Plaintiff represented the defendant-debtor’s ex-wife throughout various state court proceedings in connection with a divorce, and post-divorce custody disputes. During such proceedings, defendant-debtor was sanctioned and ordered to pay his ex-wife’s attorney fees directly to the plaintiff. The court found such debts nondischargeable under 11 U.S.C. § 523(a)(5), finding the debts to be a domestic support obligation within BAPCPA’s expanded definition. Further, the court found that even if the debt was not a domestic support obligation, it was nonetheless nondischargeable under 11 U.S.C. § 523(a)(15), as a debt incurred in the course of a divorce. 

Creditor objected to debtor-Christine Wilson’s claimed homestead exemption based on an “Agreement to Keep Property Separate” entered into between debtors John and Christine before their marriage. The court found that the subsequent marriage of the debtors did not terminate the agreement and therefore the homestead was the sole property of John. The court disallowed debtor-Christine’s claimed exemption

Chapter 7 Trustee and creditor objected to the debtor-John Wilson’s claim of exemption to a life insurance policy insuring the life of his ex-wife. The court sustained both objections and disallowed the exemption finding that debtor’s payment of $1000/mo in maintenance to ex-wife did not render her a dependent of the debtor within the meaning of Wis. Stats. § 815.18(2)(d). Further, the court found that the debtor was not a member of the class intended to be protected by Wis. Stats. § 815.18(3)(f)(2). 

Debtor filed a chapter 13 case in which she was ineligible to receive a discharge pursuant to § 1328(f), because the case was filed less than four years after she filed a chapter 7 case in which she received a discharge. Debtor commenced an adversary proceeding seeking to “strip off” her second mortgage because there was no equity for the lien to attach to. The creditor filed a motion to dismiss the adversary proceeding arguing that a discharge is a requirement for lien avoidance under § 506(d). An objection to confirmation of plan was filed on the same grounds. The court held that to allow a debtor in a no-discharge chapter 13 to avoid a junior lien would run afoul of § 1325(a)(5)(B)(i)(I)(aa) which provides that the holder of a secured claim shall retain such lien until the earlier of the payment of the underlying debt or discharge. The court further stated that permitting such action would be contrary to both the Congressional intent in enacting BAPCPA and the ruling of the U.S. Supreme Court in Dewsnup v. Timm. The court granted the motion to dismiss adversary proceeding and sustained the objection to confirmation of plan without prejudice to the right of the debtor to file an amended plan.

Debtors filed a chapter 13 bankruptcy case within 910 days of purchasing a vehicle. Their chapter 13 plan, which provided for full payment of the vehicle claim pursuant to the “hanging paragraph” contained in 11 U.S.C. § 1325(a)(9), was confirmed, but the case was dismissed nine days later for failure to make plan payments. Four days after the creditor took judgment in state court, the debtors refiled a second chapter 13 case which was now outside of the 910-day period. Accordingly, debtors plan proposed to “cram down” the vehicle claim. Creditor objected to confirmation based on bad faith and the theory of equitable tolling. The court rejected the bad faith argument finding that refiling outside of the 910-day period alone is not enough to establish bad faith. However, the court sustained the objection to confirmation based on the theory of equitable tolling and the U.S. Supreme Court case In re Young, 535 U.S. 43 which held that a “look-back period” is subject to equitable tolling in cases where a creditor is disabled from protecting its rights. * NOTE - Currently on appeal.

Debtors filed a chapter 13 plan which separately classified their unsecured student loan debts. Debtors contended that under 11 U.S.C. § 1322(b)(5), they could maintain contractual payments (even if such payment would result in a substantially higher dividend to the student loan creditors than to other unsecured creditors) because it is a long-term debt that will continue after the final plan payment is due. The chapter 13 trustee objected to the plan claiming that such separate classification constitutes “unfair discrimination” under 11 U.S.C. § 1322(b)(1). The court held that 11 U.S.C. §§ 1322(b)(5) and 1322(b)(1) must be read in conjunction with one another and that, while such separate classification may be allowed in certain instances, based on the facts and circumstances in this case, the plan did unfairly discriminate against other unsecured creditors. The court further held, that pursuant to 11 U.S.C. § 1322(b)(10), the plan could not provide for payment of interest on the unsecured student loan debts when all claims were not being paid in full. The trustee’s objection to confirmation was sustained.

Chapter 7 trustee initiated an adversary proceeding seeking a determination that debtor’s interest in a trust was “property of the estate” and for turnover of the trust corpus for administration as an asset of the estate. The spendthrift provision restricted only involuntary transfer of debtor’s interest, not voluntary transfer of debtor’s interest, and therefore, the debtor had an absolute right to immediate payment of the principal, without restrictions. Accordingly, the court held that the trust did not contain a valid spendthrift clause under Arizona law, and, debtor’s interest in such trust was property of the bankruptcy estate. The adversary proceeding was dismissed and the trustee of the trust was ordered to turn over debtor’s beneficial interest in the trust corpus to the chapter 7 trustee for administration.

Pleguar entered into an asset purchase agreement with debtors’ LLC to be paid over an 8-year period. Under the terms of the agreement, intangibles, rather than physical assets, comprised approximately 96% of the value. 6-years into the agreement, the debtors defaulted. When Pleguar sued both the LLC and the debtors personally in state court, the LLC ceased business operations, but in an effort to find re-employment for its employees,  transferred some of its intangibles to JHB, a competitor of Pleguar. The debtors then filed a joint personal voluntary petition for bankruptcy under Chapter 7. Pleguar instituted this adversary proceeding for denial of debtors’ discharge. The court held that debtors did not act with actual fraudulent intent in transferring to competitor LLC’s intangibles, precluding denial of discharge on grounds that debtors fraudulently transferred or concealed property. The court also held that omission from debtors’ bankruptcy schedules of such transfer did not warrant denial of discharge on grounds that debtors made false oath in relation to their bankruptcy case. Finally, the court held that denial of discharge was not warranted on grounds that debtor “gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act.” The adversary proceeding was dismissed, and the debtors were granted a discharge.

The UST objected to the debtors' discharge based on § 727(a)(4)A) (false oath), § 727(a)(5) (failure to explain loss of assets), and § 727(a)(2) (fraudulent transfer of property within one year of the filing of the bankruptcy). The court concluded that the debtors were the victims of a scam, orchestrated by a clever con artist, and lacked the requisite intent to defraud. The court also found that the debtors transfer of non-exempt funds into exempt funds, totaling approximately $9,900, shortly before filing bankruptcy, was a proper use of pre-petition bankruptcy planning under the particular facts and circumstances of this case. The adversary proceeding was dismissed, and the debtors were granted a discharge.

Debtors commenced an adversary proceeding seeking a determination that the Bank’s mortgage was void because the debtor-husband did not sign the mortgage on a homestead that was collateral for a business loan. Wis. Stats. § 706.02 states that both married persons must join in a conveyance. The bank responded that the mortgage it held was valid due to the “substitute requirements” contained in the statute, which allow extrinsic documents to prove the validity of a mortgage so long as there is intent on the part of the non-signing spouse to mortgage his interest in the property. The court found that no such intent was present. The court also rejected the bank’s argument that it would be inequitable to invalidate the mortgage, noting that the bank is a sophisticated entity and has the obligation to check the requirements of Wisconsin law.