Posted by NCBRC - September 8th, 2022
Where the Trustee slept on her right to challenge the debtor’s method of calculating her plan payments until shortly before the debtor completed her plan, the doctrine of laches compelled denial of the trustee’s motion to dismiss. In re Melcher, No. 16-21536 (Bankr. E.D. Ky. Aug. 30, 2022).
The debtor and the chapter 13 Trustee negotiated a 60-month plan in which the debtor agreed to commit one third of her annual gross income over $120,000 to the plan (“excess income payments”). The debtor calculated her first excess income payment by taking the income from Box 1 of her W-2 form, subtracting $120,000 and multiplying the result by .33. After discussion with the Trustee and one of her creditors, the debtor’s payment was accepted as correct. The debtor used the same method of calculation for the following years’ excess income payments. Read More
Posted by NCBRC - September 6th, 2022
The court held its nose and slogged through the trustee’s lengthy complaint riddled with errors and legal misconceptions to find that the debtor’s retirement accounts totaling approximately $1.7 million were not property of the bankruptcy estate. McDonnell v. Gilbert (In re Gilbert), No. 21-12725, Adv. Proc. No. 22-1005 (Bankr. D. N.J. Aug. 23, 2022). Read More
Posted by NCBRC - September 2nd, 2022
Despite agreeing that the Tenth Circuit got it wrong, the Solicitor General for the United States filed a brief opposing certiorari in the case of Kinney v. HSBC Bank USA, No. 21-599 (brief filed Aug. 30, 2022). The issue was a simple one: whether the debtor could receive a completion discharge under section 1328(a) when she missed the final three payments on her mortgage due to a car accident, but made up the payments shortly after her plan expired. Read More
Posted by NCBRC - August 31st, 2022
The Oregon Division of Child Services did not violate the automatic stay or the terms of the confirmation order when it engaged in collection activities where the efforts related to a time not covered by the debtor’s settlement agreement with his ex-wife forgiving all child support payments predating the adoption of their child. In re Bronson, No. 20-30704 (Bankr. D. Ore. Aug. 23, 2022). Read More
Posted by NCBRC - August 26th, 2022
A debt based on breach of a Stipulated Agreement that was incorporated but not merged into the final Judgment of Divorce was a debt “in connection with” a divorce decree within the meaning of section 523(a)(15) and was therefore nondischargeable in bankruptcy. Monassebian v. Monassebian, No. 21-41251, Adv. Proc. No. 21-1162 (Bankr. E.D.N.Y. Aug. 1, 2022). Read More
Posted by NCBRC - August 23rd, 2022
A debtor who has shuffled off this mortal coil cannot confirm a chapter 13 plan where he has no ability to fund it with future income and no need for the fresh start offered by bankruptcy discharge. In re Carrasco, No. 21-51420 (Bankr. W.D. Tex. July 19, 2022).
In this case, the debtor died after the meeting of the creditors, but before his proposed chapter 13 plan had been confirmed. The debtor’s counsel lobbied to substitute the debtor’s son to confirm the plan notwithstanding the fact that the debtor himself had ridden the carriage into immortality. The trustee objected to confirmation. Read More
Posted by NCBRC - August 19th, 2022
The City of Milwaukee failed to present evidence that the “special charges” on the debtor’s delinquent property tax bill were in the nature of property taxes entitled to priority in the debtor’s chapter 13 plan. In re Peete, No. 21-23863 (Bankr. E.D. Wisc. June 30, 2022).
When the debtor filed for bankruptcy, the City of Milwaukee filed a claim for delinquent property taxes of which it claimed $26,754.99 as an unsecured priority debt. Ninety percent of the claim, however, represented special charges consisting of delinquent municipal services, delinquent storm water account, delinquent water account, and “total other special.” Only $903.36 of the claim represented “tax principal.” Additionally, $2,242.87 of the total amount represented interest and penalties.
The debtor objected to the claim’s priority status arguing that the special charges were not property tax debt entitled to priority under section 507(a)(8)(B). He filed a chapter 13 plan consistent with that view, and the City objected to confirmation. Read More
Posted by NCBRC - August 17th, 2022
The debtor could not exempt property of the estate which he owned as a tenant in the entirety with his non-filing spouse with respect to a debt he owed to the IRS where section 522(b)(3)(B) exempts such property only to the extent it would be exempt under nonbankruptcy law and the Tax Code permits the IRS to collect against the property. Morgan v. Bruton (In re Morgan), No. 21-891 (N.D. N.C. Aug. 12, 2022). Read More
Posted by NCBRC - August 9th, 2022
The bankruptcy court was not bound by the state court’s finding that the debtor’s ex-wife did not violate the stay when she had the debtor arrested for failure to pay domestic support out of an offshore trust he claimed no ownership interest in, but the court found the issues more appropriate for summary judgment and granted the debtor’s motion to vacate its earlier order of dismissal. Foufas v. Foufas, No. 20-22967, Adv. Proc. No. 22-1013 (Bankr. S.D. Fla. June 17, 2022). Read More
Posted by NCBRC - August 5th, 2022
“Indebtedness arising from a disbarred attorneys’ obligation to reimburse the State Bar for payments made by the CSF to victims of that attorney’s misconduct are not excluded from discharge under § 523(a)(7).” Kassas v. State Bar of Calif., No. 21-55900 (9th Cir. Aug. 1, 2022).
After the chapter 7 debtor was disbarred from the practice of law, the State Supreme Court ordered him to pay restitution in the amount of $201,706 to be distributed to 56 of his clients, and $61,122.27 to the State Bar to reimburse its costs of investigation and discipline. The court also ordered the debtor to reimburse California’s Client Security Fund (CSF) for its payments to clients injured by his misconduct. Read More