Where the debtor filed her second chapter 13 petition while her first case was still pending, the automatic stay was not reduced by section 362(c)(3) but, without regard to the debtor’s intent, the second case was an abuse of process and the court could dismiss sua sponte after notice and a hearing. In re Giles, No. 22-14494 (Bankr. S.D. Fla. July 15, 2022). [Read more…] about Debtor Squeezes Through Loophole and Lands in Dismissal
Carve-Out Agreement Creates Exemptible Equity
The debtor was entitled to obtain the benefit of her homestead exemption even though, at the time she filed her petition, she had no equity in the property, where “the secured creditor’s agreement to accept less money upon a sale creates equity in the home where none existed before.” Stark v. Pryor (In re Stark), No. 20-4766 (E.D.N.Y. June 28, 2022). [Read more…] about Carve-Out Agreement Creates Exemptible Equity
Cat Confiscation Case
The County Animal Control Office did not violate the automatic stay when it refused to return 36 cats it had confiscated from the debtor’s property where it acted within its police and regulatory powers, and the court lacked jurisdiction to order the return of the cats where the trustee had abandoned them. In re Mitchell-Smith, No. 21-57646 (Bankr. N.D. Ga. June 17, 2022). [Read more…] about Cat Confiscation Case
Stay Still Attaches to Undisclosed Property 30 Years after Bankruptcy
Plaintiff’s attorneys were liable for monetary contempt sanctions for violating the automatic stay due to their failure to investigate the plaintiff’s bankruptcy petition which was filed decades earlier to determine whether he had disclosed his interest in mineral rights in land that was the subject of a current state lawsuit. In re McConathy, No. 90-13449 (Bankr. W.D. La. May 20, 2022).
In 1990, the debtor and his wife filed a chapter 7 bankruptcy petition for which they received a discharge. On two occasions they reopened their bankruptcy to disclose previously undisclosed assets and in both cases the assets were addressed and the case closed. However, unbeknownst to the bankruptcy court and chapter 7 trustee, at the time he filed his petition, the debtor owned mineral rights on land in Kansas. [Read more…] about Stay Still Attaches to Undisclosed Property 30 Years after Bankruptcy
Sixth Circuit Discusses Appellate Jurisdiction
Where the BAP remanded to the bankruptcy court for a finding on whether the creditor violated the automatic stay by failing to prevent the continuation of a contempt hearing against the debtor, the Sixth Circuit relied on precedent to conclude that the BAP’s order was not final and appealable. Wohleber v. Skurko (In re Wohleber), No. 19-3223/3225 (6th Cir. Nov. 18, 2020) (unpublished). In her concurring opinion, Judge Batchelder argued that the precedent relied on by the majority was erroneous and advocated for adopting a rule that “we have appellate jurisdiction if either the bankruptcy court’s judgment or the intermediate appellate judgment is final.” [Read more…] about Sixth Circuit Discusses Appellate Jurisdiction
California Clarifies Marital Property Presumptions
Relying on the answer to a certified question propounded to the California Supreme Court regarding presumptions attached to marital property, the Ninth Circuit found that one of two properties owned by the individual debtor and his wife was community property despite its being designated a joint tenancy. Brace v. Speier (In re Brace), No. 17-60032 (9th Cir. Nov. 9, 2020).
The debtor and his wife acquired the San Bernardino property sometime after they married in 1972, and the Redlands property in 1977 or 1978. When the husband filed for chapter 7 bankruptcy, the trustee sought to sell both properties and distribute the proceeds to the debtor’s creditors. Even though both deeds characterized the properties as joint tenancies, the bankruptcy court found that, under the California Family Code, they were community property and could be sold to satisfy the husband’s debts. The BAP affirmed. In re Brace, 566 B.R. 13 (B.A.P. 9th Cir. 2017). [Read more…] about California Clarifies Marital Property Presumptions
Case Bites: Interesting Issues and Decisions from This Week’s Cases
- In an adversary discharge proceeding, can the bankruptcy court treat a motion for summary judgment (that asserts a new affirmative defense) as a motion to amend an answer? (Bankr. S.D.N.Y.)
- Can a chapter 7 trustee be awarded attorney’s fees incurred in defense of the trustee’s fee application? (Bankr. D.Colo.)
- Does a bankruptcy court have the authority to extend the time to file a dischargeability complaint on a motion filed after the deadline? (Bankr. N.D.Ga.)
- Does a pre-petition default judgment operate as collateral estoppel in a non-dischargeability complaint for fraud in bankruptcy? (Bankr. E.D.Mich.)
- Post-filing, can a mortgage company postpone scheduled nonjudicial foreclosure sales (rather than dismiss the action) without violating the automatic stay? (Bankr. D.Ut.)
To read the case outlines and opinions click here