Where no Qualified Domestic Relations Order (QDRO) has yet been entered, the debtor’s claim for equitable distribution of her ex-husband’s pension is property of the estate and the trustee is free to negotiate a settlement agreement with respect to that pension. Walsh v. Urmann (In re Urmann), No. 11-21606 (Bankr. W.D. Pa. Apr. 15, 2014). [Read more…] about Debtor’s Claim to Equitable Distribution from Spouse’s Pension Property of Estate
Contributions to 401(k) One Factor in Abuse Analysis
401(k) contributions may be considered when determining whether the debtors’ chapter 7 case should be dismissed for abuse pursuant to section 707(b)(3)(B). In re Nunna, No. 13-5679 (Bankr. M.D. Fla. May 13, 2014). In Nunna, the Acting U.S. Trustee filed a motion to dismiss the debtors’ chapter 7 case as abusive. The bankruptcy court granted the trustee’s motion. [Read more…] about Contributions to 401(k) One Factor in Abuse Analysis
Trustee May Not Compel Use of Non-Estate Property in Modified Plan
Relying on Eleventh Circuit precedent, a Georgia bankruptcy court found that a debtor could not be compelled to contribute life insurance proceeds received more than 180 days post-petition to his modified chapter 13 plan. In re McAllister, 2014 WL 1624106 (Bankr. N.D. Ga. April 3, 2014). [Read more…] about Trustee May Not Compel Use of Non-Estate Property in Modified Plan
Chapter 7 Lien Strip Issue in Eleventh Circuit Unclogged
Cases have been piling up in the Eleventh Circuit challenging that court’s position that a chapter 7 debtor may strip a wholly unsecured lien. See In re Brown No. 13-14298 (lead case). But that court’s recent decision in Bank of Amer. v. Toledo-Cardona, No. 13-15855 (May 15, 2014) (relying on McNeal), and more significantly, its denial of petitions for rehearing and rehearing en banc in the case of McNeal v. GMAC Mortg., LLC, 735 F.3d 1263 (11th Cir. 2012) pet. den. (May 20, 2014), suggest that movement toward Supreme Court resolution may be in the offing. [Read more…] about Chapter 7 Lien Strip Issue in Eleventh Circuit Unclogged
Filing Fee Increase
The Judicial Conference of the United States has approved several bankruptcy-related fee increases starting on June 1, 2014. The new fees will be:
Chapter 7: $335 (up from $ 306)
Chapter 9: $1,717 (up from $1,213)
Chapter 11: $1,717 (up from $1,213)
Chapter 12: $275 (up from $246)
Chapter 13: $310 (up from $281)
Chapter 15: $1,717 (up from $1,213)
The last increase in filing fees was on November 1, 2011.
Trustee Stands in Shoes of Creditor upon Avoidance of Lien
In a methodical and thorough opinion, the First Circuit found that “preservation of a lien entitles a bankruptcy estate to the full value of the preserved lien–no more and no less.” Under this principle, the court found that the trustee did not have the power to sell the debtor’s homestead where the trustee avoided the primary lien on the residence but the debtor was current on the mortgage and her homestead exemption exceeded the value of the property. DeGiacomo v. Traverse (In re Traverse), No. 13-9002 (1st Cir. May 23, 2014). [Read more…] about Trustee Stands in Shoes of Creditor upon Avoidance of Lien
Petition for Cert. On Appealability of Confirmation Denial
The issue of whether denial of confirmation is a final, appealable, order has made its way to the Supreme Court in a petition for certiorari filed by the debtors. Gordon v. Bank of Amer., S. Ct. No. ____ (filed May 22, 2014). [Read more…] about Petition for Cert. On Appealability of Confirmation Denial
Same-Sex Couple May File as Joint Debtors
The debtors, a same-sex couple, were legally married in Iowa but lived and filed for chapter 13 bankruptcy as joint debtors in Wisconsin. Creditor, Seaway Bank, moved to dismiss or, in the alternative, to bifurcate the bankruptcy petition. Finding that a federal bankruptcy court must recognize the validity of a marriage that was legal in the state in which it took place, the court denied Seaway’s motion. In re Matson, No. 13-35361 (Bankr. E.D. Wisc. Apr. 29, 2014). [Read more…] about Same-Sex Couple May File as Joint Debtors
Going to Jail for Being Poor
NPR did a story this week about how the poor are being saddled by increasing fees associated with the criminal justice system. The story highlights a disturbing trend in which people are facing jail time that is disproportionate to their crime because they are too poor to pay assessed fees, such as electronic monitoring fees, collection fees, probation fees, and public defender fees. A case currently pending before the Third Circuit Court of Appeals, In re Lopez, challenges lower court decisions holding that such fees are non-dischargeable fines and penalties. In Lopez, the debtor does not contest the nondischargeability of his restitution debt, but he does argue that more than $1,000 in costs for items such as the Judicial Computer Project, Firearm Education and Training Fund, collection fees, etc. are dischargeable. Last week, the Bankruptcy Court for the Western District of Missouri in In re Miller, 2014 WL 2012828 (Bankr. W.D. Mo. May 15, 2014) adopted an argument similar to that made by Lopez and held that such fees did not constitute a “fine, penalty or forfeiture” because the purpose of imposing the fees is not penal in nature.
Tax Liability Nondischargeable Where Returns Filed Post-Assessment
Massachusetts law treats post-assessment, late-filed, tax returns as “abatement applications” and, therefore, any tax liability based on those documents is nondischargeable. Pendergast v. Mass. Dept. of Rev. (In re Pendergast), No. 13-32 and Wood v. Mass. Dept of Rev. (In re Wood), No. 13-058 (B.A.P. 1st Cir. May 2, 2014). [Read more…] about Tax Liability Nondischargeable Where Returns Filed Post-Assessment