Bankruptcy Judge for Chapter 13 Reform
By Kurt O'Keefe, Attorney at Law on Nov 30, 2008 in Bankruptcy Cases & Legislation
No one has advocated Chapter 13 bankruptcy reform, to allow courts to re-write the terms of mortgages secured by homes, longer than the bloggers on this site.
I have not seen our argument for Chapter 13 bankruptcy reform put better than in this Washington Post article.
Kansas bankruptcy attorney Jill MIchaux and San Diego bankruptcy attorney Michael Doan have posted on specific pending legislation.
We have already spent too much on bailouts of the financial industry that produced the sub-prime crisis.
As far back as August, 2007, Jacksonville bankruptcy attorney Chip Parker was calling for Chapter 13 reform.
As bankruptcy laws stand, if you are a corporation filing Chapter 11, the court can re-write the terms of your secured debt, if you are an individual filing Chapter 11 or Chapter 13, the court can re-write the terms of your secured debt, except a mortgage on your “principal residence”, that is, your home.
So, if you own 24 rental homes, the court can re-write those 24 mortgages, or 48, or 72, or however many there are on those rental homes, but, not on the home in which you live.
Think it is too late, we have already authorized or spent the bailout money, it will take time, but the problem will be fixed?
As Michigan bankruptcy attorney Kurt OKeefe has posted on another one of our sites, the FHA program is now being used to write even more bad mortgages that will be defaulting.
If your home is not caught up in this crisis, great. But, I will bet you know someone who is, and, your community’s real estate values are affected also.
So, contact your so-called representatives, let them know what you think, more bailout money, or bankruptcy reform that costs the taxpayers nothing?
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