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Bankruptcy Cases | |
Listed cases are intended as suggestions for areas of research. They may not be applicable in all jurisdictions and may be subect to contrary rulings. |
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§ 101(12A)
defines "Debt Relief Agencies"; §
526(a)(4) restricts debt agencies from advising clients to incur debt; §§
528(a)(4) and (b)(2)
require disclosures in advertising ("We are a debt relief agency.
...") |
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MILAVETZ v. U.S.,
08-1119 (U.S. Supreme Court 3-8-2010) HERSH v. U.S.,
07-10226 (5th Cir. 12-18-2008) MILAVETZ v. U.S.,
541 F.3d 785 (8th Cir. September 4, 2008) ZELOTES v.
ADAMS,
(Conn. 2-27-2007) OLSEN v.
GONZALES,
(Or. 8-6-2006)
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§ 362 places a stay
against collection activities of all entities into effect with the filing of a
Bankruptcy case. |
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CAMPBELL v.
COUNTRYWIDE HOME LOANS INC.,
07-20499 (5th Cir. 10-13-2008) BURKART v. COLEMAN
(In re TIPPETT)
(9th Cir. Sept. 4,
2008) |
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§ 507(a)(8)(A)(i) - Chapter 7 & 13-3 year period making taxes under due and unfiled tax returns nondischargeable under 11 U.S.C. § 507(a)(8)(A)(i) is tolled during pendency of a prior bankruptcy. |
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YOUNG v. UNITED STATES, 535 U.S. 43 (2002) 122 S.Ct. 1036, March 4, 2002.
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§ 554 - Chapter 7-Technical
Abandonment Is Revocable |
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LPP MORTGAGE v. BRINLEY, 07-6211 (6th Cir. 11-24-2008)
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§ 706(a) - Chapter 7-Limitation on ability to convert Chapter 7 case to Chapter 13 under 11 U.S.C. § 706(a). |
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MARRAMA v. CITIZENS BANK OF MASSACHUSETTS, 549 U.S. 365 (2007) 127 S.Ct. 1105, February 21, 2007.
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§ 707(b)(2) - The Means Test [See also The Means Test Flowchart] § 707(b)(2)(A)(ii)(I), § 1325(b)(2)(A)(I) and (ii) and vehicle expenses. § 707(b)(2)(A)(ii)(I)
specifies the debtor's monthly expenses as including "applicable
monthly expense amounts" in the Local Standards issued by the Internal
Revenue Services. Courts have been divided as to whether the expense for vehicle
ownership costs in the Local Standards should be included as an expense when no
debt owed on the vehicle in question. |
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ROSS-TOUSEY v.
NEARY,
07-2503 (7th Cir. Dec. 17, 2008) - Vehicle ownership NOT required
to use expense. IN RE PEARSON
(10th Cir. BAP 7-28-2008) - Vehicle ownership NOT required to use
expense. IN RE KIMBRO,
07-8052 (6th Cir. BAP June 12, 2008) - Vehicle ownership NOT
required to use expense. IN RE WILSON,
07-6050 (8th Cir. BAP 3-14-2008) - Vehicle ownership REQUIRED to
use expense. IN RE RANSOM,
(9th Cir. BAP 12-27-2007) - Vehicle ownership REQUIRED to use
expense. IN RE
RAGLE,
(E.D.Ky. 9-29-2008) - Vehicle ownership NOT required to use
expense. Other cases: Footnotes in In
re Pearson (10th Cir. BAP 7-28-2008) (above) lists bankruptcy cases by
their holding on this issue: |
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§ 727(a) - Chapter 7- A debtor that fails to keep or preserve records has the burden to justify the failure in order to receive a discharge. 11 U.S.C. § 727(a) |
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IN MATTER OF CANEVA,
07-15686 (9th Cir. 11-5-2008)
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§ 1325(b)(2) - Chapter 13-Above-median Chapter 13 debtor's plan must extend for five years when the debtor has a negative "disposable income" as defined in 11 U.S.C. § 1325(b)(2). |
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IN RE FREDERICKSON, 07-3391 (8th Cir. 10-27-2008)
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§ 1325(b) - "Projected disposable income" in Chapter 13 Plan Courts have adopted two main approaches to calculation of "Projected disposable income" under § 1325(b). The first approach has been called "multiplicative" or "mechanical" applying the definitions for "current monthly income" in § 101(10A) and deductions in § 707(b)(2) literally. The second approach, called "forward looking," stretches the code language to project the debtor's disposable income during the period of the plan in an attempt to better approximate the debtor's reality. The second approach has been adopted by the majority of courts. [Rev. 1-2008] |
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IN RE LANNING,
08-3009 (10th Cir. 11-13-2008) - Forward Looking IN RE
FREDERICKSON,
07-3391 (8th Cir. 10-27-2008) - Forward Looking IN RE PETRO,
08-8009 (6th Cir. 10-17-2008) - Forward Looking IN RE ZAHN,
06-6072 (8th Cir. 8-14-2008) - Multiplicative IN RE KAGENVEAMA,
(9th Cir. June 23, 2008) [Amendment of order of June 5, 2008]] -Multiplicative IN RE JOHN PAK,
(9th Cir. BAP 11-7-2007) - Forward Looking |
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§ 1325(a)(5)
- The last paragraph of this section prohibits splitting claims into secured and
unsecured portions if they are secured by purchase money security interests in
vehicles acquired for the debtor's personal use within 910 days preceding the
filing of the Chapter 13. But, must the plan pay interest? And must
that interest be paid on just the value of the collateral, or on the full amount
of the claim? |
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TILL v.
SCS CREDIT CORP.
(U.S. Supreme Ct. May 17, 2004) IN RE DEAN
(11th Cir. Aug. 7, 2008) IN RE JONES
(10th Cir. July 7, 2008) In re Trego (9th
Cir. BAP July 30, 2007) IN RE TARANTO
(6th Cir. BAP Mar. 30, 2007) |
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§ 1326 directs debtors to commence payments to the trustee within 30 days after the case is filed. But does that mean that all payments must be made through the trustee, or can the debtor pay some creditors directly? |
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Cohen v. Lopez
(In re Lopez)
(9th Cir. Dec. 24, 2008) In re Lopez
(9th Cir. BAP
Aug. 3, 2007)
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§
1328(f) prohibits the granting of a discharge in a Chapter 13 case
filed within 4 years after a prior case filed under Chapter 7, 11, or 12,
and within 2 years after a prior case filed under Chapter 13. |
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IN RE SANDERS,
08-1201 (6th Cir. 12-29-2008) IN RE: BATEMAN
(4th Cir. 02-04-2008)
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Chapter 7 (primarily)-Elements of fraud for denial of discharge under 11 U.S.C. § 523(a)(2)(A). |
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In re Slyman, 234 F.3d 1081 (C.A . 9th Cir. 2000) The elements of fraud which must be proved to deny discharge under 11 U.S.C. § 523(a)(2)(A) are:
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Chapter 7 (primarily)-Reckless disregard satisfies the knowledge of falsity or deceptiveness element of fraud for denial of discharge under 11 U.S.C. § 523(a)(2)(A). |
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In re Kong, 239 B.R. 815 (9th Cir .BAP 1999) Issuer of credit brought adversary proceeding to except credit card debt from discharge as money obtained by "false pretenses, false representation or actual fraud." Of five elements of fraud, only whether Debtor fraudulently failed to disclose his intent not to repay was at issue. While court found that "reckless disregard for the truth of a representation satisfies the element that the debtor has made an intentionally false representation in obtaining credit" the fact that that debtor took two cash advances from his Advanta account totaling $11,095.96 for gambling did not satisfy that element.
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Chapter 7 & 13--The $125,000 limitation for homesteads under The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 may not apply to opt-out states such as Arizona. |
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In re McNabb, Case No. 2-05-07495-RJH, District of Arizona, June 23, 2005. (pdf format)
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Chapter 13--Stripping Second Mortgage: Wholly unsecured second mortgage may be stripped from homestead. |
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In re Zimmer, 313 F.3d 1220 (C.A.9 (Cal.), 2002). Chapter 13 debtor filed adversary complaint seeking to avoid a $39,000 second mortgage. The value of property ($110,000) securing the mortgage was less than the balance of the first mortgage ($123,000) making the second position deed of trust wholly unsecured. The Bankruptcy Court dismissed the complaint for failure to state a claim, and debtor appealed to the District Court which affirmed the lower court. The 9th Circuit Court of Appeals reversed and remanded the case finding that the Bankruptcy Code's antimodification protection of §1322(b)(2) is only available to holders of secured claims, so a wholly unsecured lien on a primary residence may be avoided in a Chapter 13 proceeding. §1322(b)(2) allows a debtor's plan to "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence." In re Lam, 211 B.R. 36 9th Cir.BAP (Cal.),1997. Chapter 13 debtors filed adversary proceeding against holder of a fourth position deed of trust on their residence (valued at $300,000, with first, second, and third deeds of trust of $164,222, $61,824, and $560,000, respectively) asking the court to "strip off" the wholly unsecured fourth lien. The creditor failed to appear, and debtors moved a default judgment. The Bankruptcy Court, denied the motion based on Nobelman (below). On appeal, the Bankruptcy Appellate Panel reversed the Bankruptcy Court holding that Bankruptcy Code's antimodification provision does not protect "secured" creditors holding completely unsecured claims. Nobelman v. American Savings Bank, 508 U.S. 324, 113 S.Ct. 2106, 124 L.Ed.2d 228 (U.S. Supreme Ct. 1993). Summary of Nobleman quoted from In re Zimmer (above): In Nobelman, the Supreme Court considered the question of whether a partially-secured claim secured by a homestead lien could be bifurcated into its secured and unsecured components, and "stripped down" to the value of the secured claim. See id. at 326-27, 113 S.Ct. 2106. The debtors argued that, under § 506(a), the holder of an undersecured mortgage--for which the value of the claim exceeds the value of the property--only holds a "secured claim" to the extent of the value of the property, and holds an "unsecured claim" for the excess value of the mortgage. Id. at 328, 113 S.Ct. 2106. Because § 1322(b)(2) only protects the rights of "holders of secured claims," they maintained that only the secured portion of the mortgage was entitled to protection and, therefore, that the value of the mortgage could be effectively reduced to its secured value. Id." The Supreme Court rejected this approach of bifurcation and stripping down, primarily because the debtors' argument failed to consider the fact that § 1322(b)(2) "focuses on the modification of the 'rights of holders,' " id., not the status of claims. Although the Court found that it was proper to look to § 506(a) "for a judicial valuation of the collateral to determine the status of the [creditor's] claim," id., because the creditor's claim was partially secured, the creditor was "still the 'holder' of a 'secured claim.' " Id. at 329, 113 S.Ct. 2106. Therefore, it was entitled to the protections of the antimodification clause."
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Chapter 13--Disposable Income: Debtor not required to turn over tax refunds received during plan. |
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In re Heath, 182 B.R. 557 (9th Cir.BAP 1995) Bankruptcy court denied the trustee's request that debtors pay postpetition tax refunds to the trustee in addition to plan payments. The court held that the amount of future income had to be subject to some showing of projected income. The court noted that the trustee should have been able to determine whether the debtors were overwithholding by reviewing the tax forms prior to the deadline for objecting to the plan. The Bankruptcy Appellate Panel agreed with the bankruptcy court.
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Chapter 13--Disposable Income: Life insurance may be a necessary expense. |
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In re Smith, 207 B.R. 888 (9th Cir.BAP 1996) Bankruptcy court denied confirmation of a Chapter 13 Plan because the disposable income requirement was not met when the budget included payment of a $300 per month life insurance premium. The bankruptcy court was applying a blanket rule disallowing life insurance premiums as a necessary expense. Debtors argued that they were elderly and had two dependents, a mentally handicapped 21 year old son and a three year old granddaughter. (No findings of fact had been made by the Bankruptcy court.) In vacating the order of the bankruptcy court denying confirmation and remanding the case, the Bankruptcy Appellate Panel found that a blanket rule was inappropriate and whether such an expense would be allowed was for the exercise of discretion of the court.
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Chapter 13--Disposable Income: Debtor's community interest in spouse's income must be considered in calculating debtor's disposable income. |
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In re Hull, 251 B.R. 726 (9th Cir.BAP 2000) Bankruptcy court excluded the income of the debtor's non-filing wife in calculating the debtor's disposable income. The Bankruptcy Appellate Panel reversed and remanded for the court to include the debtor's interest in his wife's income, which was community property where debtors resided (Washington), in the calculation of the debtor's disposable income. Possible exceptions to inclusion under Washington state law would include income while the spouses were living separated and apart, and a separation agreement--which might not be given effect as to claims which existed when the agreement was executed.
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Chapter 13--Disposable Income: Plan must provide for payment of debtor's projected disposable income, not the actual income. |
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In re Anderson, 21 F.3d 355 (9th Cir. 1994) Bankruptcy court denied confirmation of a Chapter 13 Plan because the debtors refused to sign a certification agreeing to pay all of their actual disposable income to the trustee during the period of the plan. In reversing the bankruptcy court, the Court of Appeals followed the explicit language of § 1325(b)(1)(B) which "requires provision for 'payment of all projected disposable income' as calculated at the time of confirmation." The court rejected "the Trustee's attempt to impose a different, more burdensome requirement on the debtors' plan as a prerequisite to confirmation. The court sated that it was adopting the Fifth Circuit's interpretation stated in Matter of Killough, 900 F.2d 61(5th Cir. 1990).
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Chapter 13--Disposable Income: Contributions to retirement plans must generally be included in "disposable income," even if mandatory. Plan length may be extended to compensate for the contributions. |
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In re Mendoza, 274 B.R. 522 (Bkrtcy.D.Ariz. 2002) Bankruptcy Court, Eileen W. Hollowell, (Tucson) sustained the Trustee's objection to debtors' proposed Chapter 13 plan, because under it debtors would continuing making monthly retirement contributions postpetition and would not be devoting all of their disposable income to plan payments. Judge Hollowel held that: (1) contributions to "mandatory employee retirement plan had to be included in "disposable income," and (2) debtors could continuing to make such contributions postpetition if debtors elected to extend plan term.
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Chapter 13--Modification of Plan: A plan may be modified to include the curing of a postpetition default in mortgage payments. |
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In re Hoggle, 12 F.3d 1008 (11th Cir. 1994) Mortgage company moved for relief from stay in Chapter 13 because of a default in post-confirmation mortgage payments. Bankruptcy court denied motion and modified plan to include the curing of the post-confirmation default. Court of Appeals cited §1322(b) permitting a plan to:
The court stated that the debtor may modify the plan at any time under § 1329 provided that the plan meets the requirements of §1322. The court concluded: "Accordingly, we conclude that a confirmed Chapter 13 plan may be modified to allow the Debtor to cure a postconfirmation default pursuant to § 1322(b)(5) with the postconfirmation arrearage to be paid under the modified plan." In re Mendoza, 111 F.3d 1264 (5th Cir. 1997) Bankruptcy court refused to modify the debtor's plan to include the curing of postpetition arrears in claim secured by debtors home, believing that it did not have the authority to do so. The Court of Appeals noted a split in authority as to whether a debtor may cure such defaults and finds In re Hoggle "to be better reasoned and persuasive in holding that a Chapter 13 Plan may be modified to cure postpetition defaults through a plan of reorganization." The Bankruptcy Court could therefore modify the plan to include such a default. The court also determined that the Bankruptcy Court may also order payments to cure the payments directly to the mortgage company and may include a "drop dead" clause. The Court of Appeals remanded the case to the Bankruptcy Court to
determine whether to modify the plan, or to order the debtor to make
direct payments to the mortgage holder. Court Links United States Courts of Appeal First District Second District Third District Fourth District Fifth District Sixth District Seventh District Eighth District Ninth District Tenth District
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This page was last revised: 02/18/09 |