The court held its nose and slogged through the trustee’s lengthy complaint riddled with errors and legal misconceptions to find that the debtor’s retirement accounts totaling approximately $1.7 million were not property of the bankruptcy estate. McDonnell v. Gilbert (In re Gilbert), No. 21-12725, Adv. Proc. No. 22-1005 (Bankr. D. N.J. Aug. 23, 2022). [Read more…] about $1.7 Million Retirement Accounts Not Part of Estate
SG Agrees 10th Erred But Opposes Cert
Despite agreeing that the Tenth Circuit got it wrong, the Solicitor General for the United States filed a brief opposing certiorari in the case of Kinney v. HSBC Bank USA, No. 21-599 (brief filed Aug. 30, 2022). The issue was a simple one: whether the debtor could receive a completion discharge under section 1328(a) when she missed the final three payments on her mortgage due to a car accident, but made up the payments shortly after her plan expired. [Read more…] about SG Agrees 10th Erred But Opposes Cert
DCS Properly Sought to Collect Child Support after Settlement
The Oregon Division of Child Services did not violate the automatic stay or the terms of the confirmation order when it engaged in collection activities where the efforts related to a time not covered by the debtor’s settlement agreement with his ex-wife forgiving all child support payments predating the adoption of their child. In re Bronson, No. 20-30704 (Bankr. D. Ore. Aug. 23, 2022). [Read more…] about DCS Properly Sought to Collect Child Support after Settlement
Debt Based on Breach of Pre-Divorce Stipulation Nondischargeable
A debt based on breach of a Stipulated Agreement that was incorporated but not merged into the final Judgment of Divorce was a debt “in connection with” a divorce decree within the meaning of section 523(a)(15) and was therefore nondischargeable in bankruptcy. Monassebian v. Monassebian, No. 21-41251, Adv. Proc. No. 21-1162 (Bankr. E.D.N.Y. Aug. 1, 2022). [Read more…] about Debt Based on Breach of Pre-Divorce Stipulation Nondischargeable
Sorry, Can’t Confirm Plan If You’re Dead
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…] about Sorry, Can’t Confirm Plan If You’re Dead
“Special Charges” Not Included in Priority Tax Debt
The City of Milwaukee failed to present evidence that the “special charges” on the debtor’s delinquent property tax bill were in the nature of property taxes entitled to priority in the debtor’s chapter 13 plan. In re Peete, No. 21-23863 (Bankr. E.D. Wisc. June 30, 2022).
When the debtor filed for bankruptcy, the City of Milwaukee filed a claim for delinquent property taxes of which it claimed $26,754.99 as an unsecured priority debt. Ninety percent of the claim, however, represented special charges consisting of delinquent municipal services, delinquent storm water account, delinquent water account, and “total other special.” Only $903.36 of the claim represented “tax principal.” Additionally, $2,242.87 of the total amount represented interest and penalties.
The debtor objected to the claim’s priority status arguing that the special charges were not property tax debt entitled to priority under section 507(a)(8)(B). He filed a chapter 13 plan consistent with that view, and the City objected to confirmation. [Read more…] about “Special Charges” Not Included in Priority Tax Debt
Tenancy by Entirety Not Exempt from IRS Debt
The debtor could not exempt property of the estate which he owned as a tenant in the entirety with his non-filing spouse with respect to a debt he owed to the IRS where section 522(b)(3)(B) exempts such property only to the extent it would be exempt under nonbankruptcy law and the Tax Code permits the IRS to collect against the property. Morgan v. Bruton (In re Morgan), No. 21-891 (N.D. N.C. Aug. 12, 2022). [Read more…] about Tenancy by Entirety Not Exempt from IRS Debt
Silla v. Ghazvini, No. 22-1092 (BAP 9th Cir.)
Type: Amicus
Date: July 25, 2022
Description: Interest rate on arrears
Result: Pending
Numa Corp. v. Diven, No. 22-15298 (9th Cir.)
Type: Amicus
Date: July 25, 2022
Description: Sanctions for continuation of tribal case despite automatic stay.
Result: Judgment affirmed, November 22, 2022.
Evans v. McCallister, No. 22-35216 (9th Cir.)
Type: Amicus
Date: July 6, 2022
Description: Whether the bankruptcy court erred in ruling that the Chapter 13 trustee may not retain a fee in a case dismissed prior to confirmation of a plan.
Result: Pending