The Supreme Court recently denied cert petitions in three bankruptcy-related cases: Hull v. Rockwell, No. 20-499 (pet’n denied Feb. 22, 2021); GE Capital Retail Bank v. Belton, 20-481 (pet’n denied March 8, 2021); and Marino v. Ocwen Loan Servicing, No. 20-409 (pet’n denied March 22, 2021). [Read more…] about Scotus: Three Denials and a Pending
Local Rule for Dismissal without Hearing Is Inconsistent with Code
The Code requires notice and a hearing before a bankruptcy court dismisses a debtor’s Chapter 13 case, and a contrary Local Rule is invalid. No v. Gorman (In re No), No. 17-1679 (4th Cir. May 24, 2018).
Sarah Hyunsoon No filed for Chapter 13 bankruptcy and filed a proposed plan, but failed to attend the meeting of creditors or make the first payment under the plan as required under Section 1326 and Local Rule 3070-1(C). The trustee, Thomas Gorman, certified to the court that by failing to commence payments under the plan, Ms. No had failed to comply with the Local Rule and that her case was therefore subject to dismissal. Although the bankruptcy court scheduled a hearing on the motion, it dismissed Ms. No’s case before the hearing. The district court affirmed. [Read more…] about Local Rule for Dismissal without Hearing Is Inconsistent with Code
Excusable Neglect Standard for Amendment in Reopened Case
The right to amend in the case of a bankruptcy that is closed and then reopened is neither unlimited nor foreclosed, but requires a showing of excusable neglect. In re Mendoza, No. 16-10951 (Bankr. D. N.M. Jan. 31, 2018).
Despite direct prompting, Chapter 7 co-debtor, Sandy Armijo, failed to disclose the existence of a personal injury claim for which she was receiving pre-and post-petition chiropractic treatment. After her case was closed, she received a settlement of approximately $8,000 in the personal injury case and moved to reopen her bankruptcy to amend her schedules to show the income and claim it as exempt. The trustee objected to the exemption. [Read more…] about Excusable Neglect Standard for Amendment in Reopened Case
Direct Mortgage Payments Not “Payments under the Plan” for Discharge Purposes
Payments made directly by the debtor to the mortgagee are not “payments under the plan,” within the meaning of section 1328, and the debtor’s failure to make those payments is not cause for dismissal without discharge. In re Gibson, No. 12-81186 (Bankr. C.D. Ill. March 5, 2018).
Bryan and Holly Gibson made all payments in accordance with their five-year Chapter 13 plan, and the trustee filed the notice of payment completion. Mortgage creditor, PNC, agreed that the Gibsons were current on their first mortgage and had paid the arrearage on the second mortgage through the trustee. However, it chose that moment to complain that, as of the beginning of the plan, the debtors had made none of the post-petition direct payments on their second mortgage. Based on that default, the trustee moved to dismiss under section 1307(c)(6). [Read more…] about Direct Mortgage Payments Not “Payments under the Plan” for Discharge Purposes
Mere Delay without Prejudice Does Not Preclude Reopening
In the absence of evidence of prejudice, mere delay in moving to reopen is insufficient reason to deny the motion. In re Yonish, 15-8006 (B.A.P. 6th Cir. March 3, 2016). [Read more…] about Mere Delay without Prejudice Does Not Preclude Reopening
Charbono v. Sumski, No. 14-2151 (1st Cir.)
Type: Amicus
Date: February 25, 2015
Description: Whether bankruptcy court had authority to impose a monetary sanction on the chapter 13 debtor for failure to provide copy of his request for extension of time for filing federal tax return.
Result: Affirmed, June 15, 2015
Disclose, Disclose, Disclose
If you are filing for bankruptcy, do not forget to mention in your schedules the business interest you recently sold or the property you own in Mexico. That was the lesson learned by a couple of debtors who were denied discharge for just such omissions. Gronlund v. Anderson (In re Gronlund), No. 13-1566 (B.A.P. 9th Cir. Aug. 19, 2014) on appeal No. 14- 60053 (9th Cir.); In re Michelotti, No. 12-21679, Adv. Proc. No. 13-40 (Bankr. W.D. Tenn. July 17, 2014) on appeal, No. 14-8048 (B.A.P. 6th Cir.). [Read more…] about Disclose, Disclose, Disclose
Failure to Report SS Award Results in Dismissal
A debtor must report a new award of social security benefits during the course of her chapter 13 plan without regard to whether that income can be used to fund the plan. In re Wheeler, No. 09-13597 (Bankr. N.D. Ind. Dec. 18, 2013). [Read more…] about Failure to Report SS Award Results in Dismissal
Dismissal under Section 109(g)(2)
Rivera v. Matos (In re Rivera), No. 12-87 (B.A.P. 1st Cir. June 26, 2013), involved application of section 109(g)(2) which provides that no individual may be a debtor under this title “who has been a debtor in a case pending under this title at any time in the preceding 180 days if—(2) the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay provided by section 362 of this title.” The facts were not good for the debtor. He filed his first Chapter 13 bankruptcy on the eve of foreclosure but when he failed to respond to the mortgagee’s motion for relief from stay, the court lifted the stay thereby permitting the creditor to pursue his state foreclosure rights. One week before the scheduled foreclosure, Debtor moved to dismiss his bankruptcy for the express purpose of re-filing in order to prevent the foreclosure. The day before the scheduled foreclosure, the court granted the motion to dismiss. The debtor filed a new chapter 13 bankruptcy petition hours later. The creditor moved to dismiss the petition on the basis of section 109(g)(2)’s proscription against serial filings and on the basis of alleged bad faith. The court granted the motion solely pursuant to section 109(g)(2).
BAP Explores Requirements for “Automatic Dismissal”
Section 521(i)(1) (a BAPCPA addition to the Code) provides that if a debtor in a chapter 13 case fails to file the documents required by section 521(a)(1) “the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition.” But does a court lack discretion to decide not to dismiss, and can the case be dismissed without notice and a hearing? These are a couple of the questions addressed by the BAP for the First Circuit in Soto v. Doral Bank, No. 12-75 (May 8, 2013). [Read more…] about BAP Explores Requirements for “Automatic Dismissal”