OpinionsLender's security interest, perfected within 90 days of the debtor's petition date, was avoided under s. 547 of the Code. The lender's defenses of equity and equitable subrogation were rejected by the court. In re Mary & Vernell Patton, et al., Case Nos. 08-23038, 08-24709, 07-28262 (November 2008) -- Judge M.D. McGarity Secured creditors' objections to chapter 13 plans were sustained, in part, and overruled, in part. The plan provision providing for separate treatment of prepetition arrearage(s) as contractually current was allowed, as interpreted by the court. The plan provision providing the mortgage(s) was current upon discharge was not allowed. In re Crawford, 397 B.R. 461 (October 2008) -- Judge S.V. Kelley Negative equity financed as part of new vehicle loan did not qualify for purchase money security interest treatment under the "hanging paragraph" of section 1325(a). The court adopted the "dual purpose" rule, allowing only the portion of the secured claim in the new car to qualify for hanging paragraph treatment. In re Kelly Ann Wood, Case No. 08-21191 (October 2008) -- Judge M.D. McGarity Creditor filed a motion to have its adversary complaint objecting to the dischargeability of an obligation, which was filed before the deadline to file proofs of claim in the debtor's chapter 13 case, construed as an informal proof of claim. The court denied the motion. Although the complaint evidenced the creditor's intent to hold the debtor liable for the obligation, it did not express an intent to hold the chapter 13 estate liable. In re Daniel & Eleanor Hilton, Case No. 08-25440 Published: In re Hilton, 395 B.R. 433 (October 2008) -- Judge M.D. McGarity Chapter 13 debtors who experienced a reduction in income immediately preceding the filing of their bankruptcy petition proposed to pay unsecured creditors less than the distribution required under the means test. The trustee opposed confirmation of the plan. The court determined that the term "projected disposable income" should not always be based solely on a historical perspective of income from Form B22C alone, but rather other evidence could be considered when a debtor experiences a significant change in circumstances reducing income at or around the time of the bankruptcy filing. In re Stascak, No. 08-24392 (October 2008) -- Judge S.V. Kelley Where 401(k) loan will be paid in full before end of Chapter 13 plan, payments on loan must be pro-rated over the life of the plan in order to comply with § 1322(f) In re James & Judith Michalek, Case No. 06-23355 Published: In re Michalek, 393 B.R. 642 (September 2008) -- Judge M.D. McGarity After the chapter 13 debtors defaulted under the terms of their prepetition lease and the automatic stay was lifted, the vehicle was repossessed by the creditor and sold. The creditor asserted an administrative claim for the amounts remaining due under the lease. The court granted the creditor's motion, finding the obligation was beneficial to the estate. Neary, UST v. Debtor (In re Stacie Happel) (September 2008) -- Judge J.E. Shapiro Neary, UST v. Debtor (In re Stacie Happel) - Prior to filing her bankruptcy petition, debtor became involved in a business relationship in which her and her “partner” would execute fraudulent loan applications in order to buy residential properties in the Milwaukee area. Title was put in the debtor's name only, and her “partner” handled everything else. Under the scheme, she received funds from him in order to artificially inflate her bank account and obtain approval of mortgage loans. Immediately after the loans were approved, the funds were removed and returned to her partner. Neither this partnership, the subsequent sale of these various properties, nor the proceeds thereof were disclosed on the debtor's schedules. The UST objected to a discharge being granted to the debtor based upon §§ 727(a)(3) and 727(a)(4)(A) of the Bankruptcy Code. The court concluded that in failing to include key information in her schedules, the debtor demonstrated a reckless disregard for the truth, sufficient to bar a discharge. The court also found that a denial of debtor's discharge was warranted based on her failure to keep or preserve business records. The court concluded that while debtor may not have been sophisticated in business dealings and was taken advantage of by her partner, she was not an innocent victim. In re Schley, 2008 Bankr. LEXIS 2214 (August 2008) -- Judge S.V. Kelley "Special circumstances" did not exist where debtor worked as an occupational therapist for a school system, only receiving income during 9 months of the year. In re Cruz, 2008 Bankr. LEXIS 2540 (August 2008) -- Judge S.V. Kelley Entire bonus received in 6-month prefiling period was included in current monthly income. |