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Bankruptcy Judge Has Broad Discretion to Determine What Constitutes “Cause” To Allow State Law Issues To Be Resolved in State Court Action

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In re Rizzo, 603 B.R. 550 (Bankr. D. SC 2019)(Waites, J.)

The Guardian for an Incapacitated Person, with whom the Debtor shared a joint bank account with, filed suit in state court against the Debtor in state court seeking recover of $250,000 the Debtor withdrew from that bank account. The Debtor filed a Chapter 13 bankruptcy and the Guardian filed a Motion for Relief from the Automatic Stay to proceed in state court.

The Bankruptcy Court held that the Debtor’s plan did not depend on the use of disputed funds for its feasibility and that the estate could be further protected by a requirement that the Movant’s seek enforcement of any judgment through the bankruptcy court.

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