Creditor’s motion to dismiss case because of debtor’s failure to provide creditor with a copy of her most recent federal income tax return was denied. The court concluded that the creditor had the ability to obtain the requested tax return by other means, including use of§ 521(g)(2), and that dismissal of case would be unduly harsh.
The court held that the use of negative equity financing by the parties in connection with the purchase of a new car and trade-in of an another vehicle did not destroy the purchase money nature of Nissan’s PMSI. The court found that there was a close nexus between the debtors’ acquisition of the new car and the entire secured obligation, which included the negative equity financing. Therefore, pursuant to the hanging paragraph contained in 11 U.S.C. § 1325(a), the debtors could not cram down the secured lender’s claim into a secured claim and an unsecured claim under 11 U.S.C. § 506.
Plaintiff, former wife of debtor, sought a judgment of nondischargeability against the debtor for failing to promptly notify her of a stock distribution he was to receive and which, under the terms of the parties' marital settlement agreement, was to be sold with the proceeds first to be used to pay certain debts and the balance to be divided by the parties. Instead of promptly notifying the plaintiff, the debtor placed the stock in a margin brokerage account in his sole name, which he used for his personal purposes. By the time the plaintiff finally received notice of the stock distribution, it had dramatically dropped in value (in excess of $442,000). The court found that the actions by the debtor constituted violations of 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(4) (for both defalcation by a fiduciary and embezzlement). The court declined to find that debtor’s conduct constituted a violation of 11 U.S.C. § 523(a)(6).
Kovacs entered into an offer in compromise (OIC) with the IRS resolving her income tax liabilities for the years 1990 to 1995. Kovacs subsequently defaulted in the terms of the IOC. The IRS terminated the OIC in 1999 and reinstated her liabilities for the tax years in question. On July 3, 2001, Kovacs filed a petition under Chapter 7 and listed the IRS as a creditor and obtained a discharge on October 10, 2001. After Kovacs received her discharge, the IRS mailed to her a series of notices of intent to levy on her assets with respect to these outstanding tax liabilities. The debtor filed an adversary proceeding. At the outset of the trial, the IRS conceded its mistake in determining the dischargeability of the tax liabilities for these years in question and acknowledged it had violated the discharge injunction under § 524 of the Bankruptcy Code. The court concluded that Kovacs was the prevailing party and that the IRS’ breach of § 524(a) was a proximate cause of her damages. However, the court also found that Kovacs Attorneys’ also were mistaken in the impact of her discharge on the tax liabilities, and, in addition, unreasonably protracted the court proceedings in the adversary proceeding. The court concluded that a fair portion of the total damages of $71,901.37 for which the IRS should be liable was $25,000 and stated that a cause of action for violation of the discharge injunction must not be utilized as a profit-making endeavor by the debtor’s attorneys. *NOTE - currently on appeal.
The court held that where a secured creditor files a proof of claim before confirmation, which is at odds with the debtor’s plan as to rate of interest, and the secured creditor fails to object to confirmation, the interest rate in the confirmed plan is controlling. The court also decided that the secured creditor was not denied due process. The argument raised by the secured creditor that established past practice in the Eastern District of Wisconsin required finding that the confirmed plan must yield to the proof of claim was rejected. The court stated that the established past practice was not as firmly entrenched as secured creditor suggested.
The court found that the refinancing lender did not perfect its security interest under Wis. Stat. § 342.19. The fact that the original certificate of title still had the lien of the fully paid original lender is no defense. The refinancing lender obtained a release from the original lender, and there was no assignment from the original lender to the refinancing lender.
The debtor filed a Chapter 13 case and subsequently converted that case to Chapter 7, wherein she received a discharge . More than two years but less than four years later, the debtor filed a new Chapter 13 case. The court ruled that the four-year waiting period contained within 11 U.S.C. § 1328(f)(1) was applicable to this fact pattern (rather than the two-year waiting period contained within 11 U.S.C. § 1328(f)(2)). Accordingly, the court found that the debtor was ineligible to receive a discharge in the present bankruptcy case because four years had not elapsed since the filing of her prior bankruptcy case.
Chapter 13 debtor-mortgagors sued defendant-mortgagees in seven adversary proceedings, which were consolidated, for violating 11 U.S.C. § 1322(e) by wrongfully receiving interest-on-interest on their claims. The debtor-mortgagors sought disgorgement of the wrongfully paid interest-on-interest pursuant to 11 U.S.C. §§ 502(j) and 1322(e), and claimed abuse of process under 11 U.S.C. § 105(a). On remand, the court determined that the adversary proceedings were not moot as to those debtors who received discharges. The debtors conceded that § 105 did not create a private right of action, and the court dismissed that count. The court found that none of the equitable defenses of judicial estoppel, waiver, or laches raised by the defendants warranted dismissal. However, the court held that the confirmed plans proposed by the debtors are entitled to res judicata effect pursuant to § 1327(a). The court also held that § 1322(e) is a discretionary provision which did not render the orders confirming the plans in each of the adversary proceedings nugatory. As a result, the court dismissed all of the adversary proceedings. Aff'd on appeal.
The trustee successfully avoided the defendant’s mortgage and preserved it for the benefit of the estate pursuant to 11 U.S.C. §§ 547 and 551. The trustee then brought a second action to recover a money judgment on the avoided transfer pursuant to 11 U.S.C. § 550. The court found that even though res judicata appeared to bar the second action, the "statutory scheme" exception to res judicata was applicable and allowed the trustee to bring a separate action to recover the value of the avoided transfer under 11 U.S.C. § 550. Consequently, the court found that the second action was properly brought and denied the defendant’s motion to dismiss or, in the alternative, for judgment on the pleadings.
Chapter 13 debtor-mortgagors sued defendant-mortgagees for violating 11 U.S.C. § 1322(e) by wrongfully receiving interest-on-interest on their claims. The debtor-mortgagors sought disgorgement of the wrongfully paid interest-on-interest pursuant to 11 U.S.C. §§ 502(j) and 1322(e), and claimed abuse of process under 11 U.S.C. § 105(a). The court found that plaintiffs had standing to pursue this action on behalf of the Chapter 13 estate pursuant to Bankruptcy Rule 6009. Nonetheless, the court dismissed these actions, finding that the actions were procedurally deficient. The court reasoned that the parties were required to invoke Bankruptcy Rule 3008 and proceed by means of a motion to reconsider and only if then successful seek further relief. *Note- reversed and remanded.