Month: March 2017

Proceeding with Divorce When in Bankruptcy

In re Exum; Case No. 08-10079-RGM; February 21st, 2008 Debtor’s spouse filed a Motion for Relief from the Automatic Stay to Proceed with divorce proceedings. Court noted that the automatic stay, does not operate as a stay of the commencement or continuation of a civil action “(ii) for the establishment or modification of an order for domestic support or obligations” or “(iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property of the estate.” Bankruptcy Code §362(b)(2)(A). The court does have a problem, however, with allowing the equitable distribution

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Joint Owner’s Agreement to Settle Home and Approval by Court

In re Pertis; Case No. 04-14471-RGM; March 6th, 2008 This case was before Judge Mayer on a motion to approve a settlement between the debtor and herself relating to the division of the proceeds of sale of their former marital home. The non-debtor party, Ms. Herrick, asserts that the debtors failure to make post-petition payments should be taken into account in the distribution of the proceeds of the sale. While the debtor’s attorney agreed to this, the judge had a problem with the distribution of the proceeds. In Virginia, when adjusting accounts between joint tenants, the party who makes the

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Motion to Extend Stay and Third Party Injunction

In re Shea; Case No. 08-10350-RGM; February 27th, 2008 The debtor in this case previously had a case dismissed within the last year. Because of this, according to Bankruptcy Code §362(c)(3)(B), a hearing to extend the automatic stay beyond this 30 day period must be “completed before the expiration of the 30-day period.” That court rules that because the motion for an expedited hearing to extend the stay was not filed until one day after the 30-day period, it is futile to set the hearing and therefore the motion was denied. Interestingly, the court also commented on the purported reason

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Right to Prevent Modification of Stay Limited

In re Aime; Case No. 07-12388-SSM; February 28th, 2008 This matter was before the court on the motion of the creditor to enforce a security interest in a motor vehicle and the debtor’s motion to amend the previously entered order conditioning the automatic stay. The Debtor was in default of her payments on the vehicle by 10 months, but needed the vehicle to get to work and wanted to enter into an agreement for additional time to make payments and otherwise catch up on her payments. The court discusses the automatic stay and points out that “if the debtor is

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Modifying a Chapter 13 Plan

In Murphy, Jr. v. O’Donnell v. Goalski, 474 F.3d 143 (4th Cir. 2007), the Fourth Circuit determined when and how a confirmed Chapter 13 plan may be modified. There were two fact patterns at issue in this matter and the Court started out by setting forth the principal that a confirmed Chapter 13 plan is “a new and binding contract, sanctioned by the court, between the debtors and their pre-confirmation creditors,” id., citing Matter of Penrod, 169 B.R. 910, 916 (Bankr.N.D.Ind. 1994). The Court continued that, “like other contracts, a confirmed Chapter 13 plan is subject to modification.” Murphy, 474

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Avoiding Security Interests Without Adversary Proceeding. . . Why do I Need an Attorney?

In 1995, the Fourth Circuit decided Cen-Pen Corp. v. Hansen, 58 F.3d 89 (4th Cir. 1995), which decided the notice requirements within a Chapter 13 case to alter the security interests of a secured creditor. The facts around how the security interest arose were a little convoluted, but suffice it to say, the pre-bankruptcy security status of the lien was not at issue. However, the Hanson’s filed a Chapter 13 plan that treated Cen-Pen as an unsecured creditor. The plan further required creditors to submit proofs of claim and objections within a specified time period and provided that the plan

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Modified security interests, how much notice required?

In 1993, the Fourth Circuit decided Piedmont Trust Bank v. Linkous, 990 F.2d 160 (4th Cir. 1993), which addressed the notice required to a secured creditor when confirmation of a bankruptcy plan requires a valuation under 11 USC 506(a) of the bankruptcy code. In this case, Piedmont owned a security interest in a mobile home and a vehicle and was due balances of roughly $18,000.00 on the mobile home and $4,000.00 on the vehicle. The Chapter 13 plan proposed by Linkous treated only $6,000 of the mobile home loan as secured and $1,000.00 of the car loan as secured. The

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Fiduciary Obligation of Debtor’s Business Nondischargeable as to Debtor

In re Hernandez; Case No. 07-11413-RGM; March 3rd, 2008 The simple non-delivery of funds does not necessarily equate to embezzlement, larceny, or a willful and malicious injury. However, where there is an applicable trust agreement with a corporate entity, the obligations of which are guaranteed by the debtor who is also an officer and person in control of the corporation’s operations in which the defalcation occurred, the debtor’s obligation under the guarantee agreement is not dischargeable under 11 USC § 523(a)(4).

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Reaffirmation Agreement Failure and Creditor Identity

In re Rodriguez; Case No. 07-13577-RGM; March 3rd, 2008 This matter was before the court on a proposed reaffirmation agreement under §524 that was not fully completed.  Therefore the court determined that the reaffirmation was not effective.  This case also pointed to an interesting issue of the juridical person who is the creditor.  The court noted that the reaffirmation identifies “Branch Banking & Trust Company or one of its affiliates (hereafter collectively BB&T)” and then the reaffirmation was signed by Pretice Faircloth, who identified himself as “Asst. Vice President” under the name “BB&T Bankruptcy,” which the court notes does not

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Informal Proof of Claim From Claim Filed in Debtors Parent Company’s Bankruptcy

In re Rowe Furniture; Case No. 06-11143-SSM; March 4th, 2008 This matter was before the court on the motion by Riverside Claims, LLC (“Riverside”) to allow a total of thirteen claims it filed after the claims bar date as amendments of claims that were timely-filed in the related case of the debtor’s parent holding company.  Riverside had filed claims in the parent companies case, but after the claims bar date for this case had run, and on the last day to object to the claims in the parent companies case, the parent company objected to the claims on the grounds

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