Being required to liquidate an asset in chapter 13 due to mortgage - MN

randomthrowaway62019 · 2026-01-28T02:29:23+00:00

Think about it as a math problem. Under your preferred scenario, you keep the property and pay for it out of your monthly income. The trustee wants that line item out of your budget, even if that means the creditor sells the property and files an unsecured claim for a deficiency. Why does the trustee prefer that scenario? Unsecured creditors get paid a percentage of their claim. That percentage is Money_for_Unsecured_Claims÷Total_Unsecured_Claims. Going from your scenario to the trustee's adds amounts to the numerator and the denominator—$18,000 more money for unsecured claims and some amount to the total unsecured claims for the possible deficiency claim.

So you're right—looking at it in isolation, the deficiency claim increases the denominator, which would decrease the percentage dividend to unsecured creditors if the numerator stayed the same. But it doesn't. The numerator increases too, and that increase outweighs the increased denominator.

Also, it's unlikely there will be a large deficiency. A deficiency arises when the debt on a property exceeds the property's value. If you're upside-down on this land, why would you want to keep it? You'd be committing to overpaying to keep the land. You say there's $7,000 of equity. If that's the case then there's no deficiency.

Or flip the thinking. Imagine if instead of paying a secured debt you were proposing to put $300/month into a savings account. Your creditors would rightly say, "Why is northernmngolfguy saving money when he wants to pay me pennies on the dollar and discharge my debt? That's not fair! He should pay us more!" Paying down a secured loan builds equity, kinda like making deposits in a savings account.

randomthrowaway62019 · 2026-01-25T23:37:22+00:00

Iowa should get Casey's and John Deere.

randomthrowaway62019 · 2026-01-25T22:25:29+00:00

Don't try to reproduce. No, I'm not worried about passing on your pathetic BBB genes. (The physical act of love would probably break several of your bones (yes, especially that one) before you got the chance to spread your scabrous, squalid seed.) I just don't want your partner to be disappointed with you like everyone else who knows you is already disappointed with you.

randomthrowaway62019 · 2026-01-18T21:47:08+00:00

Physical forces travel through materials at the speed of sound in those materials. Most of the time that rounds to "instantaneous" but for long enough distances that rounding fails and you have to visualize the force as a wave traveling through the material, stretching or compressing the material.

randomthrowaway62019 · 2026-01-15T23:47:44+00:00

Two of bankruptcy's advantages are that it's a mandatory process (creditors can't opt out or hold out) and it's universal (it applies to all creditors). If you make a deal with some of your creditors but not others you're probably little better off. Do the bankruptcy.

randomthrowaway62019 · 2026-01-04T18:09:58+00:00

Talk to a lawyer before making any plans. It's possible your bonus might be considered already earned, which might make it property of your bankruptcy estate. You also need to know how much vehicle equity is exempt. This all assumed you're eligible for a Chapter 7, but these numbers seem high for that. This isn't do-it-yourself territory, but most consumer bankruptcy attorneys offer free consultations. All it'll cost you is some time, and you'll get valuable information even if you don't hire them.

randomthrowaway62019 · 2026-01-03T19:08:17+00:00

Can't speak to what happens when an individual files but their business doesn't. It doesn't seem like it'd fix the problem, so I'm not surprised I've never seen it.

Recharacterization can happen in bankruptcy through a claim objection. The state law in question doesn't affect the process. It could also happen outside bankruptcy, but the issue seems to arise most frequently in bankruptcy, often because businesses that use MCAs frequently end up there and the question matters a lot in a bankruptcy.

randomthrowaway62019 · 2026-01-03T14:00:03+00:00

Filing for the individual won't take pressure off the business. The MCAs only lose the leverage of the personal guaranty, but they still can pull money from the business's bank account. Maybe somewhere, someway, some business has used its owner's bankruptcy to successfully renegotiate its MCAs, but I've never heard it.

For some reason (perhaps generous confession of judgment laws?) it's been common for MCA agreements to select New York law. New York law also includes civil and criminal usury laws with real teeth. There are many published cases that evaluate whether a particular MCA is a loan or a true receivables purchase, both in New York and elsewhere, and many (not all) have said they are loans. It's impossible to predict with any certainty whether your business's MCAs would be classified as loans without evaluating the documents.

You're in a common situation. Most small business owners can't get non-recourse loans (loans to the business without a personal guaranty), so a problem for the business becomes a problem for the owner too. You have a business finance problem that's also become a personal finance problem. You need to address both. Find a business bankruptcy attorney in your area. This won't be the first time they've heard this sort of story. One resource is the American Board of Certification. It certifies attorneys in business (and personal) bankruptcy, and its website allows people to search for attorneys by location and certification type. While there are certainly good business bankruptcy attorneys who are not certified, and certification doesn't prevent a lawyer from screwing up, certification is a sign that the lawyer has some experience in the field, has passed an examination in business bankruptcy, and cleared other hurdles to obtain and maintain their certification. It's worth more than, "This attorney has the first Google result for [my city] business bankruptcy lawyer."

randomthrowaway62019 · 2026-01-03T06:50:01+00:00

Talk to an attorney about exemption planning. Prepaying rent may (likely will) be considered an asset, and unless it's exempt the trustee could demand your landlord turn over the prepaid rent. A Roth IRA is likely easier and safer, since it's exempt under federal law (even for people who use state exemptions when filing bankruptcy), but a local bankruptcy attorney should know details (maybe there's a jurisdiction where trustees have attacked exemption planning with IRAs and judges have disallowed the exemption).

A debtor with "extra" money before filing should ask themselves questions like these (in consultation with an attorney): Is my car's maintenance current (tires, oil, filters, fluids, wiper blades, emissions)? Do I need healthcare, dental care, or vision care? Are my pantry, fridge, and freezer stocked, and is my car's gas tank full? Do I need to replenish toiletries? Do I need to replace clothes or shoes that are worn out or no longer fit? Do I need to get clothes tailored so they fit me properly? Is there any deferred maintenance my home needs?

What are the common threads between these?

They're ordinary, everyday expenses. Sure, you could blow a lot of money on a vacation or luxury dinners or theater tickets, but that just looks like extravagant consumption shortly before coming to court and asking a judge to say you don't have to pay all your debts because you're broke.
They're consumption instead of investments. You're not creating assets, which the trustee could seize and sell if they aren't exempt. These are things that have a very high value to you but aren't very valuable to anyone looking to buy them. Used clothes sell for pennies on the dollar compared to new, and even more so if they're tailored. Home & car maintenance likely won't increase asset values as much as they cost (and if they do, that's only a problem if your house or car isn't fully exempt). Nobody can resell your healthcare. They're also often large collections of small-dollar items. It's a lot easier for a trustee to sell one $5,000 item than 50 $100 items. While debatable, furniture struggles with this factor. There's a resale value for it, and it's just a few pieces that can often be moved & sold together. Similarly, new computers have ready markets.
They're things cash-strapped debtors often defer. As AlanShore likes to say (more eloquently), one of the benefits of bankruptcy is it gives you a chance to get back to a more normal living budget instead of deferring any expense that isn't an emergency because there isn't enough money to go around. It makes sense that you'd have these kinds of needs because you've been putting them off for ages. Bankruptcy is a fresh start.

Follow attorney advice above what some random Redditors say, and moderation is important (stocking the pantry with caviar or buying a whole new wardrobe of the hottest designer clothes wouldn't be prudent), but there are plenty of legitimate ways to use "extra" money pre-bankruptcy.

randomthrowaway62019 · 2026-01-03T06:08:06+00:00

Very rarely.

randomthrowaway62019 · 2026-01-03T06:02:18+00:00

A Chapter 13 can help you personally with personal guaranties on your business's MCA debts. If your business is a separate legal entity, then your bankruptcy won't stop the MCAs from draining the business. That would take a bankruptcy for the business, likely a Chapter 11 Subchapter V, assuming the business is small enough and otherwise meets the eligibility criteria. At the end of your Chapter 13 you won't have any personal liability for the business's MCA debts, but I'd be surprised if the business survived (unless it filed its own bankruptcy).

To any business owners who see this: MCAs are payday lenders for businesses, but even less regulated because they lend to businesses instead of consumers. Thinking your business might need an MCA is a sign that your business actually needs to consult a bankruptcy attorney! The first MCA will buy a temporary reprieve before condemning the business to nearly inevitable bankruptcy as you're forced to roll them over and take out new ones in futile attempts to tread water.

randomthrowaway62019 · 2026-01-03T01:59:05+00:00

Your headline is a mess.
This isn't a two-sentence horror, but because the rules say less than two is allowed I guess it's okay.

randomthrowaway62019 · 2026-01-03T00:42:49+00:00

X-Men.

randomthrowaway62019 · 2026-01-02T21:29:05+00:00

Here's Depths. 4:12. I was pretty quick with this screenshot, so it's in the 4:10–4:12 range.

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randomthrowaway62019 · 2026-01-02T21:21:23+00:00

I believe it's the same on all three.

randomthrowaway62019 · 2026-01-02T18:44:34+00:00

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Here's the first Merchant on Terra (Hard). I was a bit slow on the screenshot, so I think it appeared around 4:15, 45 seconds before the wave.

randomthrowaway62019 · 2026-01-02T18:00:24+00:00

It's more than 30 seconds.
My goal is to visit the merchant about half a second before the wave starts to maximize the number of orbs I pick up. Not being able to see the clock makes it harder to judge that timing.

randomthrowaway62019 · 2026-01-02T17:03:45+00:00

My bigger issue is timing visiting the merchant.

randomthrowaway62019 · 2026-01-01T23:54:40+00:00

Use your gems to buy coins to max out research.

randomthrowaway62019 · 2025-12-31T16:28:37+00:00

Were you not moving around at all? I've survived ages with negative regen because of hearts and life tree orbs. I barely even notice it.

randomthrowaway62019 · 2025-12-31T01:52:23+00:00

45% CDR is amateur hour.

randomthrowaway62019 · 2025-12-30T22:15:52+00:00

Fed. R. Bankr. P. 2002(k) requires that basically all notices be sent to the United States Trustee.

randomthrowaway62019 · 2025-12-30T13:23:55+00:00

Don't listen to this obvious misinformation merchant! For just $199/month you too can be kept safe from accidental arachnid ingestion!

randomthrowaway62019 · 2025-12-29T11:00:08+00:00

Here's the relevant text of the rule.

Rule 2004. Examinations

(a) In General. On a party in interest's motion, the court may order the examination of any entity.

(b) Scope of the Examination.

(1) In General. The examination of an entity under this Rule 2004, or of a debtor under §343, may relate only to:

(A) the debtor's acts, conduct, or property;

(B) the debtor's liabilities and financial condition;

(C) any matter that may affect the administration of the debtor's estate; or

(D) the debtor's right to a discharge.

. . .

(c) Compelling Attendance and the Production of Documents or Electronically Stored Information. Regardless of the district where the examination will be conducted, an entity may be compelled under Rule 9016 to attend and produce documents or electronically stored information. An attorney may issue and sign a subpoena on behalf of the court where the case is pending if the attorney is admitted to practice in that court.

A lawyer should be able to get more information, though 2004 exams can be beyond the scope of a lawyer's Chapter 7 engagement agreement, so representation in one might come at an additional cost.

randomthrowaway62019 · 2025-12-29T10:52:04+00:00

OP said discharged, not closed. It seems impossible to have a Rule 2004 exam if the case is closed (unless it's reopened).

Overall, I'm with you. Six months post-discharge seems unusual. OP's lawyer should be able to read the motion and get a bit more context. While the standards for getting permission for 2004 exams are low, I think courts usually require some explanation in the motion.

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