United States Trustee's motion pursuant to Fed. R. Civ. P. 60(a) for correction of error in order denying debtor's discharge was granted. The order improperly denying the discharge under sec. 727(a)(8), instead of section 727(a)(2), was a clerical error, not a legal error.
Chapter 13 debtors with no personal liability on accelerated loan on principal residence were not allowed to strip the mortgage down to the value of the real estate.
Court's oral ruling granting the United States Trustee's motion to dismiss under section 707(b)(3)(B) on the totality of the circumstances.
Summary judgment pursuant to doctrine of issue preclusion was not warranted because state court findings did not meet nondischargeability standards set forth in sections 523(a)(2)(A) and (a)(4).
In Chapter 13 case, junior lienholder’s secured status is not affected by the senior lienholder’s failure to file a claim within 90 days of the § 341 meeting of creditors.
Court abstained from hearing third party complaint for indemnification after plaintiff and defendant stipulated for dismissal of first party cause of action.
Underlying theft by contractor judgment was nondischargeable under sec. 523(a)(4).
In a Chapter 7 case involving married, jointly-filing debtors, the United States Trustee filed a motion to dismiss the debtor/husband under § 707(a), alleging that the fact that he was not eligible for a Chapter 7 discharge constituted "cause" for dismissal, and in the alternative, that he had filed his petition in bad faith, for the sole purpose of allowing the debtors to exempt assets that the wife, filing alone, would not have been able to exempt. The Court denied the motion to dismiss, finding that ineligibility for a discharge did not constitute "cause" under § 707(a). The Court found that bad faith was not a basis for dismissal under § 707(a), given that Congress explicitly had provided for dismissal due to bad faith in § 707(b). The Court also found insufficient evidence to conclude that the debtor/husband had filed for the purpose of allowing the wife to exempt otherwise non-exempt assets
Oral ruling sustaining Chapter 13 trustee's objection to confirmation of the plan. The Court held that debtors who would finish repaying a 401k loan before the expiration of the plan commitment period could not use the funds they had been devoting to repaying the loan to increase the amount they were contributing to the 401k plan.
Debtor who had received a Chapter 7 discharge in a case commenced within the previous 8 years filed a Chapter 13. She then filed an adversary complaint, proposing to strip off the wholly unsecured, junior mortgage lien. When the defendant did not file an answer, the plaintiff/debtor filed a motion for default judgment. On October 26, 2010, the Court denied the motion for default judgment and dismissed the adversary complaint, holding that a debtor who was not eligible for a Chapter 13 discharge could not use the Chapter 13 case to strip off the wholly unsecured, junior mortgage lien. The debtor appealed, and on April 19, 2011, Judge Randa reversed the bankruptcy court's legal conclusion. In re Sandra Lee Fair, 10-C-1128. Judge Randa held that there was nothing in the Bankruptcy Code which tied modification of an unsecured lien to obtaining a Chapter 13 discharge. He noted, however, that bankruptcy courts had an obligation to determine whether debtors filed their Chapter 13 petitions in good faith, and that filing a Chapter 13 case "solely for the purpose of the lien avoidance" suggested manipulation of the Bankruptcy Code and constituted evidence of bad faith. He thus remanded the case to the bankruptcy court for a determination regarding whether the debtor filed her Chapter 13 case in good faith. On July 6, 2011, the bankruptcy court issued an oral ruling, finding that under the specific factual circumstances in this debtor's case, she had filed her Chapter 13 case in good faith. The Court found that she had filed the case for the purpose of paying the arrearage on her first mortgage and saving her home from foreclosure, and not just for the purpose of stripping off the wholly unsecured, junior mortgage lien.