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What Happens to Investment Real Estate in Bankruptcy?

Sawin & Shea

When filing under Chapter 13, you’re required to pay unsecured creditors — meaning they can’t recover physical property as collateral — the liquidated value of your nonexempt property. Although this may sound more appealing if you own equity in your investment, there are critical factors you need to consider before filing.

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Five Burr Attorneys Named to Lawdragon’s 2022 “500 Leading Bankruptcy & Restructuring Lawyers” List

Burr Forman

In his bankruptcy practice, Eric focuses on representing creditors, including financial institutions, special servicers, private equity groups, and other non-traditional lenders as well as other secured and unsecured creditors in state and federal court litigation, chapter 11 bankruptcy cases, and in out-of-court workouts and resolutions.

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As Chapter 11 Bankruptcy Filings Surge, Here’s What Creditors Need to Know to Protect and Enforce Their Rights

Fraser

Such relief may include a request to pay some unsecured creditors (such as employees or “critical vendors”) ahead of others. A creditor may need to file an objection to requested first-day relief to protect its rights. Unsecured creditors whose rights are “impaired” are entitled to vote on a plan, as well as object to it.

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Recent Decision on Derivative Standing by a Creditors’ Committee to Challenge a Lender’s Liens

PBWT

In many chapter 11 cases, creditors’ committees can play a vital role in maximizing the recoveries of unsecured creditors. But the powers of creditors’ committees are circumscribed by both the Bankruptcy Code and case law.

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What Is Nonexempt Property In Bankruptcy, And Why Does It Matter?

Debt Free Colorado

The filer maintains all non-exempt property as long as unsecured creditors get the value of the non-exempt asset under the Chapter 13 repayment plan. Rather than that, you will pay an amount equal to the value of the non-exempt property to your unsecured creditors (creditors whose debt is not covered by collateral).

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What Are Preferential Payments in Bankruptcy?

Sawin & Shea

Insider creditors include a friend, family, member, or business associate. If the payments were made to an insider creditor, the preference period changes from 90 days to within one year of filing. Secured vs. Unsecured Creditor A secured creditor has a lien of some kind on a debtor’s property.

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Dealing With Debt From COVID-19

Debt Free Colorado

They will feel obligated to protect their interest in the collateral (your car) and can move quickly to repossess after only a few missed payments. If you own a home the consequences of a judgment against you are more significant as judgment creditors can place liens against your home. Coronavirus Car Payment Relief Programs.