Posted by NCBRC - September 18th, 2013
After the chapter 7 debtors received their discharge they disclosed to the trustee that they had received funds as a result of a settlement agreement between the Federal Reserve and SunTrust Mortgages. They moved to reopen their bankruptcy and amend their schedules to reflect the payment. They also sought to exempt the payment as related to a “potential wrongful foreclosure claims against SunTrust Mortgage” under applicable state exemption laws. The trustee objected to the exemption and sought to administer the payment as part of the bankruptcy estate.
The issue turned on whether the payment was a “legal or equitable interest” of the debtors that existed as of the commencement of the case. The bankruptcy court found that it was not. In re Vanwart, No. 13-515 (Bankr. E.D. N.C. Aug. 27, 2013).
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Posted by NCBRC - September 13th, 2013
The district court for the southern district of Georgia held that settlement proceeds from post-confirmation violation of the automatic stay under section 362(k) are property of the chapter 13 estate under section 1306(a)(1). Crouser v. BAC Home Loans Servicing, No. 12-156 (S.D. Ga. Aug. 21, 2013). Read More
Posted by NCBRC - August 26th, 2013
The NACBA membership has filed an amicus brief in the case of Viegelahn v. Harris (In re Harris), No. 13-50374 (5th Cir. August 20, 2013) seeking affirmance of the lower courts’ opinions. There, the debtor filed a chapter 13 petition, but after a good faith attempt to fulfill his obligations under the plan, he converted to chapter 7. The trustee sought to distribute debtor’s wages collected pursuant to the plan but not yet distributed at the time of conversion. Read More
Posted by NCBRC - June 14th, 2013
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
Posted by NCBRC - April 17th, 2013
When the sale price exceeds the value of the property but is less than the aggregate of all liens secured by that property, section 363(f)(3) does not authorize sale of the property. In re Jaussi, No. 12-34062 (Bankr. D. Colo. March 18, 2013). In Jaussi, the chapter 7 trustee moved to sell debtor’s land valued at $39,000.00 to the senior mortgagee for $1,500.00 . Between the mortgage holder and two judgment lienholders, the property was encumbered to the tune of $44,040.56 with $40,181.00 of that amount owed on the mortgage. The motion sought to make the sale free and clear of the two junior judgment liens.
The court found that the sale was not permitted by the Code. Specifically, the sale did not fall under either of the two relevant conditions set forth in section 363(f), under which a trustee may sell estate property free and clear of liens when: “(1) applicable nonbankruptcy law permits sale of such property free and clear of such interest,” or “(3) such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property.”
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Posted by NCBRC - April 15th, 2013
What happens to funds paid into a confirmed chapter 13 plan that are still in the trustee’s possession when the bankruptcy is converted to chapter 7? That is the question recently answered by the district court for the Western District of Texas. The trustee had distributed the funds to creditors post-conversion and upon motion by the debtor, the bankruptcy ordered turnover to the debtor. Relying in large part on the Third Circuit case of In re Michael, 699 F.3d 305 (2012) in which NACBA participated as amicus, the district court affirmed. Veigelahn v. Harris (In re Harris), No. 12-540 (W.D. Tex. March 22, 2013). Read More
Posted by NCBRC - March 24th, 2013
In an important win for debtors, the BAP for the Eighth Circuit found that, under section 541 a debtor’s post-petition bonuses were not property of her bankruptcy estate. Klein-Swanson v. Seaver (In re Klein-Swanson), No. 12-6054 (B.A.P. 8th Cir. March 22, 2013). Read More
Posted by NCBRC - January 11th, 2013
The Fourth Circuit has agreed to hear a direct appeal to address the issue of whether an inheritance received more than 180 days post-petition is property of the chapter 13 estate. Carroll v. Logan (In re Carroll), No. 13-1024. The debtors received a $100,000.00 inheritance after the 180 day period had lapsed and the trustee sought to modify the plan to include those funds. The bankruptcy court found that the inheritance was part of the estate and granted the trustee’s motion. In re Carroll, 2012 WL 5512356 (Bankr. E.D. N.C. Nov. 14, 2012). Read More
Posted by NCBRC - August 8th, 2012
In an action comparable to two wolves and a sheep voting on what to have for dinner, the Bankruptcy Court for the Southern District of Florida stepped in on behalf of the sheep and disapproved a settlement agreement under which the trustee sought to waive the debtor’s defenses in an underlying state court foreclosure action. In re Larkin, 468 B.R. 431 (Bankr. S.D. Fla. 2012). Read More
