A Single Asset Real Estate case usually involves a commercial building, apartment complex, or even vacant land.  Generally, a Single Asset Real Estate case concerns a piece of property, or a project, owned by an an entity (a limited partnership, or more commonly now, a limited liability company).  The entity’s sole purpose is to operate the property with funds generated by the property.  

The most important creditor in a Single Asset Real Estate case is the entity’s mortgage lender.  In some deals, the entity has secured financing from second-tier or mezzanine lenders.  The Singe Asset Real Estate entity may also owe debts for taxes, utilities, or property management fees. 

Under the Bankruptcy Code, a Single Asset Real Estate case has the following three characteristics:

• a single piece of real property or project (excluding residential property with less than four units);
• which generates substantially all of the income for the debtor (who is not a family farmer); and
• the company (or debtor) operates no substantial business other than operating the property or project.

A Single Asset Real Estate case is not limited to small projects.  It can include large commercial properties.  Even a large shopping center worth millions of dollars could be Single Asset Real Estate case.  If you are the member or owner of a Single Asset Real Estate entity, there are benefits to filing chapter 11 case.  However, you have a more difficult road than a typical debtor in chapter 11.  Our third and final blog in this series will explore the benefits and difficulties associated with a Single Asset Real Estate case.  

We at Lakelaw know the details of Chapter 11.  David Leibowitz even taught the course on Real Estate Bankruptcy Law to graduate law students at the LL M level at John Marshall Law School.  He was recommended for the job there by former Bankruptcy Judge Ronald Barliant as a result of his practice before him.  Jonathan Brand has had a wide-range of exposure to real estate cases not only at Lakelaw but also during his tenure as a law clerk with two different bankruptcy courts.  Lakelaw is available to answer any of your concerns related to Single Asset Real Estate cases or your other bankruptcy needs.

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Clients ask, what is a Single Asset Real Estate bankruptcy case?  If you or your company owns a single building or piece of land, cannot pay the lender and decide to file bankruptcy, then your probably have a “Single Asset Real Estate” case.  Special rules apply if you are thinking about filing bankruptcy under Chapter 11.  Lakelaw knows the rules related to Single Asset Real Estate cases and regularly represents people and businesses facing this situation.

A Single Asset Real Estate case can work for a property owner even in these troubled times.  But you have to understand the rules, parameters and guidelines if you want a Single Asset Real Estate case to work for you.  Chapter 11 can help you save your property.  However, Congress amended the Bankruptcy Code to make it easier for banks to foreclose on your property.  They convinced Congress that a company held just to own one parcel of real estate had no real reason to survive.  Congress bought this argument – hook, line and sinker.  So, Single Asset Real Estate cases are challenging, but not necessarily dead on arrival.

We at Lakelaw know the details of Chapter 11.  David Leibowitz even taught the course on Real Estate Bankruptcy Law to graduate law students at the LL M level at John Marshall Law School.  He was recommended for the job there by former Bankruptcy Judge Ronald Barliant as a result of his practice before him.  Jonathan Brand has had exposure to real estate cases not only at Lakelaw but also during his tenure as a law clerk with two different bankruptcy courts.

There are many ways that a Single Asset Real Estate case can fail.  But if you know the rules of the road, you can take advantage of the benefits associated with filing a Single Asset Real Estate case and have your best chance of success.  Let Lakelaw navigate your Single Asset Real Estate case to a road towards recovery.

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Today I heard about a couple’s predicament:  They just had their second child.  Mom is staying home.  So the couple went from a two-income household to a one income household.  However, they did not go from a two-mortgage home to a one-mortgage home at the same time! As a result of the blessed event, they also faced big credit card and medical debts.  What to do?

Well, they could file a chapter 7 bankruptcy – if they qualify through the means test.  Their previous six-months income was still high, but that would change within a short period of time.  They could also try to defeat the presumption they are abusing the system by showing the permanent change in their income since Mom is staying home with the kids.

This would eliminate a lot of debt, but not the debt that’s giving them the most headaches:  Their second mortgage.  It’s a high interest home equity loan.  And the house is worth even less than the first mortgage. So we discussed Chapter 13 as an option.

Despite the huge influence banks have over Congress, the bankruptcy laws still allow a couple to eliminate the second mortgage in the Chapter 13 if the house is worth even less than the first mortgage.  This is fantastic news for our couple because they can stop paying their second mortgage, and pay their chapter 13 Plan instead.  That plan will mean that those creditors will be old news in 5 years, and so will that pesky second mortgage.    It may seem counterintuitive – paying more money saves you more money?  But sometimes that’s just the way it works out. 

For financial relief in Kenosha, Racine, Walworth or Milwaukee, call Lakelaw today at 262.694.7300 and ask for Attorney Ryan Blay or David Leibowitz. 

This post was written by Ryan Blay, Supervising Attorney in Lakelaw’s Kenosha office.

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You can file your bankruptcy case in Wisconsin even if you are relatively new to the State.  Suppose you move to Wisconsin after having spent the last several years elsewhere.  First, welcome to a state with wonderful people and a lot of reasons to stay.   But you might be moving to Wisconsin and be concerned about filing a bankruptcy.  This is where an experienced bankruptcy attorney can assist you.

You have some flexibility, just like the big corporations which file their cases in New York and Delaware.  Once you’ve lived in Wisconsin a little more than 3 months, you can file your case here.  Or you could file your case in Wisconsin right away if most of your property is now located in Wisconsin.

If you just moved to Wisconsin, you can’t use  Wisconsin’s exemption law to figure out what property you can keep.  Chances are, you’re going to use your old state’s rules.  The key factor is where you lived in the 180 day period before the last two years started.  If, like me, you moved recently from Illinois, spending the bulk of that 180 period in the Land of Lincoln, you’d be using the Illinois rules.  Sometimes, however, you may have to use the federal exemptions.  Make sure your lawyer asks you the right questions so that you can get the right answers.

For financial relief in Kenosha, Racine, Walworth or Milwaukee, call Lakelaw today at 262.694.7300 and ask for Attorney Ryan Blay or David Leibowitz. 

This post was written by Ryan Blay, Supervising Attorney in Lakelaw’s Kenosha office.

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Another firm’s client paid over $26,000 in a chapter 13 plan.  He was late a few payments.  But he got a new job and had some money.  Unfortunately, his former lawyer told the court that he had no defense to the Trustee’s motion to dismiss.  The chapter 13 trustee was so concerned that he sent the client to Lakelaw to try to help.  What can be done?

If a court enters an order, sometimes, it can be modified or even vacated.  You have to act fast.  Under Bankruptcy Rule 9023, you have only 14 days to ask the court to vacate an order which you think it should not have entered.

This can’t be done in every case.  You have to have a good reason. The main reasons for changing an order are:

• Serious mistake of fact
• Serious mistake of law
• Newly discovered evidence

There’s another Rule, Bankruptcy Rule 9024, which allows post-judgment relief.  But here, you would have to prove:

• Mistake, inadvertence, surprise or excusable neglect
• Newly discovered evidence which could not have been discovered within 14 days of the order
• Fraud, misrepresentation or misconduct by an opposing party
• The judgment is void
• The judgment is satisfied
• Any other reason which justifies relief

At Lakeaw, we want you to get things things right the first time.  But if things go wrong, don’t give up.  You may have hope.  Call us at Lakelaw today at 1 866 LAKELAW (5253529)

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Today, I met a new client seeking to file a bankruptcy.  She faced moderate debts and also a large installment loan on her car.   She was unemployed.  But the future looks brighter for her.  Why?  This fifty-something client has taken advantage of the time given her during unemployment.  She has been studying at the local technical college in Wisconsin and has learned a new profession.  I’m not going to mention the specifics to protect her privacy.  However, when she graduates from the program, there will be a job waiting for her.  She’ll be able to keep her house thanks to a loan modification agreement – there actually has been one offered to her.  She’ll be able to support herself thanks to her new job.  And thanks to bankruptcy, she’ll enjoy a fresh start and a sound financial footing.  Wisconsin offered this client job retraining support – a fact which can be very useful to know for other Wisconsin clients facing bankruptcy and unemployment in light of factory closings in Kenosha , Racine and Janesville.

We at Lakelaw know that you are hurting.  We at Lakelaw care about your financial future. You can count on us for far more than just a bankruptcy petition.  We’ll work with you from start to finish and beyond to be sure you get the relief you need and deserve and the fresh start to which you are entitled.

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Lakelaw represents people in Wisconsin in Consumer Bankruptcy Cases and in defending against mortgage foreclosures.  Our office is in Kenosha.  However, we can help you just about anywhere in the State.  In Wisconsin, lawyers frequently appear in court by telephone and remote access.  We find it saves us a lot of time driving around the state.  We think that if this is good enough for us in working with the courts, it’s good enough for you in working with us.  If you would like to work with an outstanding, Board Certified, bankruptcy lawyer, recognized throughout
Wisconsin for expertise in mortgage foreclosures, Lakelaw is the place for you – from Eau Claire to Kenosha and from Monroe to Green Bay.  If you are reading this blog, you have demonstrated that you are techologically advanced.  We use technology to project our practice throughout the state.  Call 1 – 866- LAKELAW (525 – 5359) for bankruptcy and mortgage foreclosure help now.

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At Lakelaw, we ask all our clients to give us paystubs from their jobs for the six months prior to the date that they are filing their bankruptcy case.  It’s a pain in the neck.  We know.  Why do we ask?  Congress requires us to ask.

Under the “means test” you are considered to be abusing the bankruptcy system by filing a chapter 7 case – a straight bankruptcy – if your “current monthly income” is more than the national median.  What does that mean in plain English?

If you make more than 1/2 of the people in the country for a family your size, Congress thinks you should be filing a chapter 13 case, all things considered.

Just to be sure you are not noodling your numbers, Congress figures out what you are making now by averaging what you made over the past six months.  So even though the past six months does not reflect your present income, it does define your “current monthly income” for means test purposes.

If you make more than the median income for a family our size, we can sometimes qualify you for chapter 7 if you “overcome the presumptions” of abuse.  For this, we need to do a detailed means test analysis.  We charge you extra for this.  It takes us an hour or two to analyze your situation and decide the proper outcome for you.  We’ll explain more about this in a future post.

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Have you lost a lot of money in your business or investments?  Have you run up a lot of debts on your credit cards trying to keep your business afloat?  Then your debts might be “business debt” and not “consumer debt”.  If your debt is not “predominantly consumer debt”, then the means test doesn’t apply to you. This means that you might be making more than the median family income and still not be presumed to be abusing the bankruptcy system by filing a chapter 7 case.  That might be good news for you.  You might be able to avoid being an indentured servant for 5 years in chapter 13.

How do you know whether or not your debt is “predominantly consumer debt”?  The term “predominantly” is not defined.  The Supreme Court says to read the Code in accordance with plain language.  I take this to mean use words the way people use them in ordinary language.  Predominant to me means more than anything else.  Not necessarily a lot more but certainly more.  Look it up in the dictionary.  So if the majority of your debt is not consumer debt, the means test probably will not apply to you.  I’d see if you pass the means test anyway.  Often you will.  And if there are two ways to get to “GO”, then I would certainly suggest that you take both of them.

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Clients have asked whether a minor can file a bankruptcy case.  Why might this happen?  A minor could be indebted for example because he or she was involved in a car accident and injured somebody.  Or the kid may have been a college student who abused credit cards. Or the child may have lost her drivers license for driving without proper insurance.

Bankruptcy can help adults in this situation and also can help children.

Here’s what you have to do.  A child can’t start a legal proceeding without the action of the adult guardian. So the bankruptcy petition would have to be filed by the adult parent or guardian on behalf of the child.  This also applies to credit counseling requirements as well as financial management issues. 

Call us at Lakelaw and we will navigate you through all the details and in so doing, we will help you put Junior on the road to financial freedom

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