OpinionsChapter 7 pro se debtor moved for the appointment of counsel pursuant to 28 U.S.C. sec. 1915(e)(1). The court denied the motion, finding no exceptional circumstances justified the appointment of pro bono counsel. Scaffidi v. Barbosa, 08-2056 (June 2009) -- Judge P. Pepper The Court granted the plaintiff trustee's motion for default judgment against the debtor's former husband. The Court agreed with the trustee that the debtor's 2007 transfer of her interest in the former marital homestead via a quitclaim deed was avoidable pursuant to 11 U.S.C. 549(a) as an unauthorized, post-petition transfer of estate property. The Court further found that the debtor's 2005 transfer of her interest in certain assets to the defendant via a Marital Settlement Agreement ("MSA") constituted a transfer in constructive fraud of her creditors pursuant to Wis. Stat. 242.04(1)(b), and therefore was avoidable under 11 U.S.C. 544(b)(1). The Court concluded that when the debtor signed the MSA and transferred to the defendant her interest in half of the marital homestead, as well as her interest in anything in the defendant's possession, she reasonably should have believed that this transfer would cause her to incur debts beyond her ability to pay as they became due. After the transfer, the debtor--unemployed and disabled--was left with no real estate, no assets other than a 14-year-old car, and only her disability income and a small maintenance payment from the defendant. In Re Streckrich Petro Corporation, 08-31860 (June 2009) -- Judge P. Pepper The Court granted the Chapter 11 creditor's motion to compel the debtor-in-possession to assume or reject a lease. The Court first agreed with the creditor that the agreement in question was, in fact, a lease under Missouri law, overruling the debtor-in-possession's objection that the agreement was something other than a lease. The Court then held that by filing the motion to compel before the expiration of the 120-day assumption period, the creditor had, in effect, tolled that period. The Court concluded that seven (7) days remained during which the debtor-in-possession could elect to assume or reject the lease, or could request that the Court extend the time for it to make that decision. In re Thongta, 2009 Bankr. LEXIS 1428 (June 2009) -- Judge S.V. Kelley Co-debtor stay of § 1301 did not serve to stay enforcement of the debt because it was not a debt "of the debtor." Further, the stay did not protect the non-filing spouse from collection activities stemming from her own personal liability. Stanfield v. First Midwest Bank (In re Daniel and Sharon Stanfield) (June 2009) -- Judge J.E. Shapiro Debtors commenced an adversary proceeding seeking a determination that the Bank's mortgage was void because the debtor-husband did not sign the mortgage on a homestead that was collateral for a business loan. Wis. Stats. § 706.02 states that both married persons must join in a conveyance. The bank responded that the mortgage it held was valid due to the “substitute requirements” contained in the statute, which allow extrinsic documents to prove the validity of a mortgage so long as there is intent on the part of the non-signing spouse to mortgage his interest in the property. The court found that no such intent was present. The court also rejected the bank's argument that it would be inequitable to invalidate the mortgage, noting that the bank is a sophisticated entity and has the obligation to check the requirements of Wisconsin law. In re Nelsen, 404 B.R. 892 (April 2009) -- Judge S.V. Kelley Debtor's age and downturn in economy did not constitute "exceptional circumstances" to justify discharge of student loan. In re Timothy & LeAnn Truss, Case No. 08-21626 Published: In re Truss, 404 B.R. 329 (April 2009) -- Judge M.D. McGarity The chapter 13 trustee opposed confirmation of plan which treated student loan creditor as separately classified creditor, arguing it unfairly discriminated against the other unsecured creditors. The court overruled the trustee's objection, finding the specific provisions of sec. 1322(b)(5) for the cure of arrearages and maintenance of regular payments on long term indebtedness applied and superceded the general unfair discrimination provisions of sec. 1322(b)(1). Debtor v. Creative Loans, LLC, Et Al (In re Eradean Walker) (April 2009) -- Judge J.E. Shapiro The debtor, after filing a bankruptcy petition under chapter 13 and without obtaining court approval, entered into agreements, in which she believed she was refinancing the mortgages on her two residential properties. In reality, it was a scam and the agreements transferred her ownership interest in both properties, giving her only the right to occupy the properties as a tenant for a period of 1 year, with no option to re-purchase. The debtor, an elderly widow with a 9th grade education, commenced an adversary proceeding against defendants, seeking the return of her ownership interest in the properties. The court concluded that the debtor never understood what she was signing and found the transactions to have violated § 362(a)(3), as acts to obtain possession of property of the estate, and § 549(a), as a post-petition transfer not authorized by the court. In re Dionne, 402 B.R. 883 (April 2009) -- Judge S.V. Kelley In calculating disposable income, Chapter 13 debtors could deduct secured payments that were contractually due on the date of the petition, even though they intended to surrender the collateral. In re Landry, No. 08-C-947 (April 2009) -- Judge S.V. Kelley District Court opinion affirming the decision of the bankruptcy court. Credit card debt was dischargeable, given that creditor failed to prove fraud or false representation on the part of the debtor. |