The chapter 13 debtor filed a motion requesting that the court approve a loan for the purchase of a vehicle. The court held that the Bankruptcy Code delegates oversight of chapter 13 debtor consumer transactions to the chapter 13 trustee. The court denied the debtor's motion but took no view on whether the chapter 13 trustee should exercise her discretion to approve the debtor's proposed consumer credit transaction.
In re Gouthro, Case No. 12-35699 (June 2016) -- Judge G.M. Halfenger
The court overruled the debtors' meritless objection to the trustee's affidavit of default. The objection neither (1) disputed the veracity of the trustee's affidavit of default nor (2) argued that the debtors could establish excusable neglect to justify an expansion of the time to perform under Federal Rule of Bankruptcy Procedure 9006(b)(1). The order provides notice that similar meritless objections to affidavits of default risk sanctions under 11 U.S.C. section 105(a) and Federal Rule of Bankruptcy Procedure 9011(c).
In re James Burke, Case No. 16-23732 (June 2016) -- Judge G.M. Halfenger
The chapter 13 debtor's case was automatically dismissed pursuant to 11 U.S.C. section 521(i) because the debtor failed to file his Statement of Financial Affairs. The debtor filed a motion to vacate the dismissal. He based the motion on the fact that the court's deficiency order did not advise him that he failed to file the Statement of Financial Affairs. The motion contended that counsel relied on the order to determine which additional documents he needed to file. The court denied the motion and explained that it is the debtor's duty to comply with section 521. Because the debtor neither timely filed the information required by section 521(a) nor moved to extend the time before section 521(i)'s 45-day deadline expired, the case was dismissed by operation of law, and the court had no authority to vacate that dismissal.
In re Gelhaar, Case No. 15-20540 (June 2016) -- Judge G.M. Halfenger
Decision and order discussing the best-interests-of-creditors test under 11 U.S.C. section 1325(a)(4).
In re Birschbach, Case No. 15-22376 (March 2016) -- Judge G.M. Halfenger
The debtor filed a motion pursuant to 11 U.S.C. section 522(f) in one push mower and two riding lawn mowers. The court determined that section 522(f)(4) did not permit the debtor to avoid the lien on the riding lawn mowers but that the debtor was entitled to avoid the lien on the push mower.
In re Burris, Case No. 15-31603 (December 2015) -- Judge G.M. Halfenger
A secured creditor objected to the debtor's plan because the debtor's plan did not provide for its claim. Overruling the objection, the court held that nothing in section 1322 or 1325 required the debtor to include the secured claim in her plan.
In re Tina Enders, Case No. 15-21737 (September 2015) -- Judge G.M. Halfenger
Creditor objected to confirmation of the debtor's chapter 13 plan contending that the plan's payment of its secured claim in pro rata distributions did not comply with 11 U.S.C. §1325(a)(5)(B)(iii)(I)'s requirement that periodic payments on secured claims be made in “equal monthly amounts”. The court sustained the objection.
In re Ashley Phillips, Case No. 14-29453 (September 2015) -- Judge G.M. Halfenger
The United States Department of Education filed a late claim in this chapter 13 case. The trustee objected. The Department argued that the claim should be allowed under 11 U.S.C. §105 or based on “due process considerations” because the debtor had not listed the claim and it had not received notice of the bankruptcy until after the claims bar deadline. The court sustained the objection.
In re Tamera Kuchenbecker, Case No. 10-33067 (September 2015) -- Judge G.M. Halfenger
The debtor filed a motion to reconsider the court's denial of her post-conformation motion to modify a chapter 13 plan that would change payments on unsecured claims from 100% to 0%. She contended that she lacked a valuable interest in joint tenancy property, and, therefore, her proposed modification did not fail the best-interests-of-creditors test. Although the property deed lists her as a cotenant, she argued that her interest lacks liquidation value because she holds only “bare legal title” or, alternatively, that her interest in the property is impaired by an equitable lien.
The court denied the debtor's motion for reconsideration and held that (1) as against a trustee representing the interests of creditors, the deed's designation of ownership determines the allocation of real property rights and cannot be disregarded based on the debtor's limited use of the property or lack of contribution to maintaining it; and (2) under Wisconsin law, the debtor could not employ the equitable lien doctrine to shield property from creditors.
Neitzel v. J.P. Morgan Chase Bank, N.A. (In re Neitzel), Case No. 15-2057 (July 22, 2015) (July 2015) -- Judge G.M. Halfenger
The debtor commenced an adversary proceeding against J.P. Morgan Chase Bank, N.A., (“Chase”) requesting a declaration that Chase's claim secured by a junior lien on the debtor's principal residence is only allowable as an unsecured claim because the residence's value was less than the amount the debtor owes a senior lienholder. The parties entered into a stipulation to resolve the adversary proceeding and requested that the court approve the stipulation. The stipulation provided, in part, that once the court approved the stipulation Chase would be permitted to file an unsecured claim for its current outstanding loan balance, despite the fact that the claims bar deadline had expired and Chase had not filed a claim. Chase argued that it could file its unsecured claim after the claims bar deadline because Federal Rule of Bankruptcy Procedure 3002(c)(3) provided an exception to the general rule that proofs of claims in chapter 13 cases must be filed within 90 days after the first date set for the meeting of creditors. The court denied the parties' request to approve the stipulation and held that Chase did not qualify for the exception set out in Fed. R. Bankr. P. 3002(c)(3). The court reasoned that Rule 3002(c)(3) only applies where a judgment both (i) gives rise to an unsecured claim or makes the claim allowable, and (ii) provides for the recovery of money or property or avoids an interest in property. The proposed judgment in the adversary proceeding would not avoid Chase's lien; thus it would not satisfy criterion (ii). And the order confirming the plan, which, depending on the plan terms, might eliminate Chase's lien, would not satisfy criterion (i).