Wednesday, September 4, 2013

Chapter 13 Debtor has Standing To Sue

In the case of Smith v. Rockett, et al., (10th Cir. 2008) the Court held that standing is assessed as of the time the action is commenced. The four circuits who have considered this issue have concluded that chapter 13 debtors have standing to bring claims in their own name on behalf of the bankrupty estate. See Crosby v. Monroe County, 394 F.3d 1328, 1331 n. 2 (11th Cir. 2004). It would frustrate the purpose of section 1306 to prohibit the debtor rom pursuing the chose in action for the benefit of the estate.

In chapter 13 cases where the debtor is the party plaintiff, the courts recognize that the Chapter 13 debtor controls the litigation as well as the terms of the settlement. Crosby v. Monroe County, 394 F.3d 1328, 1331