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 - July 8th, 2022
A creditor that fails to object to treatment of its loan in the debtor’s proposed chapter 13 plan cannot object to modification of that plan where the modification did not change treatment of its loan. In re Powell, No. 21-3069 (Bankr. D.S.C May 16, 2022). Read More
Posted by NCBRC - June 8th, 2022
The below-median debtor was entitled to confirmation of his chapter 13 plan where he proposed his plan in good faith and committed all of his disposable income to it despite the fact that he was in the middle of a divorce and his income and expenses were in a state of flux. In re Szafraniec, No. 21-10216 (Bankr. N.D. Ill. May 27, 2022). Read More
Posted by NCBRC - May 16th, 2022
The debtor’s proposed amendment to file her chapter 11 petition under the newly enacted SBRA under which only the debtor could have a plan confirmed, would unduly prejudice the mortgage creditor who expended a great deal of time, expense, and effort to negotiate and obtain approval of its own plan. Ventura v. Gregory Funding, No. 20-1949 (E.D.N.Y. April 21, 2022). Read More
Posted by NCBRC - April 15th, 2022
In a consolidated opinion, the Bankruptcy Court for the District of Massachusetts held that the “equal payment provision of § 1325(a)(5)(B)(iii) is best read to prohibit confirmation of a sale plan, over the objection of a secured creditor holding a mortgage of a principal residence, that contemplates periodic payments followed by a lump-sum payment.” In re Materne, No. 20-40027, and In re Gnaman, No. 19-40930 (Bankr. D. Mass. April 7, 2022). Read More
Posted by NCBRC - February 14th, 2022
Deepening the split among lower courts, in McCallister v. Evans, et al., No. 20-112 (D. Ida. Feb. 8, 2022). Chief Judge Nye of the District of Idaho, held that the chapter 13 trustee is entitled to retain her commission on funds collected from the debtors even though the debtors’ case was dismissed prior to confirmation. While recognizing the split of authority, the court followed in the footsteps of the Ninth Circuit Bankruptcy Appellate Panel in favoring the language of 28 U.S.C. § 586(e)(2) and dodging the clear textual differences between section 1326(a)(2)—applicable in chapter 13—and section 1226(a)(2)—applicable in chapter 12. Read More
Posted by NCBRC - December 9th, 2021
A chapter 13 debtor’s post-petition contributions to his qualified retirement account may be deducted from the calculation of his projected disposable income and the amount of those contributions is presumed to be the average contribution made during the six months preceding bankruptcy. Where, as here, the debtor substantially increased his contributions on the eve of bankruptcy, he bears the burden of proving that his projected disposable income calculation should be reduced by the increased retirement account contributions. In re Huston, 2021 WL 4528883 (Bankr. N.D. Ill. Sept. 30, 2021) (case no. 20-81689). Read More
Posted by NCBRC - December 7th, 2021
The standing chapter 13 trustee must return his percentage fee to the debtor when the debtor’s plan is not confirmed. Doll v. Goodman (In re Doll), No. 21-731 (D. Colo. Dec. 6, 2021).
The debtor filed for chapter 13 bankruptcy and made $29,900 in plan payments to the standing trustee prior to confirmation. Of that amount, $19,800 went to his counsel, $7,503.30 was disbursed to the Colorado Department of Revenue on a priority tax claim, and the remaining $2,596.70 was retained by the standing trustee as part of his statutory 10% trustee fee. The plan was not confirmed and the bankruptcy court allowed the trustee to retain his fee over the debtor’s objection. The debtor appealed to the district court. Read More
Posted by NCBRC - December 2nd, 2021
Nothing in the Code requires a debtor to provide for a claim secured by his principal residence in his chapter 13 plan. In re Jones, 2021 WL 4465554 (Bankr. E.D. N.C. Sept. 29, 2021) (case no. 20-03607).
When he filed for chapter 13 bankruptcy, the debtor listed food stamps and VA disability benefits as his only source of income. He also listed his principal residence as securing a debt to Bank of New York Mellon (BONY). The debtor’s second amended proposed plan omitted any provision for BONY’s claim relating to the residence. The plan also specified that the debtor could sell the property without notice to the court or the chapter 13 trustee. BONY objected to confirmation arguing that section 1325(a) required the debtor to provide for its secured claim in the plan. The trustee also objected to confirmation on feasibility grounds and because of the provision relating to non-notification in the event of sale. The standing chapter 13 trustee filed an amicus brief on the issue of notice and on the grounds that the debtor’s failure to treat the secured claim in his plan violated section 1325(a)(3) and (5). Read More
Posted by NCBRC - October 21st, 2021
The chapter 11 debtor could not modify her residential mortgage even though much of the property securing the mortgage was used for income-producing purposes. Lee v. U.S. Nat’l Bank Ass’n, No. 20-222 (M.D. Ga. Oct. 4, 2021).
The debtor’s residence was located on forty-three acres of land of which she rented out approximately thirty-five acres as farmland. She took out a mortgage on the property in 2007 and, acting on the advice of the mortgagee, in 2010, allowed the mortgage to go into default in the expectation of refinancing the loan under the federal Housing Action Resource Test (HART). When she was unable to refinance, she filed for chapter 11 bankruptcy seeking to modify the mortgage.
US National Bank filed a claim as trustee for RMAC Trust, Series 2016-CTT (the Trust), in the amount of $253,070.25, representing $139,195.75 in unpaid principal and $82,228.15 in interest. It moved for relief from stay, and the bankruptcy court granted the motion finding that section 1123(b)(5) prohibited modification of the mortgage. The debtor appealed to the district court. Read More
