spending spree Suddenly buy luxury items Spend after you consult with an attorney Spend when card has been recalled Spend a lot and then file bankruptcy Spend up to your credit limit Pull cash withdrawls to max out your card Using card knowing you can’t afford to pay it, i.e., after a job loss Some Debts Survive Bankruptcy If a creditor files a motion in court to prove that the debt shouldn’t be discharged. For example, if a creditor successfully objects to a debt arising from your fraudulent actions or recent credit card charges for luxuries, those debts will be waiting for you after your...
Bankruptcy
Don’t Lose a Rental Property to Foreclosure A Cramdown is a Bankruptcy Tool Lower investment property debt with a cramdown, a tool of the bankruptcy court to modify secured debt owed that’s other than a primary residence. A cramdown is a tool that the bankruptcy court has available to modify the amount owed on a secured debt—other than a mortgage–or similar debt on a primary residence. Nearly five million Americans lost their homes to foreclosure since the housing bubble popped between 2007-12, according to the New York Times. about 3.5 million are in foreclosure proceedings. But the worst is yet to come. In September 2011, a U.S. Senate Banking subcommittee heard testimony from a prominent mortgage industry analyst that 10.4 million mortgages, approximately one out of every five outstanding mortgages in the country, could default, if Congress does not take action to address the housing crisis. Cramdown May Modify Amount of Secured Debt Owed A secured debt is one where property is used as collateral to secure a debt. If the debt isn’t paid, the creditor gets the property. In a Chapter 13 rental property cramdown, the secured debt, i.e., mortgage on a rental, income, or investment property is reduced to the property’s market value, which is, after all, all the secured creditor could count on recovering if it had to foreclose. The cramdown is available for any sort of secured debt other than for the primary residence. It’s most commonly used for vehicles which depreciate to be worth less than their loans, as well as income or investment properties where there’s been a market downturn and the property is worth less...
