In a chapter 13 bankruptcy filed prior to the expiration of the redemption period, a real property tax purchaser’s claim is treated as a secured claim which may be modified in the plan. Alexandrov v. LaMont (In re LaMont), No. 13-1187 (7th Cir. Jan. 7, 2014). [Read more…] about Tax Purchaser Claim May Be Modified in Chapter 13
Current Possession of Bank Funds Not Necessary for Turnover
In an unfortunate decision, the Ninth Circuit held that current possession is not necessary to turnover of funds in a checking account. Shapiro v. Henson (In re Henson), No. 11-16019 (9th Cir. Jan. 9, 2014). [Read more…] about Current Possession of Bank Funds Not Necessary for Turnover
Debtor Need Not Commit All PDI in 100% Plan
It was not enough that the chapter 13 debtors committed to paying off their unsecured debts in their entirety, the trustee demanded that they comply with the disposable income test of section 1325(b)(1)(B). In re Bailey, No. 13-60782 (Bankr. E.D. Ky. Nov. 21, 2013). [Read more…] about Debtor Need Not Commit All PDI in 100% Plan
Exemption Allowed Where No Intent to Defraud
Actual intent to hinder, delay, or defraud a creditor is a required element for a reduction of homestead exemption under section 522(o). In re Halinga, No. 13-925 (Bankr. Idaho Nov. 27, 2013). [Read more…] about Exemption Allowed Where No Intent to Defraud
Bankruptcy Cannot Be Reopened to Permit Reaffirmation Agreement
Some banks are refusing to enter into post-discharge mortgage modification agreements when debtors have not reaffirmed the debt in bankruptcy. In In re Conner, No. 09-42532 (Bankr. S.D. Ga. Oct. 25, 2013), the debtor moved to reopen his chapter 7 bankruptcy in order to reaffirm his mortgage and clear the way to enter into a mortgage modification agreement with Wells Fargo. [Read more…] about Bankruptcy Cannot Be Reopened to Permit Reaffirmation Agreement
Deed of Trust Is Functional Equivalent of Mortgage for State Foreclosure Purposes
In Cruz v. Aurora Loan Services, No. 11-1133, Adv. Proc. No. 11-90116 (Bankr. S.D. Cal. Apr. 25, 2013), the court was asked to reconsider its earlier determination that the recording requirement of California’s non-judicial foreclosure statute applies to deeds of trust. See Cruz v. Aurora Loan Servs. LLC (In re Cruz), 457 B.R. 806 (Bankr. S.D. Cal. 2011) (“Cruz I“). [Read more…] about Deed of Trust Is Functional Equivalent of Mortgage for State Foreclosure Purposes
Alimony Part of Bankruptcy Estate
Relying on South Dakota treatment of alimony, the BAP for the Eighth Circuit found that post-petition alimony payments were part of the bankruptcy estate. Mehlhaff v. Alfred (In re Mehlhaff), No. 13-6012 (B.A.P. 8th Cir. June 4, 2013). [Read more…] about Alimony Part of Bankruptcy Estate
Disallowed Claim Renders Lien Void Under 506(d)
The Fourth Circuit found that a lender’s lien was extinguished upon debtor’s discharge where the lender’s proof of claim had been disallowed due to the lender’s failure to provide the necessary documents to prove that it had a perfected security interest. National Capital Management v. Gammage-Lewis, No. 12-2286 (June 6, 2013). [Read more…] about Disallowed Claim Renders Lien Void Under 506(d)
Fifth Circuit Deals Blow to Individual Debtors in Chapter 11
The Fifth Circuit has joined the Fourth and Tenth Circuits in applying the absolute priority rule to individual debtors in chapter 11 bankruptcy. In re Lively, No. 12-20277 (5th Cir. May 29, 2013). See also In re Stephens, 704 F.3d 1279 (10th Cir. 2013); In re Maharaj, 681 F.3d 558 (4th Cir. 2012). But see In re Friedman, 466 B.R. 471 (B.A.P. 9th Cir. 2012) (finding that the rule does not apply to individual debtors). [Read more…] about Fifth Circuit Deals Blow to Individual Debtors in Chapter 11
Fourth Circuit Takes on Applicable Commitment Period Issue
The Fourth Circuit has accepted two direct appeals presenting the issue of whether the applicable commitment period for a chapter 13 plan applies when there is no projected disposable income. Both cases first treat the issue of whether an expected change in payments during the course of the plan should be considered when determining the debtor’s projected disposable income at the outset, and then deal with the relevance of the applicable commitment period where the debtor has zero or negative disposable income as calculated by the means test. [Read more…] about Fourth Circuit Takes on Applicable Commitment Period Issue