Carelessness or Inadvertence Upsets Judicial Estoppel
estoppel does not bar debtor’s disability action because
failure to schedule in Chapter 13 case was error by attorney of which debtor was not
aware and exemption for disability benefits under state law negates motive to benefit
from concealment. Javery v. Lucent Technologies, Inc. Long Term Disability Plan
for Mgmt. or LBA Emps., 741 F.3d 686 (6th Cir. Feb. 3, 2014) (Cole, Clay, Bertelsman).
What Happens When Courts Don’t Understand Chapter 13
court did not clearly err in finding lack of good faith under
§ 1325(a)(3) and (a)(7) when disabled debtor with limited income from Social Security
and no nonexempt assets proposed “attorney-fee-centric” plan that would require 17 months to
pay attorney fees; that 36-month plan would pay all allowed unsecured claims in full did not
change outcome because “abysmal failure rate” of Chapter 13 cases made it unlikely
that debtor would complete plan. Brown v. Gore (In re Brown),
No. 13-10260, 2014 WL 563601 (11th Cir. Feb. 14, 2014) (Carnes, Hull, Cox).
Saturday, January 25, 2014
515 New Cases Added to the Updater.
Standing Trustee Acts Under Officer of the United States
Standing Chapter 13 Trustee
is a “person acting under” an Officer of the
United States—the United States Trustee within the Department of Justice—for purposes of removing a
discrimination action to federal court under 28 U.S.C. § 1442(a)(1); trustee had “colorable
federal defense” that employment action was performance of official duties that included involvement
of United States Trustee and of a United States bankruptcy judge after peer review by
National Association of Chapter 13 Trustees. Bell v. Thornburg, No. 13-30155,
2013 WL 6850026 (5th Cir. Dec. 30, 2013) (Stewart, King, Prado).
No Benefit to Estate? No Derivative Standing
derivative standing is possible in a Chapter 13 case, debtor does not have derivative standing
to avoid prepetition foreclosure sale when trustee elected not to pursue avoidance because there was no
equity in the property to benefit creditors. Weyandt v. Federal Home Loan Mortgage Corp.
(In re Weyandt), No. 11-4565, 2013 WL 6052130 (3d Cir. Nov. 18, 2013) (unpublished)
(Chagares, Vanaskie, Shwartz).
Lien Stripping Limitation
In a Chapter 13 case filed by only one spouse, plan cannot strip off valueless junior lien on
residence owned as tenancy by the entireties. Alvarez v. HSBC Bank USA, N.A.
(In re Alvarez), No. 12-1156, 2013 WL 5737704 (4th Cir. Oct. 23, 2013) (Gregory, Davis, Keenan).
Ninth Circuit Finishes Off Kagenveama
A majority of the Ninth
Circuit sitting en banc has overruled the surviving part of Maney v. Kagenveama (In re Kagenveama), 521 F.3d 868
(9th Cir. June 23, 2008) (Siler, Bea, Pregerson): the applicable commitment period in § 1325(b) is temporal;
even a debtor with no projected disposable income must propose a plan that is at least as long as the 3 or 5 year
applicable commitment period. Danielson v. Flores (In re Flores), No. 11-55452, 2013 WL 4566428 (9th Cir.
Aug. 29, 2013) (en banc).
Significant Proposed Rules and Forms Changes: Speak Up Now
The Judicial Conference Advisory Committee on Bankruptcy Rules
has just published important proposed amendments to the bankruptcy rules and forms. Comments are due by February 15, 2014. These amendments
dramatically change the content and timing of proofs of claims and include a new form for the Chapter 13 Plan. The proposed amendments and
committee reports are posted at www.uscourts.gov/rulesandpolicies/rules.aspx.
The Chapter 13 Plan form is tied to rule changes that would not become effective until December 1, 2015. Most of the other proposed form changes
could become effective December 1, 2014. The Advisory Committee through its chair, Gene Wedoff, has reached out robustly to the entire bankruptcy community
for comments and suggestions about these important changes. Comments may be submitted
electronically at www.uscourts.gov/RulesAndPolicies/rules/proposed-amendments.aspx.
Friday, August 2, 2013
221 New Cases Added to the Updater.
FIRST CIRCUIT BAP:
WITHHOLDING ORDER IS PREDICATE TO STAY EXCEPTION IN § 362(b)(2)(C)
court contempt proceeding and incarceration for failure to pay alimony violated automatic stay when
state court order required debtor to pay alimony from postpetition income but there was no
garnishment or similar withholding order in effect at the Chapter 13 petition.
In re DeSouza, No. 11-40315-MSH, 2013 WL 2991034 (B.A.P. 1st Cir. June 14, 2013) (
Deasy, Kornreich, Tester).
Seventh Joins Tenth: Dewsnup Applies in Chapter 13 Cases
Woolsey v. Citibank, N.A. (In re Woolsey), 696 F.3d 1266 (10th Cir. Sept. 4, 2012)
(Gorsuch, Holmes, Matheson), Dewsnup applies in Chapter 13 cases: § 506(d) does
not void unsecured portion of undersecured tax lien. Ryan v. United States (In re Ryan),
No. 12-3398, 2013 WL 3380131 (7th Cir. July 8, 2013) (Ripple, Rovner, Williams).
Friday, July 12, 2013
189 New Cases Added to the Updater.
Second Circuit: Car Lender Willfully Violated Stay by Refusing Turnover of Repossessed Car
lender willfully violated stay by refusing to return car lawfully repossessed before petition;
debtor’s equitable interest under state law became property of Chapter 13 estate and lender
exercised control over that property by demanding adequate protection as condition of
turnover. Weber v. SEFCU (In re Weber), No. 12-1632-bk, 2013 WL 1891371 (2d Cir. May 8, 2013)
(Cabranes, Raggi, Carney).
First Circuit BAP: Untimely Claim Filed by Debtor is Disallowed and Dischargeable
Untimely priority claim filed
by debtor on behalf of taxing authority is disallowed on trustee’s objection and will be discharged without
payment upon completion of plan. Municipality of Carolina v. Gonzalez (In re Gonzalez),
BAP No. PR 12-063, 2013 WL 1629235 (B.A.P. 1st Cir. Apr. 12, 2013) (Haines, Feeney, Hoffman).
Third Circuit: Fesq is Alive and Well Notwithstanding Espinosa
In re Fesq,
153 F.3d 113 (3d Cir. Aug. 18, 1998) (Stapleton, Alito, Shadur), was not overruled by United Student Aid
Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010); bank cannot
challenge confirmation order by Rule 60 motion on any ground except fraud. In re Rodriguez,
No. 12-2146, 2013 WL 1716110 (3d Cir. Apr. 22, 2013) (Jordan, Aldisert, Nygaard) (unpublished).
First Circuit: Claim Disallowance Can Bar Collection of Nondischargeable Debt
of student loan debt “in the amount of $0.00” based on unrebutted evidence that loans were paid in full
before petition precludes post-bankruptcy collection of student loan debt without regard to nondischargeability.
Hann v. Educational Credit Mgmt. Corp. (In re Hann), 711 F.3d 235 (1st Cir. Mar. 29, 2013)
(Torruella, Stahl, Thompson).
Supremes Say "Defalcation" Requires Intentional Wrong
determine dischargeability under § 523(a)(4), defalcation in a fiduciary capacity requires an
intentional wrong: either “conduct that the fiduciary knows is improper . . . [or] reckless conduct of
the kind that the criminal law often treats as the equivalent." Bullock v. BankChampaign, N.A.,
No. 11-1518, 2013 WL 1942393, at *5 (May 13, 2013).
Fourth Circuit: Lien Strip Okay in No-Discharge Cases
did not upset lien-stripping of wholly unsecured mortgage in no-discharge Chapter 20 case; good faith test
provides sufficient protection from abuse. Branigan v. Davis (In re Davis), No. 12-1184,
2013 WL 1926407 (4th Cir. May 10, 2013) (Diaz, Niemeyer; Keenan dissenting).
Latest Case Updates &
Revisions to Chapter 13 Bankruptcy, 4th Ed.
Saturday, January 25, 2014:
515 New Cases Added to the Updater.
Friday, August 2, 2013:
221 New Cases Added to the Updater.
Friday, July 12, 2013:
189 New Cases Added to the Updater.
Friday, April 26, 2013:
353 New Cases Added to the Updater.
Saturday, January 26, 2013:
372 New Cases Added to the Updater.
Wednesday, November 28, 2012:
388 New Cases Added to the Updater.
Wednesday, September 12, 2012:
178 New Cases Added to the Updater.
Tuesday, July 10, 2012:
174 New Cases Added to the Updater.
Thursday, July 5, 2012:
159 New Cases Added to the Updater.
Thursday, June 21, 2012:
112 New Cases Added to the Updater.
Wednesday, June 13, 2012:
207 New Cases Added to the Updater.
Latest Editorials & Bulletins
See all Ch13online
Careful What You Wish For:
State Court Judgment Gives Debtor
Standing to Avoid Preference
You may remember the decision of the Bankruptcy Appellate Panel for the Sixth Circuit
in Dickson v. Countrywide Home Loans (In re Dickson), 427 B.R. 399
(B.A.P. 6th Cir. Apr. 12, 2010) (Fulton, McIvor, Shea-Stonum). The interesting
holding by the BAP in Dickson was that a Chapter 13 debtor had “derivative standing”
to pursue the preferential perfection of a lien on a manufactured home when the trustee
declined to bring the action. On further appeal, the United States Court of Appeals for the
Sixth Circuit has affirmed the BAP, but the Circuit found a different and equally
interesting logic: the Chapter 13 debtor has direct standing to avoid the
preferential perfection of a lien when the creditor took a default judgment during the
preference period. Dickson v. Countrywide Home Loans (In re Dickson), No. 10-5580,
2011 WL 3768684 (6th Cir. Aug. 26, 2011) (Norris, Gibbons, Griffin).
RUN AMOK IN EIGHTH CIRCUIT
Of course, it’s not uncommon for strange facts to make strange law.
But the outcome found by the United States Court of Appeals for
the Eighth Circuit in Burnett v. Burnett (In re Burnett), 646
F.3d 575 (8th Cir. July 20, 2011) (Smith, Beam, Benton), may be the
product of both strange law and strange facts with respect to the treatment
of domestic support obligations (DSOs) in Chapter 13 cases after BAPCPA.
You know how quickly the Ch13 world can change, and how simply keeping up simply isn't enough. That's why we've converted and expanded Chapter 13 Bankruptcy, 4th Ed. by Keith M. Lundin and William H. Brown into an online service that we can update continuously. The top Treatise on Ch13 by two of the most respected authors in the field now changes as fast as Ch13.
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