Blog

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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