Debtor who obtained homestead property in violation of a due-on-sale clause does not impermissibly modify creditor's rights in violation of 11 U.S.C. section 1322(b)(2) in proposing to pay the arrearages on the mortgage debt through a Chapter 13 plan.
The plaintiffs in theft by contractor cause of action were entitled to judgment of nondischargeability under sec. 523(a)(4). The court found the services performed for the debtor's construction company fell within the provisions of both the old and new versions of Wis. Stat. sec. 779.02(5).
The chapter 13 trustee opposed confirmation of the debtor's plan because she included non-escrow homeowners' insurance and real estate taxes on Line 47 of Form 22C. The court overruled the trustee's objection as it related to the deduction for insurance and property taxes because, even though those expenses were not paid into an escrow account, such payments were required by the contract that created the security interest.
Creditor opposed the chapter 11 debtors' proposed disclosure statement on the grounds that it did not adequately describe the cross-collateralization of the debtors' obligations to it. The court determined the debtors' original mortgage on their homestead did not secure the subsequent business notes.
Debtor who was currently incarcerated in a prison that was experiencing difficulties with its telephone service moved for at least a temporary waiver of the prepetition credit counseling requirement. Prisoner's motion for exemption from credit counseling was denied by the court because no "exigent circumstances" existed, of a kind entitling the debtor to a temporary waiver of the requirement. Furthermore, the debtor's incarceration did not rise to the level of "disability," of a kind warranting a permanent waiver of the credit counseling requirement.
When the UST discovered at the 341 meeting of creditors that debtor had failed to list some jewelry on his schedules, he commenced an adversary proceeding, seeking denial of debtor’s discharge under §§ 727(a)(40(A) and 727(a)(2) of the Bankruptcy Code. The court concluded that in failing to list substantial assets on his schedules, the debtor did intend to actually defraud the trustee and his creditors, or at least acted with reckless disregard for the truth, and should be denied a discharge. The fact that he later amended his schedules to include the omitted assets did not expunge the falsity of his prior oath. The court also rejected debtor’s attempt to shift blame onto his bankruptcy attorney, declaring that debtor has an independent responsibility to verify the information given to his counsel. The court also sustained the chapter 7 trustee’s objection to debtor’s claims of exemption.
The Court concluded that the totality of the debtors' circumstances demonstrated an abuse of the provisions of Chapter 7, and therefore granted the United States Trustee's motion to dismiss if the debtors did not convert within 30 days. The Court based its decision on the fact that the debtors appeared to have funds and assets available that gave them some ability to pay their creditors. The Court noted, however, that the fact that the debtors were contributing to a 401k plan and were repaying a 401k loan did not, by themselves, justify dismissal of the case, as those payments would be deductible in a Chapter 13 context. The Court also concluded that the United States Trustee had failed to present any evidence regarding how long the debtors would have to make the 401k loan repayments, and whether, at some point during the life of a Chapter 13 plan, those funds would become available to pay unsecured creditors.