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File:Mutual Indem Treaty 5th Revised.pdf

2023-03-21T14:26:13Z

Joetschida:

2020-11-20T21:29:25Z

Joetschida:

[[FL Operations Summary]]

[[FL Underwriting Summary]]

*[[County or Locally Specific Title Concerns]]

[[FL Underwriting References]]

[[Underwriting Video Library in Florida|FL Underwriting Video Library]]

[[FL Forms]]

[[FL Rates]]

[[FL Education Materials]]

[[FL Remote Online Notarization]]

[[Insuring Easements and Access]]

[[Curative Notice]]

[[FL Surveys - Use of Prior Surveys and Reliance of Prior Policies]]

[[FL Bankruptcy in Florida]]

[https://uww.wfgnationaltitle.com/images/2/2f/County_Log_Ins.xlsx County Log In Info]

File:Survey Affidavit .docx

2020-11-20T21:16:24Z

Joetschida: Joetschida uploaded a new version of File:Survey Affidavit .docx

FL Bankruptcy in Florida

2020-06-27T23:32:52Z

Joetschida: /* XV. Miscellaneous */

===I. Introduction===
:The purpose of this webinar is to explain how title to real property is treated in bankruptcy and to educate title agents as to what is needed to insure title to real property when the title-holder has filed bankruptcy.

===II. Law===
:A. Bankruptcy Code
:B. Bankruptcy Rules
:C. Local Rules

===III. Bankruptcy Chapters===
:A. Chapter 7 – Liquidation
::1. Trustee appointed to liquidate assets and pay claims
::2. All assets, except property allowed as exempt, title vests in bankruptcy estate

:B. Chapter 11– Reorganization
::1. Reorganized business - more for creditors than a liquidation
::2. Debtor in Possession - operates business
::3. Plan of reorganization – approved by creditors and the court
::4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)

:C. Chapter 12 - Farms
:D. Chapter 13 – Person with Income
::1. Reorganization by an individual with an income
::2. Plan approved by court
:::3. Confirm Plan vests title in debtor subject to Plan

===IV. Bankruptcy Schedules===
:11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.
:A. Schedule A – lists all real property
:B. Schedule C - lists exempt real property
:C. Schedule F - lists debts

===V. Bankruptcy Estate===

:Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.
:::Uniform Title Standard (“UTS”) 2.1
:A. Who has title to real property?
::1. 11 USC 541(a) Property of the Estate.
::2. The commencement of case, creates a Bankruptcy Estate:
:::a. All legal and equitable interests of debtor in property as of commencement of case.
:::b. Including debtor’s interesting in entireties property, or tenants in common, or joint tenants are part of the bankruptcy estate until allowed as exempt. See 11 USC 363(h) and UTS 2.1
:::c. Property held by the debtor as trustee becomes part of the estate but only to the extent of the debtor’s interest as trustee and subject to the beneficiary’s interest. UTS 2.1
::3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.
::4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.
::5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.
:B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.
:C. Unscheduled property remains property of the estate.
:D. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”

===VI. How Does Property Come Out of the Bankruptcy Estate?===
:A. Exempt Property. Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
::1. 11 USC 522(b). A debtor may declare certain property exempt from the bankruptcy estate.
:::a. Debtor’s claim of exemptions is presumed valid
:::b. Any party objecting to claimed exemptions has the burden of proof. See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
::2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11 USC 522. Residents of Florida cannot use the Federal Exemptions but can use the Florida Exemptions under the Florida Constitution and Florida Statutes. In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014). a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres outside a municipality
::3. How to Claim Property as Exempt
:::a. Rule 4003 (11 USC 4003):
::::(1) List the homestead on Schedule C
::::(2) Creditors have 30 days after Meeting of Creditors (341 Meeting) to object to any claimed exemptions.
::::(3) The objecting party has the burden of proving that the exemptions are not properly claimed, Rule 4003(c).
::::(4) If objection filed, need court order denying the objection.
::4. Limitation of Amount of homestead exemption when State Exemptions are Elected:
:::a. Under 11 USC 522(p), a debtor may not exempt the amount of any interest acquired by the debtor during the 1215-day period (3 years and 4 months) prior to filing bankruptcy in excess of $125,000.
:::b. Does not include any interest transferred from debtor’s previous homestead acquired prior to the 1215-day period.
:::c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R. 747 (Bankr M.D. Florida 2006)
::5. What happens to the title if homestead not claimed as exempt on Schedule C?
:::a. Homestead not allowed as exempt and remains property of the bankruptcy estate. See Re: O’Malley,601B.R.629 (Bankr ND Illinois
:::2019)
:B. Abandonment
::1. Actual Abandonment:
:::a. Applicable Law
::::(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any property of the estate that is burdensome or of inconsequential value to the estate.”
::::(2) 11 USC 554(b). “Upon request of a party in interest and after notice and a hearing, the court may order the trustee to abandon any property of the estate that is burdensome or inconsequential value to the estate.”
:::b. 11 USC 6007(a): Trustee or DIP shall give Notice of Intent to Abandon Property to:
::::(1) Trustee, debtor, and all creditors
::::(2) A party in interest may file an objection within 14 days mailing the Notice unless court sets a different time.
::::(3) If a timely objection is filed, the court will set a hearing
:::c. Documents to prove abandonment. Record certified copies of:
::::(1) Notice of Intent to Abandon Property
::::(2) Portion of bankruptcy docket showing no objection or request for hearing was filed.
::::(3) If objection is filed or a hearing is requested, a Court Order overruling the objection and authorizing abandonment.
::::(4) Portion of bankruptcy docket showing no appeal of order was filed.
::2. Constructive Abandonment
:::a. Applicable Law
::11 USC 554(c). ''Unless the court orders otherwise, any property scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title.''
::::(1) Property Listed on Schedule A
::::(2) Bankruptcy Case Closed
::::(3) No deed out of Trustee
::If the property is not listed on Schedule A:
::::(1) It remains property of the estate after bankruptcy closed
::::(2) Is not constructively abandoned after bankruptcy closed
::::(3) 11 USC 554(d). “Unless the court orders otherwise, property of the estate that is not abandoned under this section and
that is not administered in the case remains property of the estate.”
:::b. Documents to prove Constructive Abandonment. Record certified copies of:
::::(1) Schedule A showing Property
::::(2) Portion of bankruptcy docket showing bankruptcy case is closed.
::::(3) Trustee’s final report showing that the property was not administered by the trustee.
::3. Effect of Abandonment – property is no longer part of the bankruptcy estate so title re-vests in debtor.
::4. See UTS 2.4
:C. Plan Confirmed (Ch 11 and 13)
::1. 11 USC 1327(b). Ch 13 Vests title back in debtor
::2. 11 USC 1141(b). Ch 11 Vests title back in debtor

===VII. Automatic Stay===
:A. Effect of Automatic Stay
::1. 11 USC 362(a)
::2. When bankruptcy is filed, it operates as a stay of:
:::a. the commencement or continuation of any action against the debtor;
:::b. the enforcement of a judgment against the debtor or against property of the estate;
:::c. any act to create, perfect, or enforce an lien against property of the Estate;
::3. 11 USC 362(c) – stay is in effect until:
:::a. as to specific property until the property is no longer part of the estate i.e. it is abandoned, exempt or sold
:::b. earliest of: time case is closed, case is dismissed, or debtor is granted at discharge
:B. Violating the Stay
::1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
:C. Foreclosures
::1. Effect of Stay
:::a. Foreclosure has to stop – See UTS 2.3
:::b. Any action taken in violation of the stay is void
:::c. Review Docket
:D. Motion For Relief From the Automatic Stay
::1. 11 USC 362(d). Upon request of a party in interest and after notice and a hearing, the court may terminate, annul, modify, or condition the stay
::2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing is required
::3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is stayed until 14 days after the entry of the court orders otherwise.
::4. Documents to record. Certified copies of the following:
::5. Order granting motion for relief
::6. Portion of docket showing Order not appealed
:E. Chapter 13 Order Confirming Plan
::1. In rem proceedings authorized if mortgage is not provided for in Plan
:F. Foreclosure Issue:
::1. FS 702.12 Defenses due to bankruptcy filings
:::a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
:::b. Judicial Notice

===VIII. Postpetition Transactions===
:A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a transfer of property of the estate that occurs after the commencement of the case;
:B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
::1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
::2. Transferee paid the present fair equivalent value;
::3. Transferee’s interest was recorded in the Official Records before the bankruptcy petition was filed.
:C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
:D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

===IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor===
:A. Documents needed to insure a sale or mortgage of homestead (Exempt) property. Record certified copies of the following:
::1. Schedule C showing homestead listed as Exempt
::2. Bankruptcy Docket showing no objection filed during 30-day period after meeting of creditors.
::3. Order denying the objection, if objection was filed
::4. Portion of bankruptcy docket showing no appeal of the Order Authorizing Sale (or mortgage).

===X. Sale of Non-Exempt (Non-Homestead) Property===
:A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of the estate in the ordinary course of the business of the debtor without notice and without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
:B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
:C. “After Notice and a Hearing” – What does that mean?
::1. 11 USC 102(1):
:::a. “After notice and a hearing” means after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances.
:::b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in interest. Filing an objection to the proposed sale is the equivalent of requesting a hearing.
::2. 11 USC 6004(a):
:::a. A notice of a proposed sale of property not in the ordinary course of business shall be given pursuant to Rule 2002(a)(2).
:::b. 11 USC 6004(b): An objection to a proposed sale of property shall be filed and served not less than seven days before the date set for the proposed sale.
:::c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule 9014 regarding contested matters governs the hearing.
:::d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days after entry of the Order unless the court orders otherwise.
::3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct, shall give the debtor, the trustee, and all creditors at least 21 days’ notice by mail of a proposed sale of property of the estate other than in the ordinary course of business unless the court shortens the time or directs another method of giving notice.
::4. 11 USC 2002(c)(1) – Content of Notice
:::a. The Notice of Proposed Sale shall include:
::::(1) Date and Time of Sale
::::(2) Terms and conditions of any private sale
::::(3) Time fixed for filing objections to the sale
::::(4) A general description of real property is sufficient
::5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and c) does not affect the validity of the sale to an entity that purchased the property in good faith.
::6. See UTS 2.2
:D. According to the forgoing provisions, a debtor in possession or a trustee may sell property of the estate by giving at least 21 days’ notice of the sale to the trustee, the debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in possession may sell the property without obtaining a court order. If an objection to the sale is filed or a hearing is requested, a court order authorizing the sale must be obtained.
:E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a Trustee or Debtor in Possession. Record certified copies of:
::1. Notice of Intent to Sell
::2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for hearing was filed
::3. Order Authorizing Sale if objection or request for hearing was filed
::4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the Sale.

===XI. Chapter 11, 13 – Sale Pursuant to Plan===
:A. Plan
::1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the debtor or any other entity, on confirmation of the Plan.
:B. Order Confirming Plan
::1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan, the Order Confirming the Plan vests all property of the estate in debtor.
::2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan, the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
:C. As long as the Plan provides that title vests in the debtor. The following documents are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record certified copies of the following:
::1. Plan
::2. Order Confirming the Plan
::3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

===XII. Judgments===
:A. Judgment Listed in Bankruptcy on Schedule F
::1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977): “A discharge in bankruptcy releases the bankrupt from personal liability for a judgment, but it does not affect a lien which arose from the judgment prior to bankruptcy and which attached to the property …”
::2. Discharge relieves debt but not the lien.
::3. If not homestead, need release of the judgment.
:B. After Acquired Property
::1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977): “judgment debt voided in bankruptcy cannot constitute a lien on after-acquired property.”
::2. Judgment Does Not Attach to after-acquired property if:
:::a. Judgment shown on Schedule F
:::b. Discharge obtained
::::(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to the extent the judgment is a determination of personal liability of the debtor
::::(2) 11 USC 524(a)(2). Discharge operates as an injunction against the commencement or continuation of any action to collect on the debtor discharged as a personal liability of the debtor.
::::(3) See Uniform Title Standard 2.5
::3. What if property loses homestead status after bankruptcy filed?
:::a. 11 USC 524(a)(3). Discharge operates as an injunction against the commencement or continuation of any action to collect against property of the debtor of the debtor acquired after commencement of the bankruptcy discharged as a personal liability of the debtor.
::4. Documents to record as proof judgment discharged and is not a lien on after-acquired property:
:::a. Certified copy of Schedule F showing debt listed
:::b. Certified copy of Discharge of debtor
:C. Homestead
::1. Article X, Section 4(a) of the Florida Constitution provides: "(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
::::(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
::2. 522(f) Order
:::a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs and exemption to which the debtor would have been entitled … if such lien is (A) a judicial lien …”
:::b. “Comfort Order”?
::3. Homestead Affidavit – Use it in lieu of a 522(f) Order

===XIII. Motion to Strip Junior Mortgages===
:A. What is it?
::1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
::2. Chapter 7
::3. Chapter 13
::4. Chapter 20
:B. Law
::1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
:::a. Allowed Secured Claim; or
:::b. Allowed Unsecured Claim
::2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor to modify the rights of the holder of a junior mortgage if there is no equity in the property over and above the first mortgage to strip the junior mortgage from the property.
::3. Cases
:::a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
:::b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
:::c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
:::d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
:C. Record certified copies of the following documents:
:::a. Motion to Strip
:::b. Order Granting Motion to Strip
:::c. Debtor’s Discharge
:::d. Wait 45 days

===XIV. Sale Free and Clear Of Liens===
:A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to sell property free and clear of liens based on the factors listed in 363(f).
:B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be served on parties who have liens or other interests in the property to be sold. Notice required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors and must include the date of the hearing on the motion and the time within which bjections may be filed.
:C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless he Order states otherwise.
:D. Documents to record to insure a sale of property free and clear of liens by trustee or debtor in possession:
::1. Certified copy of Motion to Sell Property Free and Clear
:::a. Motion must identify liens by O.R. Books and Pages
::2. Proof such as the mailing matrix that all interested parties and creditors whose lien is to be divested were provided notice of the motion and hearing.
::3. Certified copy of Order Granting Motion to Sell Property Free and Clear
:::a. Order must identify liens by O.R. Books and Pages.
::4. Portion of docket showing that the Order was not objected to or appealed

===XV. Miscellaneous===
:A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
:B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed, dismissed, or converted to a Ch. 7, 11 or 12.
:C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
:D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a Trustee.
:E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
:F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
:G. 11 USC 1301. Stay against codebtor and relief.
:H. 11 USC 523. List of Non-Dischargeable Debts
:I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if the judgment was discharged in bankruptcy.
:J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T23:30:42Z

Joetschida: /* VI. How Does Property Come Out of the Bankruptcy Estate? */

===I. Introduction===
:The purpose of this webinar is to explain how title to real property is treated in bankruptcy and to educate title agents as to what is needed to insure title to real property when the title-holder has filed bankruptcy.

===II. Law===
:A. Bankruptcy Code
:B. Bankruptcy Rules
:C. Local Rules

===III. Bankruptcy Chapters===
:A. Chapter 7 – Liquidation
::1. Trustee appointed to liquidate assets and pay claims
::2. All assets, except property allowed as exempt, title vests in bankruptcy estate

:B. Chapter 11– Reorganization
::1. Reorganized business - more for creditors than a liquidation
::2. Debtor in Possession - operates business
::3. Plan of reorganization – approved by creditors and the court
::4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)

:C. Chapter 12 - Farms
:D. Chapter 13 – Person with Income
::1. Reorganization by an individual with an income
::2. Plan approved by court
:::3. Confirm Plan vests title in debtor subject to Plan

===IV. Bankruptcy Schedules===
:11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.
:A. Schedule A – lists all real property
:B. Schedule C - lists exempt real property
:C. Schedule F - lists debts

===V. Bankruptcy Estate===

:Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.
:::Uniform Title Standard (“UTS”) 2.1
:A. Who has title to real property?
::1. 11 USC 541(a) Property of the Estate.
::2. The commencement of case, creates a Bankruptcy Estate:
:::a. All legal and equitable interests of debtor in property as of commencement of case.
:::b. Including debtor’s interesting in entireties property, or tenants in common, or joint tenants are part of the bankruptcy estate until allowed as exempt. See 11 USC 363(h) and UTS 2.1
:::c. Property held by the debtor as trustee becomes part of the estate but only to the extent of the debtor’s interest as trustee and subject to the beneficiary’s interest. UTS 2.1
::3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.
::4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.
::5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.
:B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.
:C. Unscheduled property remains property of the estate.
:D. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”

===VI. How Does Property Come Out of the Bankruptcy Estate?===
:A. Exempt Property. Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
::1. 11 USC 522(b). A debtor may declare certain property exempt from the bankruptcy estate.
:::a. Debtor’s claim of exemptions is presumed valid
:::b. Any party objecting to claimed exemptions has the burden of proof. See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
::2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11 USC 522. Residents of Florida cannot use the Federal Exemptions but can use the Florida Exemptions under the Florida Constitution and Florida Statutes. In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014). a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres outside a municipality
::3. How to Claim Property as Exempt
:::a. Rule 4003 (11 USC 4003):
::::(1) List the homestead on Schedule C
::::(2) Creditors have 30 days after Meeting of Creditors (341 Meeting) to object to any claimed exemptions.
::::(3) The objecting party has the burden of proving that the exemptions are not properly claimed, Rule 4003(c).
::::(4) If objection filed, need court order denying the objection.
::4. Limitation of Amount of homestead exemption when State Exemptions are Elected:
:::a. Under 11 USC 522(p), a debtor may not exempt the amount of any interest acquired by the debtor during the 1215-day period (3 years and 4 months) prior to filing bankruptcy in excess of $125,000.
:::b. Does not include any interest transferred from debtor’s previous homestead acquired prior to the 1215-day period.
:::c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R. 747 (Bankr M.D. Florida 2006)
::5. What happens to the title if homestead not claimed as exempt on Schedule C?
:::a. Homestead not allowed as exempt and remains property of the bankruptcy estate. See Re: O’Malley,601B.R.629 (Bankr ND Illinois
:::2019)
:B. Abandonment
::1. Actual Abandonment:
:::a. Applicable Law
::::(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any property of the estate that is burdensome or of inconsequential value to the estate.”
::::(2) 11 USC 554(b). “Upon request of a party in interest and after notice and a hearing, the court may order the trustee to abandon any property of the estate that is burdensome or inconsequential value to the estate.”
:::b. 11 USC 6007(a): Trustee or DIP shall give Notice of Intent to Abandon Property to:
::::(1) Trustee, debtor, and all creditors
::::(2) A party in interest may file an objection within 14 days mailing the Notice unless court sets a different time.
::::(3) If a timely objection is filed, the court will set a hearing
:::c. Documents to prove abandonment. Record certified copies of:
::::(1) Notice of Intent to Abandon Property
::::(2) Portion of bankruptcy docket showing no objection or request for hearing was filed.
::::(3) If objection is filed or a hearing is requested, a Court Order overruling the objection and authorizing abandonment.
::::(4) Portion of bankruptcy docket showing no appeal of order was filed.
::2. Constructive Abandonment
:::a. Applicable Law
::11 USC 554(c). ''Unless the court orders otherwise, any property scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title.''
::::(1) Property Listed on Schedule A
::::(2) Bankruptcy Case Closed
::::(3) No deed out of Trustee
::If the property is not listed on Schedule A:
::::(1) It remains property of the estate after bankruptcy closed
::::(2) Is not constructively abandoned after bankruptcy closed
::::(3) 11 USC 554(d). “Unless the court orders otherwise, property of the estate that is not abandoned under this section and
that is not administered in the case remains property of the estate.”
:::b. Documents to prove Constructive Abandonment. Record certified copies of:
::::(1) Schedule A showing Property
::::(2) Portion of bankruptcy docket showing bankruptcy case is closed.
::::(3) Trustee’s final report showing that the property was not administered by the trustee.
::3. Effect of Abandonment – property is no longer part of the bankruptcy estate so title re-vests in debtor.
::4. See UTS 2.4
:C. Plan Confirmed (Ch 11 and 13)
::1. 11 USC 1327(b). Ch 13 Vests title back in debtor
::2. 11 USC 1141(b). Ch 11 Vests title back in debtor

===VII. Automatic Stay===
:A. Effect of Automatic Stay
::1. 11 USC 362(a)
::2. When bankruptcy is filed, it operates as a stay of:
:::a. the commencement or continuation of any action against the debtor;
:::b. the enforcement of a judgment against the debtor or against property of the estate;
:::c. any act to create, perfect, or enforce an lien against property of the Estate;
::3. 11 USC 362(c) – stay is in effect until:
:::a. as to specific property until the property is no longer part of the estate i.e. it is abandoned, exempt or sold
:::b. earliest of: time case is closed, case is dismissed, or debtor is granted at discharge
:B. Violating the Stay
::1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
:C. Foreclosures
::1. Effect of Stay
:::a. Foreclosure has to stop – See UTS 2.3
:::b. Any action taken in violation of the stay is void
:::c. Review Docket
:D. Motion For Relief From the Automatic Stay
::1. 11 USC 362(d). Upon request of a party in interest and after notice and a hearing, the court may terminate, annul, modify, or condition the stay
::2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing is required
::3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is stayed until 14 days after the entry of the court orders otherwise.
::4. Documents to record. Certified copies of the following:
::5. Order granting motion for relief
::6. Portion of docket showing Order not appealed
:E. Chapter 13 Order Confirming Plan
::1. In rem proceedings authorized if mortgage is not provided for in Plan
:F. Foreclosure Issue:
::1. FS 702.12 Defenses due to bankruptcy filings
:::a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
:::b. Judicial Notice

===VIII. Postpetition Transactions===
:A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a transfer of property of the estate that occurs after the commencement of the case;
:B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
::1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
::2. Transferee paid the present fair equivalent value;
::3. Transferee’s interest was recorded in the Official Records before the bankruptcy petition was filed.
:C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
:D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

===IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor===
:A. Documents needed to insure a sale or mortgage of homestead (Exempt) property. Record certified copies of the following:
::1. Schedule C showing homestead listed as Exempt
::2. Bankruptcy Docket showing no objection filed during 30-day period after meeting of creditors.
::3. Order denying the objection, if objection was filed
::4. Portion of bankruptcy docket showing no appeal of the Order Authorizing Sale (or mortgage).

===X. Sale of Non-Exempt (Non-Homestead) Property===
:A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of the estate in the ordinary course of the business of the debtor without notice and without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
:B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
:C. “After Notice and a Hearing” – What does that mean?
::1. 11 USC 102(1):
:::a. “After notice and a hearing” means after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances.
:::b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in interest. Filing an objection to the proposed sale is the equivalent of requesting a hearing.
::2. 11 USC 6004(a):
:::a. A notice of a proposed sale of property not in the ordinary course of business shall be given pursuant to Rule 2002(a)(2).
:::b. 11 USC 6004(b): An objection to a proposed sale of property shall be filed and served not less than seven days before the date set for the proposed sale.
:::c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule 9014 regarding contested matters governs the hearing.
:::d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days after entry of the Order unless the court orders otherwise.
::3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct, shall give the debtor, the trustee, and all creditors at least 21 days’ notice by mail of a proposed sale of property of the estate other than in the ordinary course of business unless the court shortens the time or directs another method of giving notice.
::4. 11 USC 2002(c)(1) – Content of Notice
:::a. The Notice of Proposed Sale shall include:
::::(1) Date and Time of Sale
::::(2) Terms and conditions of any private sale
::::(3) Time fixed for filing objections to the sale
::::(4) A general description of real property is sufficient
::5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and c) does not affect the validity of the sale to an entity that purchased the property in good faith.
::6. See UTS 2.2
:D. According to the forgoing provisions, a debtor in possession or a trustee may sell property of the estate by giving at least 21 days’ notice of the sale to the trustee, the debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in possession may sell the property without obtaining a court order. If an objection to the sale is filed or a hearing is requested, a court order authorizing the sale must be obtained.
:E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a Trustee or Debtor in Possession. Record certified copies of:
::1. Notice of Intent to Sell
::2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for hearing was filed
::3. Order Authorizing Sale if objection or request for hearing was filed
::4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the Sale.

===XI. Chapter 11, 13 – Sale Pursuant to Plan===
:A. Plan
::1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the debtor or any other entity, on confirmation of the Plan.
:B. Order Confirming Plan
::1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan, the Order Confirming the Plan vests all property of the estate in debtor.
::2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan, the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
:C. As long as the Plan provides that title vests in the debtor. The following documents are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record certified copies of the following:
::1. Plan
::2. Order Confirming the Plan
::3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

===XII. Judgments===
:A. Judgment Listed in Bankruptcy on Schedule F
::1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977): “A discharge in bankruptcy releases the bankrupt from personal liability for a judgment, but it does not affect a lien which arose from the judgment prior to bankruptcy and which attached to the property …”
::2. Discharge relieves debt but not the lien.
::3. If not homestead, need release of the judgment.
:B. After Acquired Property
::1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977): “judgment debt voided in bankruptcy cannot constitute a lien on after-acquired property.”
::2. Judgment Does Not Attach to after-acquired property if:
:::a. Judgment shown on Schedule F
:::b. Discharge obtained
::::(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to the extent the judgment is a determination of personal liability of the debtor
::::(2) 11 USC 524(a)(2). Discharge operates as an injunction against the commencement or continuation of any action to collect on the debtor discharged as a personal liability of the debtor.
::::(3) See Uniform Title Standard 2.5
::3. What if property loses homestead status after bankruptcy filed?
:::a. 11 USC 524(a)(3). Discharge operates as an injunction against the commencement or continuation of any action to collect against property of the debtor of the debtor acquired after commencement of the bankruptcy discharged as a personal liability of the debtor.
::4. Documents to record as proof judgment discharged and is not a lien on after-acquired property:
:::a. Certified copy of Schedule F showing debt listed
:::b. Certified copy of Discharge of debtor
:C. Homestead
::1. Article X, Section 4(a) of the Florida Constitution provides: "(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
::::(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
::2. 522(f) Order
:::a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs and exemption to which the debtor would have been entitled … if such lien is (A) a judicial lien …”
:::b. “Comfort Order”?
::3. Homestead Affidavit – Use it in lieu of a 522(f) Order

===XIII. Motion to Strip Junior Mortgages===
:A. What is it?
::1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
::2. Chapter 7
::3. Chapter 13
::4. Chapter 20
:B. Law
::1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
:::a. Allowed Secured Claim; or
:::b. Allowed Unsecured Claim
::2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor to modify the rights of the holder of a junior mortgage if there is no equity in the property over and above the first mortgage to strip the junior mortgage from the property.
::3. Cases
:::a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
:::b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
:::c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
:::d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
:C. Record certified copies of the following documents:
:::a. Motion to Strip
:::b. Order Granting Motion to Strip
:::c. Debtor’s Discharge
:::d. Wait 45 days

===XIV. Sale Free and Clear Of Liens===
:A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to sell property free and clear of liens based on the factors listed in 363(f).
:B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be served on parties who have liens or other interests in the property to be sold. Notice required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors and must include the date of the hearing on the motion and the time within which bjections may be filed.
:C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless he Order states otherwise.
:D. Documents to record to insure a sale of property free and clear of liens by trustee or debtor in possession:
::1. Certified copy of Motion to Sell Property Free and Clear
:::a. Motion must identify liens by O.R. Books and Pages
::2. Proof such as the mailing matrix that all interested parties and creditors whose lien is to be divested were provided notice of the motion and hearing.
::3. Certified copy of Order Granting Motion to Sell Property Free and Clear
:::a. Order must identify liens by O.R. Books and Pages.
::4. Portion of docket showing that the Order was not objected to or appealed

===XV. Miscellaneous===
:A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
:B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed, dismissed, or converted to a Ch. 7, 11 or 12.
:C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
:D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a Trustee.
:E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
:F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G:. 11 USC 1301. Stay against codebtor and relief.
:H. 11 USC 523. List of Non-Dischargeable Debts
:I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if the judgment was discharged in bankruptcy.
:J. Discharged does not mean the case is closed

Insuring Easements and Access

2020-06-27T23:28:14Z

Joetschida:

===I. A TITLE INSURANCE POLICY IS NOT A GUARANTEE OR WARRANTY OF ACCESS===
:A. Contract of Indemnity

::A title insurance policy is a contact between the insured and the title insurer whereby the title insurer agrees to indemnify the insured for damages incurred due to a covered risk such as a lack of legal access. In the Conditions of both the Owner’s and Loan Policy Jackets at Section 8, the policies provide as follows:

:::“''This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy.''”

:::In Lawyers Title Insurance Co. v. Synergism One Corp., 572 So.2d 517, 518 (4th DCA 1990), the 4th DCA stated that: “A title policy indemnifies rather than guarantees the state of the insured title.”. In Village Carver Phase 1, LLC v. Fidelity Nat.Title Ins. Co., 128 So.3d 107, 111 (Fla. 3 DCA 2013), the 3d DCA stated:

:::“''Title insurance policies are indemnity contracts against actual monetary loss resulting from specified causes, such as defects, liens and encumbrances existing on the date the insurance policy is issued.”''

:::In CMEI, Inc. v. American Title Insurance Company, 447 So.2d 427, 428 (Fla. 5 DCA 1984), Judge Cowart stated that title policies are:
::::“[C]ontracts of indemnity, under which the insurer agrees to indemnify the insured up to a specific amount against loss or damage resulting from liens, encumbrances or title defects and claims within its coverages”.

:::Because a title policy is a contract of indemnity, the Insured will be indemnified i.e. compensated, for a loss incurred due to a title issue covered by the policy such as a lack of legal access.

:B. Option to Pay

::Since a title policy is a contract of indemnity, when a title claim is submitted to the title insurer, the title insurer has the option under Condition 7(b)(ii) to pay or settle the claim with the insured, or under 7(b)(i), to pay or settle the title claim with a third party alleging some interest in the property. Condition 7 of the policy provides:

::7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY
“In case of a claim under this policy, the Company shall have the following additional options:
* * *
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.
(i) To pay or otherwise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or
(ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay.”

Under the last sentence of Condition 7(b), the policy provides that the payment by the title insurer to indemnify the insured or to settle the title claim with a third party resolves the insurer’s obligations under the policy to the insured for that particular title claim:

“''Upon the exercise by the Company of either of the options provided for in subsections [7] (b)(i) or (ii), the Company’s obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.”''

:C. Option to Cure

::While the title policy is a contract of indemnity obligating the title insurer to indemnify the insured for a covered loss, under Condition 5(b) of the title policy, the title insurer has the option to cure the title defect including a lack of legal access by any method including litigation. Condition 5(b) of the Owner’s and Loan policies provides:

:::“The Company shall have the right, in addition to the options contained in Section 7 of these Conditions, at its own cost, to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as insured, or to prevent or reduce loss or damage to the Insured.”

::Additionally, Condition 9(a) of the Owner’s and Loan policies provides that if the title defect or lack of legal access is cured in a reasonably diligent manner, the title insurer will have performed its obligations under the title policy. Condition 9(a) provides:

“(a) If the Company establishes the Title, or removes the alleged defect, lien, or encumbrance, or cures the lack of a right of access to or from the Land, or cures the claim of Unmarketable Title, all as insured, in a reasonably diligent manner by any method, including litigation and the completion of any appeals, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the Insured.”

:D. Third Option

::There is a Third Option available to a title insurer to fulfill its obligations to an Insured under a title insurance policy. Under Condition 7(a) of the policy, a title insurer may pay the entire policy limit to the insured; and thereby, terminate all liability and obligations of the title insurer to its insured under the title policy. The “Third Option” is only utilized when the amount of the title policy is small. For example, if a claim is going to cost the title insurer $10,000 to obtain legal access for the insured property but the amount of the title policy is only $5,000, the title insurer would probably exercise the third option and tender the entire policy limit to the insured and terminate all liability under the policy. Condition 7(a) of the policy provides:

:::“In case of a claim under this policy, the Company shall have the following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay.
Upon the exercise by the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.”

===II. POLICY COVERAGE===

:A Title Insurance Policy consists of a Jacket, Schedule A, Schedule B-1, and Endorsements. Loan Policies also have a Schedule B-2 for subordinate matters. These materials only discuss the policy jacket which contains the coverages, the conditions, and the exclusions from coverage.

::A. Policy Jacket

:::The current version of the title insurance jacket in use in Florida for both the Owner’s Policy and the Loan Policy is the American Land Title Association (“ALTA”) 6-17-06 Jacket with Florida Modifications.

::B. Covered Risks

:::At the top of the first page of the policy jacket labeled “COVERED RISKS”, the policy provides:

::::“SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE CONDITIONS, WFG NATIONAL TITLE INSURANCE COMPANY, a South Carolina corporation (the “Company”) insures, as of Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of:”

:::After the forgoing, the owner’s policy jacket lists ten title issues that are insured by the policy (fourteen in the loan policy) which are titled “Covered Risks”.

::C. Covered Risk #4

:::Subject to the exclusions, the exceptions, and the conditions contained in the policy jacket, the Covered Risks set forth the title issues insured by the policy. Covered Risk #4 covers access and insures against loss or damage incurred by the Insured by reason of:

“4. No right of access to and from the Land.”

:::Covered Risk #4 is phrased in the negative in that it does not insure that there is access to the property but instead insures against loss or damage incurred by the insured in the event that there is no right of access to the property. The coverage is phrased that way because the policy is a contract of indemnity rather than a guarantee or warranty of access. Throughout these materials, I will be using the phrase “insures access” even though Covered Risk #4 of the policy only insures against loss or damage in the event that the property does not have a right of access.

:D. Legal Access
::Covered Risk #4 insures a “right of access” to the property which is legal access or a “legal right of access”. Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122 (Cal. 4th DCA 2002). A title insurance policy does not insure that there is physical access to the property, or that the physical access is easy. See Title & Trust Co. v. Barrows, 381 So.2d 1088 (Fla. 1st DCA 1979); Krause v. Title & Trust Co., 390 So.2d 805 (Fla. 5th DCA 1980); Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App 4th 122 (Cal. 4th DCA 2002); 43 Park Owners Group v. Commonwealth Land Title Ins. Co., 121 A.D.3d 937 (N.Y. 2014); Fidelity Natl Title v. Woody Creek Ventures, 830 F.3d 1209 (U.S. 10th Cir. 2016); Gates v. Chicago Title Ins. Co., 813 S.W.2d 10 (Missouri Western Dist. 1991).

::Regarding legal access and the quality of physical access, the court in Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122 at 125, stated: “coverage for a lack of right of access to the insured property is not triggered where [physical] access is merely impractical or difficult as long as the right to access exists.” In Krause v. Title & Trust, 390 So.2d 805, at 806, a right of access existed even though the route for that legal access was over a road that was not passable in a normal passenger vehicle without substantial clay or rock fill. In Title & Trust v. Barrows, 381 So.2d 1088, at 1090, legal access via a platted road which road was merely a continuation of a sandy beach that was covered by high tide during spring and fall constituted a right of access. In Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122, legal access for a repair shop owned by Magna was through a shopping center adjacent to the repair shop which was also owned by Magna. That access constituted legal access even though the physical access through the shopping center parcel was difficult or impossible due to the shopping center parking lot being 2.5 feet higher than the parking lot for the repair shop.
Alternatively, a road may exist that provides physical access to the property and yet the property may not have a right of access if there is no legal basis for the road to exist. There must be a legal basis for the creation of the road for that road to provide legal of access.

::Unless the title policy insures a separate access easement, the policy does not insure any particular route of access. Therefore, as long as there is legal access to the property by any route, the title insurer’s obligations under Covered Risk #4 of the policy are fulfilled.

===III. TYPES OF ACCESS===

:A. Platted Streets

::Under Florida Statute 177.085(3), all streets, alleys and easements shown on a plat are dedicated to the public unless stated otherwise in the plat. Even if the streets shown on a plat are private streets, owners of lots in the subdivision have the right to use those platted streets. Therefore, as long as the platted streets lead to a public road, those streets provide legal access to the property and fulfill a title insurer’s obligations under Covered Risk #4 insuring a right of access. Title insurers do not specifically insure platted roads even though lenders sometimes make that request.

:B. Easements

::Anytime a property is not a platted lot or a condominium unit, legal access should be questioned and verified. An access easement should be obtained if a title search reveals that the property does not have legal access.

:::1. Created in Deed

::::If a seller is conveying a parcel of landlocked property to a buyer together with an easement over other property owned by the seller to provide legal access, the seller can create that easement in the deed conveying the landlocked parcel to the buyer. For example, if the seller owns Parcels A and B, and Parcel A is being conveyed together with an easement over the west 25 feet of Parcel B for access, the easement over Parcel B can be created in the conveyance of Parcel A with the following language:

::::“Parcel A . . . together with a perpetual non-exclusive easement for access over the west 25 feet of Parcel B that runs with the land for the benefit of the grantee [Buyer], his/her successors and assigns”.

:::2. Separate Document

::::The easement in the foregoing example does not have to be created in the deed conveying Parcel A, the easement may also be created in a separate Easement Agreement executed by the seller. If the seller of Parcel A does not also own Parcel B, then a separate Easement Agreement would have to be obtained from the owner of Parcel B to provide access for Parcel A.

::::If requested by the a buyer, the easement described in subparagraphs IV.B (1) and (2) can be insured as an additional insured Parcel in the policy. Two parcels would be insured: (1) Parcel A as to a fee interest vested in the insured buyer; and (2) the easement over the West 25 feet of Parcel B. Even though the easement would be insured by the title policy, the policy would contain an exception for the terms of the easement whether the easement was created in a deed or by a separate instrument.

:::3. Reserve an Easement

::::If the foregoing Example is changed so that the owner of Parcels A and B is selling Parcel B instead of Parcel A. Since Parcel A, in this example, is landlocked and needs an easement over Parcel B for access, when Parcel B is conveyed to the buyer, the seller will need to reserve an easement over Parcel B for the benefit of Parcel A in the deed conveying Parcel B to the buyer. The language to reserve the easement would be:

“Subject to a perpetual non-exclusive easement for access reserved in favor of the grantor, his/her successors and assigns, over the west 25 feet of Parcel B for the benefit of Parcel A to run with the land.”

In this example, a title insurance policy insuring Parcel B would contain an exception for the easement reserved in the deed because Parcel B would be burdened by that easement.

:C. Municipality, County, and State Maintained Roads

::If a property is adjacent to a physical road but a search of the Public Records does not reveal a legal basis for the road to exist i.e. no dedication, no conveyance, no easement, or no creation in a declaration of covenants, conditions and restrictions, the property might still have legal access under Florida Statute 95.361.

::1. Constructed by County, Municipality, or DOT

:::Under F.S. 95.361(1), if the County, Municipality, or the Department of Transportation constructed a road and maintained or repaired that road continuously and uninterruptedly for 4 years, the road is deemed dedicated to the public to the extent of the width maintained. And, title to the road vests in the County if the road is a county road; in the municipality if the road is a municipal street; or in the State of Florida if the road is in the State Highway System or the State Park Road System.

::2. Maintained by County, Municipality, or DOT

:::Under F.S. 95.361(2), if the County, Municipality, or the Department of Transportation did not construct the road but has maintained or repaired the road continuously and uninterruptedly for 7 years, the road is deemed dedicated to the public to the extent of the width maintained. And, as with F.S. 95.361(1), title to the road vests in the County, the Municipality,
or the State of Florida depending upon whether the road is a County, Municipal, or State road.

:D. Other Types of Access

::1. Ways of Necessity
::2. Prescriptive Easements

:::The foregoing types of access will be explained in another Section of these materials by another author. However, from a title insurance standpoint, a title insurer will not rely on these types of access until a court has entered a final judgment against the pertinent parties establishing access using the foregoing as a legal basis for that access.

==IV. EASEMENT ISSUES==

:A. “Subject To

::The words “subject to” are insufficient in and of themselves to create an easement. “Subject to” language has been held to be words of qualification of the estate being conveyed rather than words of contract to create an easement. Procacci v. Zacco, 324 So.2d 180 (Fla. 4 DCA 1975), Robertia v. Pine Tree Water Control Dist., 516 So.2d 1012 (Fla. 4 DCA 1987). The Procacci court, 324 So.2d 180, 182, held that the following clause in a deed from an estate to Phillips Petroleum did not create an easement:

:::“Subject to an easement for road right-of-way over the South 25 feet of the North 235 feet above the described land”

:::The 4th DCA in Procacci stated:

::::“At best the use of the words ‘subject to’ in an attempt to create an easement leads to unclear and ambiguous results, [citation omitted]. To understand the intentions of the parties (which should be understandable when reading the instrument), recourse must be had to the surrounding agreements and circumstances. Without such facts and circumstances, no easement is created when the words ‘subject to’ are used.” Id. at 182.

:::The words “subject to” in a deed create an ambiguity that allows a court to hear extrinsic evidence to ascertain the intent of the parties at the time the “subject to” deed was executed. Hastie v. Ekholm, 199 So.3d 461 (Fla. 4 DCA 2016). In in Hastie v. Ekholm, several lots in an unrecorded plat were conveyed by a common grantor with the following language:

::::“SUBJECT TO an easement for road purposes over the East 30.0 feet.”

::The east 30 feet of those lots became a road known as Clark Lane. The 4th DCA in Hastie stated that since the deeds were ambiguous the trial court was “correct in looking at the circumstances surrounding the common grantor’s original conveyance of the lots on Clark Lane” to determine the intent of the grantor. Id at 464. The Hastie Court, held that “[t]he deeds in this case demonstrated that the common grantors intended that [a] private road run up and down the east side of the lots on Clark Lane.” Id. at 464.

::In Behm v. Saeli, 560 So.2d 431 (Fla. 5 DCA 1990), a conveyance of 10 acres contained the following clause:

:::“SUBJECT to a 30 foot wide Ingress and Egress Easement along the East line”.

::That clause was determined by the trial court to not create an easement. However, the 5th DCA reversed the trial court and held that based upon all of the evidence of the circumstances of the agreement between the original parties, the parties to the deed intended to create an easement with the “subject to” language. Id. at 432.

::Generally, the title industry will not rely on easements attempted to be created using “subject to” language unless there is a final judgment affirming that the easement was validly created.

:B. Language to Create Easement

::1. Reserving an Easement

:::When a seller is conveying property to a buyer and is reserving an easement over the property being conveyed for the benefit of other property owned and retained by the seller, the language to reserve that easement over Lot 1 for the benefit of Lot 2, is:

::::“Lot 1 . . . subject to a perpetual non-exclusive easement for access over the East 30 feet of Lot 1 reserved in favor of the grantor, his/her successors and assigns, for the benefit of Lot 2 and which runs with land.”

::2. Conveying an Easement

:::When a seller is conveying a lot to a buyer together with an easement over other property owned by the seller, the language to create the easement when, for example, Lot 1 is being conveyed by the seller together with an easement over Lot 2 owned by the seller, is:

::::“Lot 1 . . . together with a perpetual non-exclusive easement for access over the East 30
feet of Lot 2 for the benefit of Lot 1 and for the benefit of the grantee, his/her successors
and assigns, that runs with the land.”

:C. Appurtenant Easements

::Access based on an easement that was created in the back chain of title when the easement has not been referenced in deeds conveying the dominant parcel after the easement was created can be insured if the easement is an appurtenant easement. “[A]n appurtenant easement is a permanent easement running with the land and passes incident to it.” Morris v. Winbar LLC, 273 So.3d 176 (Fla. 1 DCA 2019). The dominant estate receives the benefit of an easement and the servient estate is burdened by the easement. Id. When an easement is appurtenant, it stays with the dominant estate and travels with a conveyance of the dominant estate whether the easement is specifically referenced in the deed or not. Therefore, an appurtenant easement created in the back chain of title can be relied upon to insure access whether or not the easement is referenced in conveyances of the dominant estate after the easement was created.

==V. EXCEPTIONS FOR EASEMENTS==

:A. Burdened Property

::A title insurance policy will always make exceptions for the terms of easements that burden the insured property because the easement affects the fee owner’s full use of the property.

:B. Benefited Property

::A title insurance policy will also make exceptions for the terms of easements that benefit the insured property because the use of that easement is limited by the terms of the easement such as width, length, duration, quantity of use, or time of use.

:C. Matters on Survey

::Any roads, paths, trails or power lines shown on a survey as traversing the insured property will be listed as exceptions in the title policy because they affect the insured owner’s use of the property. If there are no recorded documents creating the road, path, trail, or power line, the policy will contain the following exception: “Possible prescriptive easement for the [road, path, trail or power line] shown on the survey prepared by John Smith Surveying dated ______________, Job No.: __________.”

==VI. INSURING EASEMENTS CONTAINED IN EXCEPTIONS==

:In commercial transactions, lender’s counsel and buyer’s counsel occasionally request
that certain easements contained in the exceptions listed in the title commitment be insured, such
as reciprocal parking easements or joint entrance easements. These non-exclusive easements can usually be insured as an additional parcel in the policy with the following or similar language:

::“Non-exclusive reciprocal parking Easement Agreement recorded in Official Records Book 1234 Page 567 Public Records of Orange County, Florida.”

:Even though the easement is insured, the policy will contain an exception for the terms of the easement because the use of the easement is limited by its terms.

Insuring Easements and Access

2020-06-27T23:22:30Z

Joetschida: /* III. TYPES OF ACCESS */

==I. A TITLE INSURANCE POLICY IS NOT A GUARANTEE OR WARRANTY OF ACCESS==

:A. Contract of Indemnity

::A title insurance policy is a contact between the insured and the title insurer whereby the title insurer agrees to indemnify the insured for damages incurred due to a covered risk such as a lack of legal access. In the Conditions of both the Owner’s and Loan Policy Jackets at Section 8, the policies provide as follows:

:::“''This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy.''”

:::In Lawyers Title Insurance Co. v. Synergism One Corp., 572 So.2d 517, 518 (4th DCA 1990), the 4th DCA stated that: “A title policy indemnifies rather than guarantees the state of the insured title.”. In Village Carver Phase 1, LLC v. Fidelity Nat.Title Ins. Co., 128 So.3d 107, 111 (Fla. 3 DCA 2013), the 3d DCA stated:

:::“''Title insurance policies are indemnity contracts against actual monetary loss resulting from specified causes, such as defects, liens and encumbrances existing on the date the insurance policy is issued.”''

:::In CMEI, Inc. v. American Title Insurance Company, 447 So.2d 427, 428 (Fla. 5 DCA 1984), Judge Cowart stated that title policies are:
“[C]ontracts of indemnity, under which the insurer agrees to indemnify the insured up to
a specific amount against loss or damage resulting from liens, encumbrances or title
defects and claims within its coverages”.

:::Because a title policy is a contract of indemnity, the Insured will be indemnified i.e. compensated, for a loss incurred due to a title issue covered by the policy such as a lack of legal access.

:B. Option to Pay

:Since a title policy is a contract of indemnity, when a title claim is submitted to the title insurer, the title insurer has the option under Condition 7(b)(ii) to pay or settle the claim with the insured, or under 7(b)(i), to pay or settle the title claim with a third party alleging some interest in the property. Condition 7 of the policy provides:

::7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY
“In case of a claim under this policy, the Company shall have the following additional options:
* * *
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.
(i) To pay or otherwise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or
(ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay.”

Under the last sentence of Condition 7(b), the policy provides that the payment by the title insurer to indemnify the insured or to settle the title claim with a third party resolves the insurer’s obligations under the policy to the insured for that particular title claim:

“''Upon the exercise by the Company of either of the options provided for in subsections [7] (b)(i) or (ii), the Company’s obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.”''

:C. Option to Cure

::While the title policy is a contract of indemnity obligating the title insurer to indemnify the insured for a covered loss, under Condition 5(b) of the title policy, the title insurer has the option to cure the title defect including a lack of legal access by any method including litigation. Condition 5(b) of the Owner’s and Loan policies provides:

:::“The Company shall have the right, in addition to the options contained in Section 7 of these Conditions, at its own cost, to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as insured, or to prevent or reduce loss or damage to the Insured.”

::Additionally, Condition 9(a) of the Owner’s and Loan policies provides that if the title defect or lack of legal access is cured in a reasonably diligent manner, the title insurer will have performed its obligations under the title policy. Condition 9(a) provides:

“(a) If the Company establishes the Title, or removes the alleged defect, lien, or encumbrance, or cures the lack of a right of access to or from the Land, or cures the claim of Unmarketable Title, all as insured, in a reasonably diligent manner by any method, including litigation and the completion of any appeals, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the Insured.”

:D. Third Option

::There is a Third Option available to a title insurer to fulfill its obligations to an Insured under a title insurance policy. Under Condition 7(a) of the policy, a title insurer may pay the entire policy limit to the insured; and thereby, terminate all liability and obligations of the title insurer to its insured under the title policy. The “Third Option” is only utilized when the amount of the title policy is small. For example, if a claim is going to cost the title insurer $10,000 to obtain legal access for the insured property but the amount of the title policy is only $5,000, the title insurer would probably exercise the third option and tender the entire policy limit to the insured and terminate all liability under the policy. Condition 7(a) of the policy provides:

:::“In case of a claim under this policy, the Company shall have the following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay.
Upon the exercise by the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.”

==II. POLICY COVERAGE==

:A Title Insurance Policy consists of a Jacket, Schedule A, Schedule B-1, and Endorsements. Loan Policies also have a Schedule B-2 for subordinate matters. These materials only discuss the policy jacket which contains the coverages, the conditions, and the exclusions from coverage.

::A. Policy Jacket

:::The current version of the title insurance jacket in use in Florida for both the Owner’s Policy and the Loan Policy is the American Land Title Association (“ALTA”) 6-17-06 Jacket with Florida Modifications.

::B. Covered Risks

:::At the top of the first page of the policy jacket labeled “COVERED RISKS”, the policy provides:

“SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE CONDITIONS, WFG NATIONAL TITLE INSURANCE COMPANY, a South Carolina corporation (the “Company”) insures, as of Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of:”

:::After the forgoing, the owner’s policy jacket lists ten title issues that are insured by the policy (fourteen in the loan policy) which are titled “Covered Risks”.

::C. Covered Risk #4

:::Subject to the exclusions, the exceptions, and the conditions contained in the policy jacket, the Covered Risks set forth the title issues insured by the policy. Covered Risk #4 covers access and insures against loss or damage incurred by the Insured by reason of:

“4. No right of access to and from the Land.”

:::Covered Risk #4 is phrased in the negative in that it does not insure that there is access to the property but instead insures against loss or damage incurred by the insured in the event that there is no right of access to the property. The coverage is phrased that way because the policy is a contract of indemnity rather than a guarantee or warranty of access. Throughout these materials, I will be using the phrase “insures access” even though Covered Risk #4 of the policy only insures against loss or damage in the event that the property does not have a right of access.

:D. Legal Access
::Covered Risk #4 insures a “right of access” to the property which is legal access or a “legal right of access”. Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122 (Cal. 4th DCA 2002). A title insurance policy does not insure that there is physical access to the property, or that the physical access is easy. See Title & Trust Co. v. Barrows, 381 So.2d 1088 (Fla. 1st DCA 1979); Krause v. Title & Trust Co., 390 So.2d 805 (Fla. 5th DCA 1980); Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App 4th 122 (Cal. 4th DCA 2002); 43 Park Owners Group v. Commonwealth Land Title Ins. Co., 121 A.D.3d 937 (N.Y. 2014); Fidelity Natl Title v. Woody Creek Ventures, 830 F.3d 1209 (U.S. 10th Cir. 2016); Gates v. Chicago Title Ins. Co., 813 S.W.2d 10 (Missouri Western Dist. 1991).

::Regarding legal access and the quality of physical access, the court in Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122 at 125, stated: “coverage for a lack of right of access to the insured property is not triggered where [physical] access is merely impractical or difficult as long as the right to access exists.” In Krause v. Title & Trust, 390 So.2d 805, at 806, a right of access existed even though the route for that legal access was over a road that was not passable in a normal passenger vehicle without substantial clay or rock fill. In Title & Trust v. Barrows, 381 So.2d 1088, at 1090, legal access via a platted road which road was merely a continuation of a sandy beach that was covered by high tide during spring and fall constituted a right of access. In Magna Enterprises, Inc. v. Fidelity Natl Title, 104 Cal.App.4th 122, legal access for a repair shop owned by Magna was through a shopping center adjacent to the repair shop which was also owned by Magna. That access constituted legal access even though the physical access through the shopping center parcel was difficult or impossible due to the shopping center parking lot being 2.5 feet higher than the parking lot for the repair shop.
Alternatively, a road may exist that provides physical access to the property and yet the property may not have a right of access if there is no legal basis for the road to exist. There must be a legal basis for the creation of the road for that road to provide legal of access.

::Unless the title policy insures a separate access easement, the policy does not insure any particular route of access. Therefore, as long as there is legal access to the property by any route, the title insurer’s obligations under Covered Risk #4 of the policy are fulfilled.

==III. TYPES OF ACCESS==

:A. Platted Streets

::Under Florida Statute 177.085(3), all streets, alleys and easements shown on a plat are dedicated to the public unless stated otherwise in the plat. Even if the streets shown on a plat are private streets, owners of lots in the subdivision have the right to use those platted streets. Therefore, as long as the platted streets lead to a public road, those streets provide legal access to the property and fulfill a title insurer’s obligations under Covered Risk #4 insuring a right of access. Title insurers do not specifically insure platted roads even though lenders sometimes make that request.

:B. Easements

::Anytime a property is not a platted lot or a condominium unit, legal access should be questioned and verified. An access easement should be obtained if a title search reveals that the property does not have legal access.

:::1. Created in Deed

::::If a seller is conveying a parcel of landlocked property to a buyer together with an easement over other property owned by the seller to provide legal access, the seller can create that easement in the deed conveying the landlocked parcel to the buyer. For example, if the seller owns Parcels A and B, and Parcel A is being conveyed together with an easement over the west 25 feet of Parcel B for access, the easement over Parcel B can be created in the conveyance of Parcel A with the following language:

::::“Parcel A . . . together with a perpetual non-exclusive easement for access over the west 25 feet of Parcel B that runs with the land for the benefit of the grantee [Buyer], his/her successors and assigns”.

:::2. Separate Document

::::The easement in the foregoing example does not have to be created in the deed conveying Parcel A, the easement may also be created in a separate Easement Agreement executed by the seller. If the seller of Parcel A does not also own Parcel B, then a separate Easement Agreement would have to be obtained from the owner of Parcel B to provide access for Parcel A.

::::If requested by the a buyer, the easement described in subparagraphs IV.B (1) and (2) can be insured as an additional insured Parcel in the policy. Two parcels would be insured: (1) Parcel A as to a fee interest vested in the insured buyer; and (2) the easement over the West 25 feet of Parcel B. Even though the easement would be insured by the title policy, the policy would contain an exception for the terms of the easement whether the easement was created in a deed or by a separate instrument.

:::3. Reserve an Easement

::::If the foregoing Example is changed so that the owner of Parcels A and B is selling Parcel B instead of Parcel A. Since Parcel A, in this example, is landlocked and needs an easement over Parcel B for access, when Parcel B is conveyed to the buyer, the seller will need to reserve an easement over Parcel B for the benefit of Parcel A in the deed conveying Parcel B to the buyer. The language to reserve the easement would be:

“Subject to a perpetual non-exclusive easement for access reserved in favor of the grantor, his/her successors and assigns, over the west 25 feet of Parcel B for the benefit of Parcel A to run with the land.”

In this example, a title insurance policy insuring Parcel B would contain an exception for the easement reserved in the deed because Parcel B would be burdened by that easement.

:C. Municipality, County, and State Maintained Roads

::If a property is adjacent to a physical road but a search of the Public Records does not reveal a legal basis for the road to exist i.e. no dedication, no conveyance, no easement, or no creation in a declaration of covenants, conditions and restrictions, the property might still have legal access under Florida Statute 95.361.

::1. Constructed by County, Municipality, or DOT

:::Under F.S. 95.361(1), if the County, Municipality, or the Department of Transportation constructed a road and maintained or repaired that road continuously and uninterruptedly for 4 years, the road is deemed dedicated to the public to the extent of the width maintained. And, title to the road vests in the County if the road is a county road; in the municipality if the road is a municipal street; or in the State of Florida if the road is in the State Highway System or the State Park Road System.

::2. Maintained by County, Municipality, or DOT

:::Under F.S. 95.361(2), if the County, Municipality, or the Department of Transportation did not construct the road but has maintained or repaired the road continuously and uninterruptedly for 7 years, the road is deemed dedicated to the public to the extent of the width maintained. And, as with F.S. 95.361(1), title to the road vests in the County, the Municipality,
or the State of Florida depending upon whether the road is a County, Municipal, or State road.

:D. Other Types of Access

::1. Ways of Necessity
::2. Prescriptive Easements

:::The foregoing types of access will be explained in another Section of these materials by another author. However, from a title insurance standpoint, a title insurer will not rely on these types of access until a court has entered a final judgment against the pertinent parties establishing access using the foregoing as a legal basis for that access.

==IV. EASEMENT ISSUES==

:A. “Subject To

::The words “subject to” are insufficient in and of themselves to create an easement. “Subject to” language has been held to be words of qualification of the estate being conveyed rather than words of contract to create an easement. Procacci v. Zacco, 324 So.2d 180 (Fla. 4 DCA 1975), Robertia v. Pine Tree Water Control Dist., 516 So.2d 1012 (Fla. 4 DCA 1987). The Procacci court, 324 So.2d 180, 182, held that the following clause in a deed from an estate to Phillips Petroleum did not create an easement:

:::“Subject to an easement for road right-of-way over the South 25 feet of the North 235 feet above the described land”

:::The 4th DCA in Procacci stated:

::::“At best the use of the words ‘subject to’ in an attempt to create an easement leads to unclear and ambiguous results, [citation omitted]. To understand the intentions of the parties (which should be understandable when reading the instrument), recourse must be had to the surrounding agreements and circumstances. Without such facts and circumstances, no easement is created when the words ‘subject to’ are used.” Id. at 182.

:::The words “subject to” in a deed create an ambiguity that allows a court to hear extrinsic evidence to ascertain the intent of the parties at the time the “subject to” deed was executed. Hastie v. Ekholm, 199 So.3d 461 (Fla. 4 DCA 2016). In in Hastie v. Ekholm, several lots in an unrecorded plat were conveyed by a common grantor with the following language:

::::“SUBJECT TO an easement for road purposes over the East 30.0 feet.”

::The east 30 feet of those lots became a road known as Clark Lane. The 4th DCA in Hastie stated that since the deeds were ambiguous the trial court was “correct in looking at the circumstances surrounding the common grantor’s original conveyance of the lots on Clark Lane” to determine the intent of the grantor. Id at 464. The Hastie Court, held that “[t]he deeds in this case demonstrated that the common grantors intended that [a] private road run up and down the east side of the lots on Clark Lane.” Id. at 464.

::In Behm v. Saeli, 560 So.2d 431 (Fla. 5 DCA 1990), a conveyance of 10 acres contained the following clause:

:::“SUBJECT to a 30 foot wide Ingress and Egress Easement along the East line”.

::That clause was determined by the trial court to not create an easement. However, the 5th DCA reversed the trial court and held that based upon all of the evidence of the circumstances of the agreement between the original parties, the parties to the deed intended to create an easement with the “subject to” language. Id. at 432.

::Generally, the title industry will not rely on easements attempted to be created using “subject to” language unless there is a final judgment affirming that the easement was validly created.

:B. Language to Create Easement

::1. Reserving an Easement

:::When a seller is conveying property to a buyer and is reserving an easement over the property being conveyed for the benefit of other property owned and retained by the seller, the language to reserve that easement over Lot 1 for the benefit of Lot 2, is:

::::“Lot 1 . . . subject to a perpetual non-exclusive easement for access over the East 30 feet of Lot 1 reserved in favor of the grantor, his/her successors and assigns, for the benefit of Lot 2 and which runs with land.”

::2. Conveying an Easement

:::When a seller is conveying a lot to a buyer together with an easement over other property owned by the seller, the language to create the easement when, for example, Lot 1 is being conveyed by the seller together with an easement over Lot 2 owned by the seller, is:

::::“Lot 1 . . . together with a perpetual non-exclusive easement for access over the East 30
feet of Lot 2 for the benefit of Lot 1 and for the benefit of the grantee, his/her successors
and assigns, that runs with the land.”

:C. Appurtenant Easements

::Access based on an easement that was created in the back chain of title when the easement has not been referenced in deeds conveying the dominant parcel after the easement was created can be insured if the easement is an appurtenant easement. “[A]n appurtenant easement is a permanent easement running with the land and passes incident to it.” Morris v. Winbar LLC, 273 So.3d 176 (Fla. 1 DCA 2019). The dominant estate receives the benefit of an easement and the servient estate is burdened by the easement. Id. When an easement is appurtenant, it stays with the dominant estate and travels with a conveyance of the dominant estate whether the easement is specifically referenced in the deed or not. Therefore, an appurtenant easement created in the back chain of title can be relied upon to insure access whether or not the easement is referenced in conveyances of the dominant estate after the easement was created.

==V. EXCEPTIONS FOR EASEMENTS==

:A. Burdened Property

::A title insurance policy will always make exceptions for the terms of easements that burden the insured property because the easement affects the fee owner’s full use of the property.

:B. Benefited Property

::A title insurance policy will also make exceptions for the terms of easements that benefit the insured property because the use of that easement is limited by the terms of the easement such as width, length, duration, quantity of use, or time of use.

:C. Matters on Survey

::Any roads, paths, trails or power lines shown on a survey as traversing the insured property will be listed as exceptions in the title policy because they affect the insured owner’s use of the property. If there are no recorded documents creating the road, path, trail, or power line, the policy will contain the following exception: “Possible prescriptive easement for the [road, path, trail or power line] shown on the survey prepared by John Smith Surveying dated ______________, Job No.: __________.”

==VI. INSURING EASEMENTS CONTAINED IN EXCEPTIONS==

:In commercial transactions, lender’s counsel and buyer’s counsel occasionally request
that certain easements contained in the exceptions listed in the title commitment be insured, such
as reciprocal parking easements or joint entrance easements. These non-exclusive easements can usually be insured as an additional parcel in the policy with the following or similar language:

::“Non-exclusive reciprocal parking Easement Agreement recorded in Official Records Book 1234 Page 567 Public Records of Orange County, Florida.”

:Even though the easement is insured, the policy will contain an exception for the terms of the easement because the use of the easement is limited by its terms.

2020-06-27T01:51:04Z

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
==Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.==
====Uniform Title Standard (“UTS”) 2.1====
:====:A. Who has title to real property?====
=====::1. 11 USC 541(a) Property of the Estate.=====
=====::2. The commencement of case, creates a Bankruptcy Estate:=====
:::a. All legal and equitable interests of debtor in property as of
commencement of case.
:::b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
:::c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
=====::3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.=====
=====::4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.=====
=====::5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.=====
====:B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.====
====:C. Unscheduled property remains property of the estate.====
====:D. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”====

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:49:16Z

Joetschida: /* V. Bankruptcy Estate */

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
==Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.==
====Uniform Title Standard (“UTS”) 2.1====
====:A. Who has title to real property?====
=====::1. 11 USC 541(a) Property of the Estate.=====
=====::2. The commencement of case, creates a Bankruptcy Estate:=====
:::a. All legal and equitable interests of debtor in property as of
commencement of case.
:::b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
:::c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
=====::3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.=====
=====::4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.=====
=====::5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.=====
====:B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.====
====:C. Unscheduled property remains property of the estate.====
====:D. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”====

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:46:57Z

Joetschida: /* V. Bankruptcy Estate */

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
==Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.==
====Uniform Title Standard (“UTS”) 2.1====
====A. Who has title to real property?====
=====1. 11 USC 541(a) Property of the Estate.=====
=====2. The commencement of case, creates a Bankruptcy Estate:=====
a. All legal and equitable interests of debtor in property as of
commencement of case.
b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
=====3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.=====
=====4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.=====
=====5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.=====
====B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.====
====C. Unscheduled property remains property of the estate.====
====D. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”====

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:43:51Z

Joetschida: /* V. Bankruptcy Estate */

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
===Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.===
====Uniform Title Standard (“UTS”) 2.1====
=====A. Who has title to real property?=====
======1. 11 USC 541(a) Property of the Estate.======
======2. The commencement of case, creates a Bankruptcy Estate:======
a. All legal and equitable interests of debtor in property as of
commencement of case.
b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
======3. Any interest in property acquired by debtor within 180 days after filing Bankruptcy.======
======4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired by the debtor after commencement of the case before the case is closed,dismissed, or converted to a Ch. 7, 11 or 12.======
======5. Property remains property of the Bankruptcy Estate until it is allowed as exempt, is sold or abandoned.======
=====B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of Intent to Sell) unless the property is allowed as exempt, is abandoned, or the bankruptcy is dismissed.=====
=====C. Unscheduled property remains property of the estate.=====
=====C. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.”=====

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:41:38Z

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
===Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.===
====Uniform Title Standard (“UTS”) 2.1====
=====A. Who has title to real property?=====
======1. 11 USC 541(a) Property of the Estate.======
======2. The commencement of case, creates a Bankruptcy Estate:======
a. All legal and equitable interests of debtor in property as of
commencement of case.
b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
======3. Any interest in property acquired by debtor within 180 days after filing
Bankruptcy.======
======4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired
by the debtor after commencement of the case before the case is closed,
dismissed, or converted to a Ch. 7, 11 or 12.======
======5. Property remains property of the Bankruptcy Estate until it is allowed as
exempt, is sold or abandoned.======
=====B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of
Intent to Sell) unless the property is allowed as exempt, is abandoned, or the
bankruptcy is dismissed.=====
=====C. Unscheduled property remains property of the estate.=====
=====C. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that
is not abandoned under this section and that is not administered in the case
remains property of the estate.”=====

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:38:34Z

Joetschida: /* Uniform Title Standard (“UTS”) 2.1 */

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
===Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.===
====Uniform Title Standard (“UTS”) 2.1====
=====A. Who has title to real property?=====
A. Who has title to real property?
1. 11 USC 541(a) Property of the Estate.
2. The commencement of case, creates a Bankruptcy Estate:
a. All legal and equitable interests of debtor in property as of
commencement of case.
b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
3. Any interest in property acquired by debtor within 180 days after filing
Bankruptcy.
4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired
by the debtor after commencement of the case before the case is closed,
dismissed, or converted to a Ch. 7, 11 or 12.
5. Property remains property of the Bankruptcy Estate until it is allowed as
exempt, is sold or abandoned.
B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of
Intent to Sell) unless the property is allowed as exempt, is abandoned, or the
bankruptcy is dismissed.
C. Unscheduled property remains property of the estate.
1. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that
is not abandoned under this section and that is not administered in the case
remains property of the estate.”

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

FL Bankruptcy in Florida

2020-06-27T01:35:48Z

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
===Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.===
====Uniform Title Standard (“UTS”) 2.1====
=====A. Who has title to real property?=====
#11 USC 541(a) Property of the Estate.
#The commencement of case, creates a Bankruptcy Estate:
##All legal and equitable interests of debtor in property as of
commencement of case.
##Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
##Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
#Any interest in property acquired by debtor within 180 days after filing
Bankruptcy.
#11 USC 1306(a)(1).
##Ch. 13 estate includes all property acquired
by the debtor after commencement of the case before the case is closed,
dismissed, or converted to a Ch. 7, 11 or 12.
#Property remains property of the Bankruptcy Estate until it is allowed as
exempt, is sold or abandoned.
##Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of
Intent to Sell) unless the property is allowed as exempt, is abandoned, or the
bankruptcy is dismissed.
##Unscheduled property remains property of the estate.
#11 USC 554(d): “Unless the court orders otherwise, property of the estate that
is not abandoned under this section and that is not administered in the case
remains property of the estate.”

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed

2020-06-27T01:19:26Z

Joetschida: /* V. Bankruptcy Estate */

=I. Introduction=
The purpose of this webinar is to explain how title to real property is
treated in bankruptcy and to educate title agents as to what is needed to insure
title to real property when the title-holder has filed bankruptcy.

=II. Law=
===A. Bankruptcy Code===
===B. Bankruptcy Rules===
===C. Local Rules===

=III. Bankruptcy Chapters=
==A. Chapter 7 – Liquidation==
===1. Trustee appointed to liquidate assets and pay claims===
===2. All assets, except property allowed as exempt, title vests in bankruptcy estate===

==B. Chapter 11– Reorganization==
===1. Reorganized business - more for creditors than a liquidation===
===2. Debtor in Possession - operates business===
===3. Plan of reorganization – approved by creditors and the court===
===4. Confirmed Plan vests title to all property of the estate in debtor (subject to terms of Plan)===

==C. Chapter 12 - Farms==
==D. Chapter 13 – Person with Income==
===1. Reorganization by an individual with an income===
===2. Plan approved by court===
===3. Confirm Plan vests title in debtor subject to Plan===

=IV. Bankruptcy Schedules=
===11 USC 521(a). Debtor shall file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.===
===A. Schedule A – lists all real property===
===B. Schedule C - lists exempt real property===
===C. Schedule F - lists debts===

=V. Bankruptcy Estate=
===Under 11 USC 541, upon filing a Petition for Bankruptcy, all of the debtor’s property becomes property of the bankruptcy estate until exempted, abandoned, sold or the bankruptcy case is closed.===
====Uniform Title Standard (“UTS”) 2.1====
=====A. Who has title to real property?=====
1. 11 USC 541(a) Property of the Estate.
2. The commencement of case, creates a Bankruptcy Estate:
a. All legal and equitable interests of debtor in property as of
commencement of case.
b. Including debtor’s interesting in entireties property, or tenants in
common, or joint tenants are part of the bankruptcy estate until
allowed as exempt. See 11 USC 363(h) and UTS 2.1
c. Property held by the debtor as trustee becomes part of the estate but
only to the extent of the debtor’s interest as trustee and subject to the
beneficiary’s interest. UTS 2.1
3. Any interest in property acquired by debtor within 180 days after filing
Bankruptcy.
4. 11 USC 1306(a)(1). A Ch. 13 estate includes all property acquired
by the debtor after commencement of the case before the case is closed,
dismissed, or converted to a Ch. 7, 11 or 12.
5. Property remains property of the Bankruptcy Estate until it is allowed as
exempt, is sold or abandoned.
B. Debtor cannot sell or refinance without bankruptcy authority (Order or Notice of
Intent to Sell) unless the property is allowed as exempt, is abandoned, or the
bankruptcy is dismissed.
C. Unscheduled property remains property of the estate.
1. 11 USC 554(d): “Unless the court orders otherwise, property of the estate that
is not abandoned under this section and that is not administered in the case
remains property of the estate.”

=VI. How Does Property Come Out of the Bankruptcy Estate?=
A. Exempt Property
Under 11 USAC 541, all of the debtor’s property becomes property of the bankruptcy estate until exempted under 11 USC 522(b) and FS 222.20.
1. 11 USC 522(b). A debtor may declare certain property exempt from the
bankruptcy estate.
a. Debtor’s claim of exemptions is presumed valid
b. Any party objecting to claimed exemptions has the burden of proof.
See In Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
2. FS 222.20. Florida opted out of the Federal Bankruptcy exemptions under 11
USC 522. Residents of Florida cannot use the Federal Exemptions but can use
the Florida Exemptions under the Florida Constitution and Florida Statutes. In
Re Nishi SWARUP, 521 B.R. 382 (Bankr. M.D. Fla. 2014).
a. Art. X, Section 4: Homestead of half-acre in municipality and 160 acres
outside a municipality
3. How to Claim Property as Exempt
a. Rule 4003 (11 USC 4003):
(1) List the homestead on Schedule C
(2) Creditors have 30 days after Meeting of Creditors (341
Meeting) to object to any claimed exemptions.
(3) The objecting party has the burden of proving that the
exemptions are not properly claimed, Rule 4003(c).
(4) If objection filed, need court order denying the objection.
4. Limitation of Amount of homestead exemption when State Exemptions are
Elected:
a. Under 11 USC 522(p), a debtor may not exempt the amount of any
interest acquired by the debtor during the 1215-day period (3 years
and 4 months) prior to filing bankruptcy in excess of $125,000.
b. Does not include any interest transferred from debtor’s previous
homestead acquired prior to the 1215-day period.
c. Two debtors can stack and claim $250,000, In Re: Rasmussen, 349 B.R.
747 (Bankr M.D. Florida 2006)
5. What happens to the title if homestead not claimed as exempt on Schedule C?
a. Homestead not allowed as exempt and remains property of the
bankruptcy estate. See Re: O’Malley, 601 B.R. 629 (Bankr ND Illinois
2019)
B. Abandonment
1. Actual Abandonment:
a. Applicable Law
(1) 11 USC 554(a). “After notice and hearing, Trustee may abandon any
property of the estate that is burdensome or of inconsequential value
to the estate.”
(2) 11 USC 554(b). “Upon request of a party in interest and after notice
and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome or inconsequential value to
the estate.”
b. 11 USC 6007(a):
Trustee or DIP shall give Notice of Intent to Abandon Property to:
(1) Trustee, debtor, and all creditors
(2) A party in interest may file an objection within 14 days mailing
the Notice unless court sets a different time.
(3) If a timely objection is filed, the court will set a hearing
c. Documents to prove abandonment. Record certified copies of:
(1) Notice of Intent to Abandon Property
(2) Portion of bankruptcy docket showing no objection or request
for hearing was filed.
(3) If objection is filed or a hearing is requested, a Court Order
overruling the objection and authorizing abandonment.
(4) Portion of bankruptcy docket showing no appeal of order was
filed.
2. Constructive Abandonment
a. Applicable Law
=11 USC 554(c). “Unless the court orders otherwise, any property
scheduled under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.”
(1) Property Listed on Schedule A
(2) Bankruptcy Case Closed
(3) No deed out of Trustee
= If the property is not listed on Schedule A:
(1) It remains property of the estate after bankruptcy closed
(2) Is not constructively abandoned after bankruptcy closed
(3) 11 USC 554(d). “Unless the court orders otherwise, property
of the estate that is not abandoned under this section and
that is not administered in the case remains property of the
estate.”
b. Documents to prove Constructive Abandonment. Record certified
copies of:
(1) Schedule A showing Property
(2) Portion of bankruptcy docket showing bankruptcy case is
closed.
(3) Trustee’s final report showing that the property was not
administered by the trustee.
3. Effect of Abandonment – property is no longer part of the bankruptcy estate
so title re-vests in debtor.
4. See UTS 2.4
C. Plan Confirmed (Ch 11 and 13)
1. 11 USC 1327(b). Ch 13 Vests title back in debtor
2. 11 USC 1141(b). Ch 11 Vests title back in debtor

=VII. Automatic Stay=
A. Effect of Automatic Stay
1. 11 USC 362(a)
2. When bankruptcy is filed, it operates as a stay of:
a. the commencement or continuation of any action against the
debtor;
b. the enforcement of a judgment against the debtor or against property
of the estate;
c. any act to create, perfect, or enforce an lien against property of the
Estate;
3. 11 USC 362(c) – stay is in effect until:
a. as to specific property until the property is no longer part of the estate
i.e. it is abandoned, exempt or sold
b. earliest of: time case is closed, case is dismissed, or
debtor is granted at discharge
B. Violating the Stay
1. An action taken in violation of the stay is void. Franklin Sav. Ass’n v. Office of
Thrift Supervision, 31 F.3d 1020 (10th Cir. 1994)
C. Foreclosures
1. Effect of Stay
a. Foreclosure has to stop – See UTS 2.3
b. Any action taken in violation of the stay is void
c. Review Docket
D. Motion For Relief From the Automatic Stay
1. 11 USC 362(d). Upon request of a party in interest and after notice and a
hearing, the court may terminate, annul, modify, or condition the stay
2. 11 USC 4001(a)(1). Motion for relief shall be made per Rule 9014 i.e. a hearing
is required
3. 11 USC 4001(a)(3). Order granting motion for relief from automatic stay is
stayed until 14 days after the entry of the court orders otherwise.
4. Documents to record. Certified copies of the following:
5. Order granting motion for relief
6. Portion of docket showing Order not appealed
E. Chapter 13 Order Confirming Plan
1. In rem proceedings authorized if mortgage is not provided for in Plan
F. Foreclosure Issue:
1. FS 702.12 Defenses due to bankruptcy filings
a. Surrender in Bankruptcy is a waiver of defenses to Foreclosure
b. Judicial Notice

=VIII. Postpetition Transactions=
A. 11 USC 549(a) - Except as provided in subparagraph (c) the trustee may avoid a
transfer of property of the estate that occurs after the commencement of the case;
B. 11 USC 549(c) – Trustee may not avoid a transfer of an interest in real property if:
1. Transferee was a good faith purchaser without knowledge of the bankruptcy;
2. Transferee paid the present fair equivalent value;
3. Transferee’s interest was recorded in the Official Records before the
bankruptcy petition was filed.
C. Rule 6001 - Any entity asserting the validity of a transfer has the burden of proof.
D. See: In Re Zargaran, 216 F.Supp.3d 1340 (SD Florida 2016), UTS 2.1

=IX. Sale or Mortgage of Exempt (Homestead) Property by Debtor=
A. Documents needed to insure a sale or mortgage of homestead (Exempt) property.
Record certified copies of the following:
1. Schedule C showing homestead listed as Exempt
2. Bankruptcy Docket showing no objection filed during 30-day
period after meeting of creditors.
3. Order denying the objection, if objection was filed
4. Portion of bankruptcy docket showing no appeal of the Order Authorizing
Sale (or mortgage).

=X. Sale of Non-Exempt (Non-Homestead) Property=
A. 11 USC 363(c)(1) authorizes the trustee or a debtor in possession to sell property of
the estate in the ordinary course of the business of the debtor without notice and
without a hearing. However, the sale of real property is rarely in the ordinary course of
a debtor’s business unless the debtor is a builder.
B. 11 USC 363(b)(1) allows a trustee or a debtor in possession to sell property of the estate other than in the ordinary course of business “after notice and a hearing”.
C. “After Notice and a Hearing” – What does that mean?
1. 11 USC 102(1):
a. “After notice and a hearing” means after such notice as is
appropriate in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances.
b. Rule 102(1)(B)(i) authorizes a sale without an actual hearing if notice is properly given and if a hearing is not requested by a party in
interest. Filing an objection to the proposed sale is the equivalent of
requesting a hearing.
2. 11 USC 6004(a):
a. A notice of a proposed sale of property not in the ordinary course of
business shall be given pursuant to Rule 2002(a)(2).
b. 11 USC 6004(b): An objection to a proposed sale of property shall be
filed and served not less than seven days before the date set for the
proposed sale.
c. 11 USC 6004(e): If an objection is filed a hearing is scheduled - Rule
9014 regarding contested matters governs the hearing.
d. 11 USC 6004(h): An Order authorizing the sale is stayed for 14 days
after entry of the Order unless the court orders otherwise.
3. 11 USC 2002(a)(2) – The clerk, or some other person as the court may direct,
shall give the debtor, the trustee, and all creditors at least 21 days’ notice by
mail of a proposed sale of property of the estate other than in the ordinary
course of business unless the court shortens the time or directs another
method of giving notice.
4. 11 USC 2002(c)(1) – Content of Notice
a. The Notice of Proposed Sale shall include:
(1) Date and Time of Sale
(2) Terms and conditions of any private sale
(3) Time fixed for filing objections to the sale
(4) A general description of real property is sufficient
5. 11 USC 363(m). Reversal or modification on appeal of a sale under 363(b) and
(c) does not affect the validity of the sale to an entity that purchased the
property in good faith.
6. See UTS 2.2
D. According to the forgoing provisions, a debtor in possession or a trustee may sell
property of the estate by giving at least 21 days’ notice of the sale to the trustee, the
debtor, and all creditors of the sale. If no objection to the sale is filed or a hearing
is not requested at least 7 days before the sale date, the trustee or debtor in
possession may sell the property without obtaining a court order. If an objection to
the sale is filed or a hearing is requested, a court order authorizing the sale must be
obtained.
E. Documents needed to insure a sale of non-homestead (Non-Exempt) property by a
Trustee or Debtor in Possession. Record certified copies of:
1. Notice of Intent to Sell
2. Portion of Bankruptcy Docket showing no Objection to Sale or Request for
hearing was filed
3. Order Authorizing Sale if objection or request for hearing was filed
4. Portion of Bankruptcy Docket showing no appeal of the Order Authorizing the
Sale.

=XI. Chapter 11, 13 – Sale Pursuant to Plan=
A. Plan
1. 11 USC 1322(b)(9). Plan may provide for vesting of property of the estate in the
debtor or any other entity, on confirmation of the Plan.
B. Order Confirming Plan
1. 11 USC 1327(b) and 11 USC 1141(b). Except as otherwise provided in the Plan,
the Order Confirming the Plan vests all property of the estate in debtor.
2. 11 USC 1327(c) and 11 USC 1141(c). Except as otherwise provided in the Plan,
the property vesting the debtor is free and clear of any claim or interest of any creditor provided for by the plan.
C. As long as the Plan provides that title vests in the debtor. The following documents
are needed to insure a Sale of property pursuant to a Ch. 11 or 13 Plan. Record
certified copies of the following:
1. Plan
2. Order Confirming the Plan
3. Portion of bankruptcy docket evidencing that the Order Confirming the Plan was not appealed

=XII. Judgments=
A. Judgment Listed in Bankruptcy on Schedule F
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“A discharge in bankruptcy releases the bankrupt from personal liability for a
judgment, but it does not affect a lien which arose from the judgment prior to
bankruptcy and which attached to the property …”
2. Discharge relieves debt but not the lien.
3. If not homestead, need release of the judgment.
B. After Acquired Property
1. Albritton v. General Portland Cement Co., 344 So.2d 574 (Fla. 1977):
“judgment debt voided in bankruptcy cannot constitute a lien on after-acquired
property.”
2. Judgment Does Not Attach to after-acquired property if:
a. Judgment shown on Schedule F
b. Discharge obtained
(1) 11 USC 524(a)(1). Discharge voids any judgment at any time obtained to
the extent the judgment is a determination of personal liability of the debtor
(2) 11 USC 524(a)(2). Discharge operates as an injunction against the
commencement or continuation of any action to collect on the debtor
discharged as a personal liability of the debtor.
(3) See Uniform Title Standard 2.5
3. What if property loses homestead status after bankruptcy filed?
a. 11 USC 524(a)(3). Discharge operates as an injunction against the
commencement or continuation of any action to collect against property of
the debtor of the debtor acquired after commencement of the bankruptcy
discharged as a personal liability of the debtor.
4. Documents to record as proof judgment discharged and is not a lien on after-
acquired property:
a. Certified copy of Schedule F showing debt listed
b. Certified copy of Discharge of debtor
C. Homestead
1. Article X, Section 4(a) of the Florida Constitution provides:
“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;” [emphasis added].
2. 522(f) Order
a. 11 USC 522(f)(1)(A): “Notwithstanding any waiver of exemptions … a debtor
may avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs and exemption to which the debtor would have
been entitled … if such lien is (A) a judicial lien …”
b. “Comfort Order”?
3. Homestead Affidavit – Use it in lieu of a 522(f) Order

=XIII. Motion to Strip Junior Mortgages=
A. What is it?
1. WFG Bulletin FL2016-07 Stripping Liens (Junior Mortgages) in Bankruptcy
2. Chapter 7
3. Chapter 13
4. Chapter 20
B. Law
1. 11 USC 506(a)(1) – Classify claim (for junior mortgage) as:
a. Allowed Secured Claim; or
b. Allowed Unsecured Claim
2. 11 USC 1322(b)(2) – Authorizes Chapter 13 Plan to modify rights of holders of
allowed secured claims and allowed unsecured claims. Allows a Ch. 13 Debtor
to modify the rights of the holder of a junior mortgage if there is no equity in the
property over and above the first mortgage to strip the junior mortgage from the
property.
3. Cases
a. BOA v. Caulkett, 135 S.Ct 1995 (SC 2015)
b. Dewsnup v. Timm, 112 S. Ct 773 (SC 1992)
c. Nobelman v. American Savings Bank, 113 S.Ct 2106 (SC 1993)
d. Frazier v. Real Time Resolutions, Inc., 469 B.R. 889 (E.D. California 2012)
C. Record certified copies of the following documents:
a. Motion to Strip
b. Order Granting Motion to Strip
c. Debtor’s Discharge
d. Wait 45 days

=XIV. Sale Free and Clear Of Liens=
A. 11 USC 363(f). Authorizes a Trustee (Ch.7) or debtor in possession (Ch. 11 and 13) to
sell property free and clear of liens based on the factors listed in 363(f).
B. 11 USC 6004(c). A motion to sell property free and clear of liens shall be
served on parties who have liens or other interests in the property to be sold. Notice
required by Rule 2002(a)(2) must be provided to the debtor, trustee and all creditors
and must include the date of the hearing on the motion and the time within which
objections may be filed.
C. 11 USC 6004(h). Order authorizing sale is stayed 14 days from date of entry unless
the Order states otherwise.
D. Documents to record to insure a sale of property free and clear of liens by trustee or
debtor in possession:
1. Certified copy of Motion to Sell Property Free and Clear
a. Motion must identify liens by O.R. Books and Pages
2. Proof such as the mailing matrix that all interested parties and creditors
whose lien is to be divested were provided notice of the motion and hearing.
3. Certified copy of Order Granting Motion to Sell Property Free and Clear
a. Order must identify liens by O.R. Books and Pages.
4. Portion of docket showing that the Order was not objected to or appealed

=XV. Miscellaneous=
A. 11 USC 363(h). A trustee may sell the debtor’s interest in property even if only an
undivided interest as tenant in common, joint tenancy, or tenancy by the entirety. A
Ch. 13 debtor in possession does not have this authority under 11 USC 1303.
B. 11 USC 1306(a)(1). Property of the Ch. 13 estate includes all property acquired by the
debtor after commencement of the case before the case is closed, dismissed, or
converted to a Ch. 7, 11 or 12.
C. 11 USC 1303. Chapter 13 debtor in possession has the rights and powers of a trustee
under 363(b),(c), and (f) to sell property of the estate. See also 11 USC 1304.
D. 11 USC 1007(a). Chapter 11 debtor in possession has the rights and powers of a
Trustee.
E. 11 USC 364(a)(b). Need court approval to obtain unsecured debt.
F. 11 USC 802(a)(1). The appeal period is 14 days from the date of entry of an Order.
G. 11 USC 1301. Stay against codebtor and relief.
H. 11 USC 523. List of Non-Dischargeable Debts
I. Florida Statute 55.145. Authority to cancel and discharge a judgment in State Court if
the judgment was discharged in bankruptcy.
J. Discharged does not mean the case is closed