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    In re Edwards, No. 19-27975-kmp, 2019 Bankr. LEXIS 3156 (Bankr. E.D. Wis. Oct. 3, 2019) (October 2019) -- Judge K.M. Perhach
    The Court sustained an objection by the Debtor’s mortgage creditor and denied the Debtor’s motion to continue the automatic stay in her fourth Chapter 13 bankruptcy case in the last three years. The Court found that the Debtor did not rebut the presumption that the case was not filed in good faith by clear and convincing evidence pursuant to 11 U.S.C. § 362(c)(3). The Debtor had filed all four of her bankruptcy cases on the eve of sheriff’s sale or a hearing on a motion to confirm the sheriff’s sale. Because the Debtor had not paid her mortgage creditor for the last four to five years, the arrearage on the Debtor’s mortgage debt had almost doubled. The Debtor also had a history of proposing plans hinging on participation in the Court’s Mortgage Modification Mediation program but failing to comply with the program requirements. Finally, there was a lack of evidence as to a substantial change in the Debtor’s personal or financial affairs.

    In re Dawn Schroeder, Case No. 17-27289 (September 2019) -- Chief Judge G.M. Halfenger
    Before confirmation Richard Voss filed proof of a claim secured by a mortgage on the chapter 13 debtor's residence. The confirmed plan provided for mediation to modify the mortgage and either payment on Voss's claim outside of the plan, if modified, or a plan modification to address the claim, if not. About a year after confirmation, after mediation failed, Voss filed an amended proof of claim, seeking to increase the amount of his secured claim based on a post-confirmation increase in the value of the debtor's residence. The debtor objected to Voss's claim and filed a request to modify the confirmed plan to pay Voss's allowed secured claim through the plan in the amount stated in his original proof of claim and to otherwise treat his claim as an allowed unsecured claim. The court concluded that the debtor's proposed modification of the plan is permissible under 11 U.S.C. §§1322(c)(2) & 1329, disallowed Voss's amended proof of claim based on insufficient cause to amend, and sustained the debtor's objection to Voss's claim.

    In re Bruce, Case No. 18-21283-beh, 2019 WL 5887173 (September 2019) -- Judge B.E. Hanan
    The Chapter 13 debtor filed a motion seeking sanctions for violations of the automatic stay, and for contempt against a county child support agency based on the agency’s continued collection of both pre-petition arrears and current child support payments from the debtor via payroll deductions, even after the debtor’s plan was confirmed. The debtor later dropped his request for stay-violation sanctions, after conceding that the agency’s post-petition collection activity was excepted from the stay per 11 U.S.C. § 362(b)(2)(C) and proceeded with a motion for contempt sanctions and attorney fees. The agency argued that a finding of contempt was not warranted because it was not notified that the debtor’s plan had been confirmed until four months after the order, and it stopped collecting child support arrearages as soon as it was given notice.

    The Court determined that the agency’s continued garnishment of the debtor’s wages after plan confirmation and before it received actual notice of the confirmation order did not constitute contempt, warrant sanctions, or warrant granting attorney fees. The Court found that the agency, as a priority creditor, did not have a duty to monitor the debtor’s bankruptcy case for potential plan confirmation. Furthermore, the agency did not act in knowing or reckless disregard of the confirmation order because it had no actual knowledge of its existence during the time period in dispute. Additionally, the Court found that the debtor could not be awarded attorney fees because he failed to state an adequate basis for damages.

    In re Patrick and Hope Souter, Case No. 19-21582 (September 2019) -- Chief Judge G.M. Halfenger
    The court ordered the debtors to show cause why their chapter 13 case should not be dismissed or converted based on their failure to file all applicable tax returns as required by 11 U.S.C. §1308, a requirement for plan confirmation specified in 11 U.S.C. §1325(a)(9). The debtors argued that some of §1325(a)'s requirements may be mandatory—including §1325(a)(1)'s requirement that the plan must comply with all applicable provisions of the Code, United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 277 (2010)—but others are discretionary, such as §1325(a)(9)'s requirement that the debtor must comply with §1308, and the court may confirm the plan even if such a requirement is not satisfied, if no one objects. The court held that the best construction of §1325(a), given Supreme Court and Seventh Circuit authority, is that all of its requirements are mandatory. The court denied confirmation and dismissed the case.

    In re Pugh, Case No. 19-20696-beh, 2019 WL 4180281 (September 2019) -- Judge B.E. Hanan
    In his Chapter 13 plan, the debtor proposed to modify the mortgage on his residence directly with the lender within six months, and amend the plan if not successful. The mortgage lender objected, pointing out that the debtor did not sign the corresponding note or mortgage; instead, the debtor’s deceased brother was the original borrower, and the debtor obtained title to the property via a quitclaim deed from his mother, who received the property through testation after his brother’s death. The mortgage lender argued that it should not be required to negotiate with a non-borrower, and further asserted that the transfer of the property to the debtor via quitclaim deed triggered the due-on-sale clause of the mortgage. In response, the debtor asserted that the lender should treat him as a borrower because he is a “successor in interest” under RESPA regulations, and that the lender was estopped from challenging mediation attempts because it had agreed to mediation in the debtor’s two prior bankruptcy cases. The court rejected the debtors’ arguments. Because the debtor did not receive the property directly as an heir of the borrower he was not a “successor in interest” under the regulations he cited, nor did a related federal law (the Garn-St. Germain Act) render the due-on-sale clause unenforceable.

    In re Karl Boddy, Jr. and Theresa Boddy, Case No. 19-23004 (August 2019) -- Chief Judge G.M. Halfenger
    The chapter 13 debtors' amended plan provides for an allowed claim secured by a mortgage on their principal residence, stating that the debtors will seek a modification of the mortgage through the court’s mortgage modification mediation program; if mediation is successful, the debtors will pay the claim "outside of the plan"; if mediation is unsuccessful, the debtors "will file a feasible plan to address the mortgage claim." The mortgage creditor consented to mediation but objected to plan confirmation, asserting that the plan does not conform to 11 U.S.C. §1325(a)(5). The court denied confirmation.

    In re Foley, Case No. 18-29998 (August 2019) -- Judge B.H. Ludwig
    The debtors' proposed chapter 13 plans contained lien-retention language in the non-standard provisions which deviated from the lien-retention requirements in 11 U.S.C. §1325(a)(5)(B). The court found the language in the non-standard provisions was not a barrier to confirmation because the affected secured creditors had accepted the plans, concluding that a properly served secured creditor that declines to object to confirmation has accepted the proposed plan for purposes of §1325(a)(5)(A). Nevertheless, because the issue was not ripe, the court declined to interpret the non-standard provisions.

    In re Velicia Buchanan, Case No. 16-30201 (August 2019) -- Chief Judge G.M. Halfenger
    A mortgage creditor filed an affidavit of default and debtor’s counsel filed an “objection” that explained that counsel had not been able to contact the debtor but that counsel believed that there may have been extenuating circumstances for the debtor’s failure to make mortgage payments. The court overruled the debtor’s objection as baseless and granted the mortgage creditor relief from the automatic stay. The debtor filed a letter requesting that the court “rescind” the order granting the creditor relief from the automatic stay. The court refused to act on the debtor’s request to rescind the order, noting that the request was not properly made because it was made by letter, rather than by motion on notice as required by Federal Rules of Bankruptcy Procedure 9013 and 9014. The court also noted that the letter did not state with particularity the grounds for the relief the debtor sought, nor did it state the authority on which it was based, as required by Federal Rule of Bankruptcy Procedure 9013 and Local Rule 9013, respectively.

    In re Victoria Toliver, Case No. 17-20724 (August 2019) -- Chief Judge G.M. Halfenger
    The confirmed chapter 13 plan provides for payment with interest by the trustee of Consumer Portfolio Services Inc.'s claim secured by the debtor's vehicle. The debtor filed a request to modify the plan to surrender the vehicle and discontinue payments on CPS's secured claim. CPS objected to the proposed modification asserting that 11 U.S.C. §1329(a) does not permit such a modification and that the modification was not proposed in good faith, as required by 11 U.S.C. §§1329(b) & 1325(a)(3). The court concluded that the debtor's proposed modification is to "reduce the amount of payments on claims of a particular class provided for by the plan", as allowed by §1329(a)(1), and that the good-faith inquiry requires an evidentiary hearing.

    In re Pansier, Case No. 18-22297-beh, 2019 WL 3561593 (August 2019) -- Judge B.E. Hanan
    The pro se debtors sought the bankruptcy judge’s disqualification under 28 U.S.C. § 455(a)—which requires a judge to disqualify herself in any proceeding in which her impartiality might reasonably be questioned—based solely on the Court’s adverse legal rulings and excerpts of statements the Court made at related hearings. After carefully considering each of the twelve alleged bases for recusal identified in the motion, the Court denied the debtors’ request, concluding that a thoughtful and well-informed observer would not view the judge as displaying a deep-seated favoritism or antagonism that would make fair judgment impossible. The Court also observed that granting the debtors’ motion in the circumstances would set a dangerous precedent and create a system where unhappy litigants could demand recusal by any judge who issues one or more adverse rulings or otherwise disagrees with a litigant’s legal theories.