Thursday, November 14, 2013

Chapter 13 plan binds trustee
In the case of Hope v. Acorn Financial, Inc., Case No. 12-10709, 2013 U.S. App. LEXIS 19661 (11th Cir. September 26, 2013) (click here for .pdf of opinion) the Court addressed whether 11 U.S.C. §1327(a) binds the Chapter 13 Trustee to the terms of the plan, even though the Trustee is not mentioned in the statute.  Section 1327(a) provides the following:

Chapter 7 case dismissed for cause, pre-petition bad faith
In In re Piazza, 719, F.3d 1253, 2013 U.S. App. LEXIS 13072 (11th Cir. 2013) (click here for opinion), the Debtor’s Chapter 7 case was dismissed for “cause” pursuant to 11 U.S.C.  §707(a), based upon Debtor’s pre-petition bad faith.  The Bankruptcy Court found that the filing was for the purpose of avoiding a single large judgment, the judgment was a significant part of his overall debt, he transferred significant amounts of money to relatives in the two year period before filing, he failed to make lifestyle adjustments to pay his debts, and he had sufficient resources to pay his debts.  Notably, the state court judgment did not involve claims of fraud or similar misconduct, but was based on a business guarantee.   The District Court affirmed the dismissal, and the Debtor appealed.

In re: Kulakowski - 11th Circuit - No. 12-15294 - case dismissed for cause, totality of circumstances, income of non-filing spouse.

Chapter 13 eligibility amounts
In re: Claro-Lopez
506 unsecured portion includes in calculation of eligibility amount

Chapter 13 plan, student loans paid direct
In re: Abaunza,  10-37575
Chapter 13 debtor, plan pays student loans outstand plan with income over projected disposable income allowed

Early payoff of plan
In re: Rhymaun, Case 10-20092-LMI - above median income debtor, may not payoff early with proceeds of exempt homestead

Issues with resulting trust in vehicle, not allowed under facts
In re: Distefano, 10-19596

506, Chapter 7, avoidance of wholly unsecured second mortgage
In McNeal v. GMAC Mortgage, LLC, et al, No. 11-11352 (11th Cir. May 11, 2012) (click here for .pdf) the issue before the Court was whether a debtor in a Chapter 7 case can strip a second priority, unsecured lien from her residence.  At least in the Eleventh Circuit, a debtor can strip the unsecured second lien, at least according to the panel.  It remains to be seen if the full Court will hear the case.  As of now, it probably be considered persuasive, and not binding, authority.

Defalcation, definition, US Supreme Court
In a case appealed from the Eleventh Circuit Court of Appeals, the United States Supreme Court ruled on a case involving the definition of "defalcation" in 11 U.S.C. § 523(a)(4).  The case, decided yesterday, May 13, 2013, is Randy Bullock v. BankChampaign NA, 2013 U.S. LEXIS 3521 (U.S. May 13, 2013) (click here for .pdf of opinion). The issue before the Court was the definition and meaning of the term "defalcation," which is not defined in the Code.  The Court held that  “defalcation” in the Bankruptcy Code includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the fiduciary behavior.


Exemption of Tax Refund
In re: Uttermohlen - 13-10289 - 11th Circuit - court holds tax refund can be exempt as tenants by entireties, unpublished decision


Lump sum payment not dso
In re: Nachon-Torres, Case 11-36161-LMI - chapter 13 case, lump sum payment not DSO, marital settlement agreement, in equitable distribution section lump sum payment of $145,000 to achieve equitable distribution of marital estate, was intended as property settlement and not in nature of support

Obligation to pay second mortgage as DSO
In re: Mouhica 11-28929 - intent of parties as to second mortgage payments was for support for children, to enable them to continue to reside in marital home and attend area schools, even though in section of debts of parties instead of child support

Automatic Stay, Contempt
In re: DeSouza, 493 BR 669 (1st BAP 2013) - establish alimony not excepted from automatic stay, contempt mtn in violation of stay

Chapter 13 - 506, 1322, 1325

506, 1322(b)(2), 1325(b)(5)
In re: Gilbert, 11-28496 - issues of chapter 13 plan payment, application of regular payment and arrearage

1322(b)(2), 1325(b)(5)
In re: Elibo, 447 BR 359 - Kimball - no change interest rate and monthly payment

1322(b)(5) - no able to modify, just cure and maintain 
In re: Agustin, 10-49243-JKO - cannot use 506(a)(1) and 1322(b)(2) to bifurcate, change interest rate, discharge unsecured portion and use 1322(b)(5) to extend beyond life of plan. If 1322(b)(5) must cure and maintain payment, no change interest rate and monthly payment

1322(b)(2) and 1322(b)(5)
In re: Jerrils, 2010 Bankr. Lexis 219 - PGH - can both reduce per 506 and maintain over length of original mortgage

Chapter 7 dismissal, totality of circumstances, ability to pay
In In re Witcher,  No. 11-15883 (11th Cir. December 13, 2012) (click here for opinion), the issue before the Court was…
whether a court may take into account a debtor’s ability to pay his or her debts in determining whether "the totality of the circumstances . . . of the debtor’s financial situation demonstrates abuse" of chapter 7 of the Bankruptcy Code under 11 U.S.C. § 707(b)(3)(B)