The debtors operated a business through a limited liability company, which borrowed money from the defendants. The note was not personally guaranteed by either of the debtors. After the debtors filed bankruptcy and received a bankruptcy discharge, the defendants learned of the debtors’ bankruptcy. They subsequently filed a lawsuit in state court, which was ultimately voluntarily dismissed as to the debtors. They also made numerous attempts to collect the debt through both texts and voicemails directed at the debtors. The debtors then filed an adversary proceeding against the defendants for willful violation of the discharge injunction. After trial, the court dismissed the adversary proceeding because the demands for payment did not involve a debt due by the debtors personally to the defendants, so such debt was not a debt which was discharged in the debtors’ personal bankruptcy. The court stated that the debtors may have a claim for harassment, but that such a claim does not belong in the bankruptcy court.
Order imposing $5,000 sanction on Attorney Emory H. Booker, III for violating the Bankruptcy Code and Rules through his provision of unbundled bankruptcy services.
The UST objected to the debtor’s discharge based on § 727(a)(4)(A). The court found that the debtor’s failure to disclose a $50,000 inheritance, large IRA withdraws, ownership of 5 guns, and a transfer of $66,000 to an insider within the 2 years prior to filing constituted a false oath and denied the debtor’s discharge.
In debtors' adversary proceeding to avoid the transfer of their real properties to the City of Milwaukee via tax lien foreclosure, the Court held that the City's "strict foreclosure" process under Wis. Stat. section 75.521, which did not involve any kind of sale, was not sufficient to establish the "reasonably equivalent value" element of a section 548 fraudulent conveyance action.
Moss v. Sallie Mae, Inc., 470 B.R. 505(April 2012) -- Judge Kelley
Student loan creditor's policy conditioning debtor's new post-petition student loan on cure of default on pre-petition student loan did not violate automatic stay or anti-discrimination provisions of 11 U.S.C. § 525(c).
Court denied creditor's motion to compel the standing Chapter 13 trustee to pay the amounts listed in the creditor's supplemental notice to the proof of claim, which had been filed pursuant to the requirements of Fed. R. Bankr. P. 3002.1. The Court held that the Form B10S notice of post-petition fees, costs and expenses did not constitute a "supplemental" or "amended" proof of claim, and was simply a notice designed to make debtors aware that creditors claimed post-petition fees were owed.
US Trustee moved to dismiss chapter 7 debtors' case pursuant to section 707(b), arguing the debtors' expenses, including tuition for parochial school, were excessive. Debtors countered that section 707(b)(2)(A)(ii)(IV), which limits deductions for education expenses on the means test, was unconstitutional because it suppressed their right to practice religion. The court found section 707(b)(2)(A)(ii)(IV) was not unconstitutional and granted the motion to dismiss.
Bankrupcty court found no justification for imposing an equitable lien in favor of the creditor on the debtors' rental property, when the reason that the creditor did not have a lien on that property was because it had erroneously applied the loan proceeds to a different property. The district court adopted the findings and conclusions in their entirety.
In re Archdiocese of Milwaukee, 470 B.R. 495(February 2012) -- Judge Kelley
Negligence claims against the Archdiocese were derivative of the original abuse claims and shared the same statute of limitations; a question of fact for trial remained on when the fraud claims were or should have been discovered.
Claimant who settled and released his claims against the Archdiocese prior to the petition was bound by the release, and failed to prove the required elements for fraudulent inducement into settlement.