The movant bears the burden of demonstrating by a preponderance of the evidence that the debtor’s debts were “consumer” rather than “business,” and the debtor’s subjective purpose in taking out the loans is a crucial factor where the debts do not fall neatly into either category. Centennial Bank v. Kane, No. 21-4597 (N.D. Cal. July 22, 2022). [Read more…] about Refinancing Loans Not Consumer Debts
Debtor Not Fiduciary to Mother’s Nursing Home
A state court judgment for breach of contract was dischargeable in the debtor’s chapter 7 bankruptcy where the breach occurred when the debtor, acting as Power of Attorney for her mother, entered into a contract with her mother’s nursing home and, acting upon advice from her mother’s legal counsel, failed to comply with its terms. The court found the debtor was not a fiduciary with respect to the nursing home and did not act with willfulness or malice. Presbyterian Home for Central NY, Inc. v. DeFazio, No. 20-80009 (June 23, 2022). [Read more…] about Debtor Not Fiduciary to Mother’s Nursing Home
Debtor Squeezes Through Loophole and Lands in Dismissal
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
Debtors May Not Modify Plan to Deprioritize State’s Claim
The bankruptcy court erred in permitting the debtors to modify their chapter 13 plan to deprioritize the State of Wisconsin’s claim based on a public assistance overpayment, where the only authority for such modification would come from Rule 60(b)(1) and the debtors sought the modification too late to rely on that Rule. In the Matter of Terrell, No. 21-3059 (7th Cir. July 12, 2022). [Read more…] about Debtors May Not Modify Plan to Deprioritize State’s Claim
Debtors Need Not File Annual Updated Schedules
In a nice win for long-time NACBA member, Greggory Colpitts, the Bankruptcy Court for the Southern District of Oklahoma declined to place a prospective order requiring all chapter 13 debtors to submit annual tax returns and updated schedules I and J where the Code and local rules provide for annual filing of tax returns with the bankruptcy court, and section 521(f) requires debtors to file further financial information upon request by the trustee. In re Williams, No. 18-80539 (Bankr. S.D. Okla. July 5, 2022).
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Creditor Could Not Object to Modification that Did Not Change Treatment of its Loan
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…] about Creditor Could Not Object to Modification that Did Not Change Treatment of its Loan
Lender Sanctioned for Self-Inflicted Wound
The lender’s efforts to coerce the debtors to reopen their bankruptcy case to reaffirm the mortgage agreement violated the discharge injunction where post-discharge reaffirmation was legally unavailable and the court found the lender was merely attempting to collect personally against the debtors. In re Go, No. 21-12657 (Bankr. D. Nev. June 29, 2022). [Read more…] about Lender Sanctioned for Self-Inflicted Wound
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
Language in Divorce Order Did Not Deprive Debtor of Right to Exemption
The debtor’s interest in her ex-husband’s retirement account was exemptible in her bankruptcy even though the funds had not yet transferred and the Judgment of Dissolution order stated that the funds were to be used to pay off the debtor’s credit card debt. In re Steinke, No. 21-90618 (Bankr. C.D. Ill. June 15, 2022). [Read more…] about Language in Divorce Order Did Not Deprive Debtor of Right to Exemption
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