August 11, 2010 By Greater Boston Law
Frederic was an auto mechanic with his own business in Alabama before moving to Massachusetts. He had a home mortgage with a balance of $360,000, about the amount his house was worth at the time. He also had a second mortgage with a balance of $60,000.00. He earned $90,000.00 per year at his new job. When he left Alabama he defaulted on the business lease for his auto repair garage. It was a ten year lease and a judgment was issued by the Alabama courts against him in the amount of $370,000.00 for the balance of rent due on the lease. This debt plus credit card debt of $70,000.00 exceeded the unsecured debt limit for filing Chapter 13.
We filed him under Chapter 13 anyway and argued to the Bankruptcy Court judge that the judgment from Alabama was not liquidated, meaning the balance due would need to be reduced if the building owner found a new tenant in the next ten years, which was very likely. Therefore, the judgment should not count as unsecured debt. The Court agreed and allowed Frederic's Chapter 13 to go forward. For a payment of $420.00 per month for five years to a Chapter 13 Trustee, Frederic was able to eliminate all of his credit card debt and strip off his second mortgage. In addition, he had to continue making his first mortgage payments and car payments as well as household expenses, which he was able to do comfortably.
Know your options. Contact the Massachusetts Chapter 13 bankruptcy lawyers at Nashawaty & Rand today.
The Massachusetts Chapter 13 bankruptcy attorneys at Nashawaty & Rand serve clients throughout the Greater Boston Massachusetts region including Abington, Avon, Boston, Braintree, Brockton, Bridgewater, Canton, Dedham, Dover, Easton, Hanover, Hingham, Hollbrook, Marshfield, Medfield, Milton, Norwell, Norwood, Quincy, Randolph, Rockland, Sharon, Stoughton, Walpole, Westwood, Weymouth, Whitman, Massachusetts.
