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New Debt During Chapter 13 Contract for Deed

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Jeremy08

Member
What is the name of your state?KY
I am one year into a chapter 13 and I had the opportunity to afford 3 acres of land. The value is 6 thousand and I'm paying 7 over the course of 3 years. So I will complete the contract while in bankruptcy.

I signed a contract and had it recorded at the court house by a lawyer and I have a payment schedule. I didn't think I would need approval since I make no more money now than before and the payments are doable with my disposable income anyway and won't affect my ability to pay my plan. I want to make payments outside my plan.

My lawyer is no longer practicing and I didn't even think to ask about this. Do I need prior approval? Can I get approval after the fact if I need to? Also, I may get a raise of about an extra 11 thousand a year. My old lawyer said once that doesn't need to be reported. Only if I get a substantial raise like, 20 thousand a year.

I also have little to no assets and equity because my debts we're late and secure and this doesn't put me over the limit even if I owned it today.
 

justalayman

Senior Member
I'll try to get ahold of my lawyer who still ha does my case but is not available and tell him. I am not calling a trustee. He can
He’s not the one that has to answer to the trustee if you don’t report what must be reported; you will.

You have the responsibility here. Whether you do it or your former lawyer does or you hire a different laywer is up to you.. in the end, if you fail to report what must be reported and there is negative action against you, well, it’s your problem and nobody else’s.
 

LdiJ

Senior Member
He’s not the one that has to answer to the trustee if you don’t report what must be reported; you will.

You have the responsibility here. Whether you do it or your former lawyer does or you hire a different laywer is up to you.. in the end, if you fail to report what must be reported and there is negative action against you, well, it’s your problem and nobody else’s.
I agree, but I wouldn't advise someone to talk to the trustee directly either.
 

Litigator22

Active Member
I don't see how you can avoid securing approval of the bankruptcy court. Otherwise committing to such a post petition debt without the court's permission presents a serious issue with regard to the doctrine of mutuality of obligation. A principle of contract law that provides that unless both parties to a contract are bound to perform, neither party is bound.

So, inasmuch as we must take as given that during the administration of your Chapter 13 Plan all of your assets and income are a part of the bankruptcy estate over which the system has exclusive control how could you possibly commit any of those assets and income to that satisfaction of a post-petition debt without the approval of the system?

And if the contract for deed is not binding on you as the proposed buyer it cannot be binding on the seller.

Furthermore, how do you propose to convince the trustee and the bankruptcy court that your entry into the agreement and the act of incurring additional debt "is necessary for the completion of the plan" and/or that it "will not interfere with the administration of the plan"? All of which factors are to be weighed should you seek court approval. Not to mention that if approved, might necessitate amending the Plan.

You need to get off of you laptop seeking advice from people you don't know and pay for consultations with a bankruptcy specialist whom I'm convinced will not koodoo the "advice" that you need not report to the trustee the augmented income.
 

Jeremy08

Member
Uh, thanks. I have a lawyer. How do people think I am in a bankruptcy. He's just retired and hard to get ahold of.

Also, he told me never contact the trustee for anything. That HE will contact them and for ME and do all the paperwork. The exact verbage was "The Trustee is not your friend. You never speak to them, unless I am present."

I was just curious about the subject at an odd hour. I'll tell my lawyer and let him work it out.

Lol how can I justify my purchase? I have an answer, I am not saying what it is. My lawyer may come up with one different. I am allowed to buy anything with my disposable income. Socks, a horse, land.

Worst case, I don't get what I want and I pull out of my bankruptcy. That's the beauty of a Chapter 13. Or I may be advised to keep my mouth shut and not worry. Which is probably what I will be told.

I met with a lawyer once who told me to get a witness for a car speeding ticket to testify. I said, the cop knows I had no witness and I was on camera too. He said, so, get one to testify they have worked on your car, are a mechanic and know your car cannot drive 100 miles per hour. I never did, I just paid him to get the speed lowered and agree to no points on my license. But....he said he has used it and every time it works. Lawyers...they do some tricky stuff. So, good info here, I'll talk to my lawyer whenever he decides to call me back from golfing or Bermuda, and I'll let him handle it. I paid him 3 thousand dollars to handle my case all the way through. Not just to get it confirmed. And it's in my agreement so if there is a question of reporting timeline....well....I have the date I left a message. Not my fault my council took a month to get back. That's HIS job.
 
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Jeremy08

Member
I don't see how you can avoid securing approval of the bankruptcy court. Otherwise committing to such a post petition debt without the court's permission presents a serious issue with regard to the doctrine of mutuality of obligation. A principle of contract law that provides that unless both parties to a contract are bound to perform, neither party is bound.

So, inasmuch as we must take as given that during the administration of your Chapter 13 Plan all of your assets and income are a part of the bankruptcy estate over which the system has exclusive control how could you possibly commit any of those assets and income to that satisfaction of a post-petition debt without the approval of the system?

And if the contract for deed is not binding on you as the proposed buyer it cannot be binding on the seller.

Furthermore, how do you propose to convince the trustee and the bankruptcy court that your entry into the agreement and the act of incurring additional debt "is necessary for the completion of the plan" and/or that it "will not interfere with the administration of the plan"? All of which factors are to be weighed should you seek court approval. Not to mention that if approved, might necessitate amending the Plan.

You need to get off of you laptop seeking advice from people you don't know and pay for consultations with a bankruptcy specialist whom I'm convinced will not koodoo the "advice" that you need not report to the trustee the augmented income.
The contract is binding, signed and recorded. It was created by a lawyer. If I default the land can be foreclosed or I can sign my right back to the owner and avoid foreclosure. They can give me my money back or however we decide to do it. I don't even pay the taxes on it until it is mine.
 

Jeremy08

Member
All I know is I refuse to pay this inside the plan. I pay my current mortgage outside of it. I will pay it with the menial disposable income they left me, legally, and if they want me to "justify" any purchase, and that justification isn't enough, well, I can get out of my bankruptcy in one day.
 

justalayman

Senior Member
The contract is binding, signed and recorded. It was created by a lawyer. If I default the land can be foreclosed or I can sign my right back to the owner and avoid foreclosure. They can give me my money back or however we decide to do it. I don't even pay the taxes on it until it is mine.
you don’t understand a single thing litigator told you. Given your cockiness I’m not inclined to try to explain it to you. I’ll let you learn it on your own.
 

Jeremy08

Member
I understand I should get off the computer and call my lawyer and do exactly what he says to do. Which was from day one NEVER call my trustee. Let HIM deal. The squeaky wheel gets the grease was another thing he said. The man has been a bankruptcy lawyer for 20 years, just bankruptcy. I think if he says the trustee isn't my friend, and he is, I believe him.

I've had many lawyers. They have all been extremely competent. They always fix your situation.

This was just general info. I was wondering how this agreement was looked at, mostly Free advice is just mostly opinions. Good opinions.

Like I said, I can always just end my bankruptcy any day and poof, the trustee can't have their nose in my business every time I vacation or *gasp* buy something. Omg I have disposable income they let me have, maybe my medical expenses aren't as high as allowed. Maybe my car expenses aren't as high as allowed. Maybe I'm not spending as much on birthdays. They created the means test. I can buy what I want off my money THEY let me have as disposable. And by law, I can cancel my bankruptcy. That's my right.
 

justalayman

Senior Member
Nobody said the trustee was your friend
If your attorney retired, he may not legally be able to represent you any further. It all depends on what the lawyer has done to enter retirement. He may also not be willing to come out of retirement to represent you. That is something you will have to discuss with the attorney.

You are quite flippant regarding withdrawing you chap 13 filing. That is something you should really discuss with an attorney before doing. Due to the stays in place from the bk action being removed, it’s kind of like a dam bursting. if there was a valid reason for the bk prior to filing, it will be there again, and can even be worse. You may have considerable costs attributable to the bk itself that you cannot now escape.

If it is found you magically have all this money available for whatever reason, the trustee may just take a bit of added interest in your case. Magical money often suggests a fraudulent bk filing.
 

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