Type: Amicus
Date: January 27, 2017
Description: Whether in the absence of objection, a chapter 13 plan must specify a duration.
Result: Judgment affirmed, September 6, 2017. Debtor lost.
Plan May Provide for Balloon Payment
A plan providing for periodic payments on a mortgage ending with a balloon payment during the plan does not violate the Code’s requirement that plan payments be in “equal monthly amounts.” In re Cochran, No. 15-52314 (Bankr. M.D. Ga. Sept. 1, 2016).
William Jackson Cochran had a loan from the Bank of Perry, which was secured by his residence and surrounding land. The terms of the lending agreement were that Mr. Cochran would make regular monthly payments for three years, then pay off the remainder of the loan in a balloon payment. When the balloon payment came due, Mr. Cochran was unable to make it but continued to make the regular monthly payments. The Bank assigned the loan to RREF, and RREF instituted a foreclosure action. Mr. Cochran filed a Chapter 13 bankruptcy petition to save his home. His proposed plan contemplated continuing the payments he had been making as Adequate Protection Payments. The plan proposed to pay the remainder of the debt in a single payment within twelve months of confirmation. [Read more…] about Plan May Provide for Balloon Payment
Demand for Full Payment Does Not Accelerate Mortgage Maturity Date
Demanding full payment of a mortgage after the debtor’s default did not accelerate the maturity date, such that the limitations period for filing a foreclosure action was moved up. Washington v. Bank of New York Mellon, No. 15-3210 (3rd Cir. Sept. 30, 2016) (unpublished).
Though the mortgage agreement specified a maturity date of 2037, the debtor, Gordon Washington, argued that when Bank of New York demanded full payment and filed its first foreclosure action in 2007, it activated the mortgage agreement’s acceleration clause and established a new maturity date for the mortgage. The foreclosure action failed for lack of prosecution, and the creditor filed a new action after Mr. Washington had filed his bankruptcy petition in 2014. Mr. Washington then sought an order to the effect that the creditor no longer had an interest in the property because the limitations period had elapsed. [Read more…] about Demand for Full Payment Does Not Accelerate Mortgage Maturity Date
DOR Collection Violates Confirmation Order
The Florida Department of Revenue violated the bankruptcy court’s confirmation order when it intercepted the debtor’s travel reimbursement funds for payment toward a domestic relations order. Florida Dept. of Rev.v. Gonzalez, No. 15-14804 (11th Cir. Aug. 11, 2016).
Irain Gonzalez’s confirmed chapter 13 plan provided for payment of his domestic support arrearages and for direct ongoing payments on that support obligation. Nonetheless, the Florida DOR intercepted his work-related travel reimbursement money and applied it to the support obligation. Mr. Gonzalez filed a motion for contempt due to the DOR’s contravention of the terms of the confirmed plan. During the contempt hearing, the DOR agreed to release the funds and cease collection efforts. The bankruptcy court granted the motion for contempt and awarded attorney’s fees. In re Gonzalez, No. 11-23183-BKC-LMI, 2012 WL 2974813 (Bankr. S.D. Fla. July 20, 2012). The district court affirmed. In re Irain Gonzalez, No. 1:15-CV-20023-KAM, 2015 WL 5692561 (S.D. Fla. Sept. 29, 2015). [Read more…] about DOR Collection Violates Confirmation Order
Rule 60(b) Subject to Limitations in Bankruptcy
In the absence of fraud, court mistake of fact or clerical error, or due process violation, a bankruptcy court cannot revoke a confirmation order under Rule 60(b). Federal National Mortgage Ass’n v. Meeko, No. 15-1200 (D. Or. March 17, 2016). [Read more…] about Rule 60(b) Subject to Limitations in Bankruptcy
Fee-Only Plan Has Purpose beyond Payment of Fee
Although the debtor’s Chapter 13 plan effectively paid nothing to the debtor’s single creditor, it was filed in good faith. In re Banks, No. 15-9819 (Bankr. N.D. Ill. Feb. 8, 2016).
Mr. Banks had no assets and only one debt: $5,080 in city parking tickets. His Chapter 13 plan contemplated paying his entire $120 disposable income for 36 months for a total of $4,320, $4,000 of which would go to his bankruptcy attorney, and $285.12 to the bankruptcy trustee. The trustee challenged the plan as not having been filed in good faith under section 1325(a)(7). [Read more…] about Fee-Only Plan Has Purpose beyond Payment of Fee
Debtors Denied Discharge for Failure to Make Mortgage Payments Outside Plan
Debtors whose Chapter 13 plan included a provision for curing mortgage arrears through the plan with regular mortgage payments paid outside the plan are not entitled to discharge when they fail to keep up with the mortgage payments. Kessler v. Wilson (In re Kessler), No. 15-40 (N.D. Tex. Nov. 19, 2015). [Read more…] about Debtors Denied Discharge for Failure to Make Mortgage Payments Outside Plan
Implied Consent Supports Plan Confirmation
A plan providing for delayed payments to secured creditors was confirmed over the trustee’s objection based on the creditors’ implied acceptance of the repayment terms. Bronitsky v. Bea (In re Bea), No. 14-1376, 2015 Bankr. LEXIS 1793 (B.A.P. 9th Cir. May 29, 2015). [Read more…] about Implied Consent Supports Plan Confirmation
Chapter 13 Dismissed When Infeasibility Discovered at End of Plan
After making plan payments for fifty-eight months, the debtors’ chapter 13 was dismissed due to infeasibility that was built into the confirmed plan. Schlegel v. Billingslea (In re Schlegel), No. 14-1132 (B.A.P. 9th Cir. Feb. 25, 2015). [Read more…] about Chapter 13 Dismissed When Infeasibility Discovered at End of Plan
Bullard v. Blue Hills Bank, No. 14-116 (USSCt)
Type: Amicus
Date: February 1, 2015
Description: Whether denial of confirmation is final, appealable, order.
Result: Judgment affirmed, May 4, 2015