This decision explains Judge Halfenger’s fee-waiver methodology and why he denied this debtor’s application to waive the chapter 7 filing fee. When considering applications to waive the filing fee, Judge Halfenger begins with the statutory fee-waiver requirements: (1) whether the debtor’s income falls below 150% of the applicable official income poverty line, and (2) whether the debtor is unable to pay the filing fee in installments. If the debtor’s submission establishes that she meets these criteria, the grant of a fee waiver becomes a matter of judicial discretion. In exercising this discretion, Judge Halfenger considers whether there is reason to believe that the debtor faces special circumstances such that a bankruptcy discharge will afford her benefits beyond relief from typical collection efforts. In this case, although the debtor’s income was below 150% of the income official poverty line, she did not show that she was unable to pay the filing fee in installments or that a discharge would provide unusual benefits.
The Court dismissed the debtor’s case after he failed to pay the first filing fee installment. One day later, the debtor filed a motion to vacate the order of dismissal, reinstate the case, and extend the time to pay the filing fee. The motion, which was supported only by a hand-written letter of the debtor, asserted that the debtor could not timely pay the filing fee because he could not recover previously garnished funds and other bills were due. The Court denied the motion on two independently sufficient grounds: (1) the debtor failed to pay the $306 filing fee with the motion, a condition of vacatur imposed by the dismissal order, and (2) the reasons provided did not explain how the missed payment was the result of excusable neglect, as required by Rules 9024 and 9006(b)(1).
Although the chapter 7 debtor was assigned payment of joint credit card obligations under the parties' Marital Settlement Agreement, after the debtor stopped making payments and the default was reported negatively on her former spouse's credit report, the former spouse made the credit card payments. The court rejected the debtor's argument that, because the creditor had not sued or threated legal action against her former spouse, she was not liable to reimburse her former spouse for his "voluntary" payments. The debtor's responsibility to hold her former spouse harmless became a nondischargeable obligation under sec. 523(a)(15) when the judgment incorporating the MSA was granted.
Material facts in dispute precluded summary judgment in debtor's adversary proceeding to recover transfer of non-homestead property in real estate tax foreclosure allegedly done in violation of the automatic stay and for less than reasonably equivalent value.
Commerce State Bank initiated a state-court, pre-petition garnishment action against the debtor’s lawyers to collect on its judgment against the debtor. Before the debtor commenced this bankruptcy case, Commerce filed a motion for default judgment against the lawyers, alleging that they had failed to timely answer the garnishment complaint. Before the state court could conduct a scheduled hearing on Commerce’s default judgment motion, the debtor commenced this case and requested that Commerce cancel the motion hearing. After Commerce refused that request, the debtor moved for sanctions claiming that Commerce’s refusal violated the automatic stay. This Court denied the debtor’s motion. It held that §362(a) did not stay the state-court motion hearing (a fortiori imposing no duty to cancel that hearing) because, under Wisconsin law, the default judgment motion only sought relief personal to the debtor’s lawyers, rather than from the debtor, the debtor’s property, or the debtor’s bankruptcy estate.
The court dismissed the debtor’s case after she failed to pay the first installment of the filing fee. Three days later, the debtor filed a motion to vacate the order of dismissal. The motion, which was unsupported by an affidavit, asserted without elaboration that debtor’s counsel did not believe she had received the order granting the debtor’s request to pay the fee in installments. The court denied the motion. The court reasoned that the lack of detail made it impossible to determine whether the default was the result of mistake, inadvertence, or excusable neglect, as required by Rule 9024. The court further ruled that the debtor’s failure to pay the filing fee in full with the motion, a prerequisite to seeking relief from the order of dismissal, constituted an independently sufficient ground to deny the motion.
Court granted relief from automatic stay under sec. 362(d)(3)(A) because single asset real estate debtor's proposed chapter 11 plan did not have reasonable possibility of being confirmed within reasonable time. Additional factor establishing "cause" for relief under sec. 362(d)(1) was prepetition stay waiver within forbearance agreement between debtor and secured lender.
Debtor filed a petition without the required schedules. On the 14th day, rather than filing the documents required by Rule 1007, the debtor, through her counsel, filed a motion to extend time stating only that “[t]he Debtor is currently gathering documentation in order to file her completed bankruptcy schedules.” The court has received other motions using identical boilerplate language. The court found that the motion did not show “cause” for an extension as required by Rule 1007 but held the debtor’s motion in abeyance for 2 days to allow the debtor an opportunity to show cause why additional time is needed. The court further ordered that any future motions to extend based on unspecified emergencies and claims that documents are being gathered will be denied.
The debtors had filed an objection to the creditor's Rule 3002.1 notices of postpetition fees, expenses and charges. The debtors argued that the creditor had charged monthly property inspection fees for a number of months, and that those fees were not reasonable. The Court agreed. The Court noted that Rule 3002.1(e) allowed a debtor to file a motion, asking the court to determine whether certain fees, expenses or charge were reasonable. The Court stated that it understood that mortgage creditors conducted property inspections in situations in which the debtor had defaulted, and the creditor needed to make certain that the debtor had not walked away from the property. The Court stated that it made sense for a creditor to conduct an inspection, and charge the fee, in months in which a debtor had not made a payment. But in months in which the debtor had made the mortgage payment, the Court stated that the creditor should be able to deduce from that fact that the debtor remained in the property and was maintaining it. In the current case, the debtors had missed only two payments. While these two missed payments had resulted in the debtors carrying a running two-month arrearage for almost a year, the Court found it significant that the debtors had made regular, monthly payments for most of that year. The Court concluded that the inspection fees of $13.50 each were reasonable for the two months in which the debtors had missed payments, but were not reasonable for the months in which they had actively made payments in spite of being in arrears. The Court therefore deemed the two months' worth of inspection fees (totalling $27) reasonable and collectible (as well as the one broker's price opinion fee, which the parties agreed was not in dispute), and deemed the remaining inspection fees unreasonable and uncollectible.
The Chapter 7 trustee objected to the debtor's claimed exemption in three EdVest college savings accounts. The trustee argued (a) that the debtor had transferred money into the accounts in order to hinder, delay or defraud creditors, (b) that pursuant to the reasoning in Judge Utschig's 2011 decision in In re Bronk, a debtor could not use the Wisconsin exemptions to exempt that debtor's interest in college savings plans, and (c) that rather that exempting the "fair market value" of the accounts, the Court should require the debtor to list a dollar value for the exemption. The parties had submitted briefs on the second issue--the question of whether a debtor could use Wisconsin exemptions to exempt the debtor's interest in college savings accounts--and the Court issued an oral ruling on that issue on February 25, 2013. The Court respectfully disagreed with Judge Utschig's decision in In re Bronk, 444 B.R. 902 (Bankr. W.D. Wis. 2011) (affirmed by Judge Conley on appeal, currently on appeal to the Seventh Circuit). In Bronk, Judge Utschig held that one should read Wis. Stat. section 815.18(3)(p) in conjunction with Wis. Stat. section 16.641(7) and Wis. Stat. section 16.64(8), and that to do so mandated the conclusion that only the beneficiary's interest in a college savings plan could be exempted. The Court in the instant case found that the language of section 815.18(3)(p) clearly allowed a debtor to exempt the debtor's interest in a college savings plan. The Court also found that section 16.641(7) did not conflict with 815.18(3)(p)--rather that negate a debtor's ability to exempt his interest in such a plan, it merely supplemented 815.18(3)(p) by also protected a beneficiary's right to qualified withdrawals from garnishment, attachment, execution or other process of law. The Court further concluded that it was not appropriate to look to the language of section 16.64(8)--protection monies deposited in and a beneficiary's interest in tuition and expense programs when interpreting 815.18(3)(p), because 815.18(3)(p) did not incorporate that statute by reference, and the two types of plans--college savings plans and tuition and expense programs--were different in purpose and structure. Accordingly, the Court overruled the trustee's objection to the debtor's claim of exemption to the extent that that objection was based on the In re Bronk reasoning, and held that a debtor could exempt his own interest in EdVest accounts. The Court scheduled a further hearing date on the other grounds stated in the trustee's objection.