attorney track staff symposium 2017 march,...

Attorney TrackStaff Symposium 2017

March, 2017

Please Feel Free to Join the Discussion…

With your hosts…

Sarah E. Smith

Senior Staff Attorney

Chapter 13 Trustee – Kathleen A. Leavitt

Las Vegas, Nevada

O. Anthony Olivadoti

Managing Attorney

Chapter 13 Trustee – Marilyn O. Marshall

Chicago, Illinois

Michael Cecil

Staff Attorney

Chapter 13 Trustee – Jon M. Waage

Tampa, Florida

AgendaDay 1

Exemptions and Liquidation

Property of the Estate

Case Control

Chapter 13 Trustee

Part 1

Part 2

Part 3

Part 4

AgendaDay 2 Tax Issues

Practice Topics

Case law Update

Questions and Answers

Part 5

Part 6

Exemptions

The statutory predicate to determine liquidation values

Chapter 13 Trustee duties under §1302(2)(1) – Trustee has no express incorporated duty from §704(a)(1) to collect property of the estate and reduce it to money

Hypothetical Liquidation Test

Debtor stays in possession of property of the estate unless otherwise ordered by the court under section §1306(b)

Which Exemptions apply?

Determined by residency or domiciliary requirements

Residence vs. Domicile

Same exemptions both debtors §522(b)(1) but does the court have to specifically order a joint case be jointly administered

TBE or Joint tenant §522(b)(3)(b) state law applies with 4 or 5 unity rule

Let it Be

Which sets of exemptions apply

Exemptions

Purpose of Exemptions

Clear intent of 11 USCS §522(f)(1) is to give debtors fresh start. Unifund C.C.R. Partners v Sheckard (In re Sheckard) (2008, ED Pa) 394 BR 56.

Exemption laws have 5 basic purposes: to provide debtor enough money to survive, to protect debtor's dignity and cultural and religious identity, to afford means of financial rehabilitation, to protect family unit from impoverishment, and to spread burden of debtor's support from society to his creditors. In re Hahn (1980, BC SD Iowa) 5 BR 242, 2 CBC2d 761

Construction

Exemption statute is entitled to construction liberal to debtor absent intent to delay, hinder, or defraud creditors of payments made thereunder. In re Worthington (1983, BC WD Ky) 28 BR 736

Let it Be


Exemptions

Applicability of State Law Exemptions

Nothing in 11 USCS § 522(b) limits state's power to restrict scope of its exemptions; indeed, state could theoretically accord no exemptions at all. Owen v Owen (1991) 500 US 305, 114 L Ed 2d 350, 111 S Ct 1833, 91 CDOS 3710, 91 Daily Journal DAR 6043, 21 BCD 1164, 24 CBC2d 850, CCH Bankr L Rptr P 73963 (superseded by statute as stated in In re Parrish (1995, BC WD Wis) 186 BR 246, CCH Bankr L Rptr P 76786) Exemption laws have 5 basic purposes: to provide debtor enough money to survive, to protect debtor's dignity and cultural and religious identity, to afford means of financial rehabilitation, to protect family unit from impoverishment, and to spread burden of debtor's support from society to his creditors. In re Hahn (1980, BC SD Iowa) 5 BR 242, 2 CBC2d 761

State may not create exemption which conflicts with federal bankruptcy law. In re Love (1985, ED NC) 54 BR 947

Construction

Exemption statute is entitled to construction liberal to debtor absent intent to delay, hinder, or defraud creditors of payments made thereunder. In re Worthington (1983, BC WD Ky) 28 BR 736

Let it Be


Exemptions

Domicile

For purposes of determining where involuntary Chapter 7 debtor was domiciled for 180-day period immediately preceding filing of petition in order to determine applicable exemptions under 11 USCS §522, bankruptcy judge must make factual finding based on evidence of debtor's intent and overt acts manifesting this intent; debtor's domicile is properly considered to be in Tennessee, even though he had leased condominium in Florida one year prior to filing of petition, where overt acts which would normally indicate intent, i.e., registering to vote, filing declaration of homestead and obtaining Florida driver's license, all occurred shortly before filing. In re Wilson (1985, ED Tenn) 62 BR 43, 14 BCD 1144

Chapter 7 debtor who currently resides in Wisconsin but who was required to file his petition in Florida, where he previously resided, pursuant to 28 USCS § 1408(1), cannot claim Florida exemptions because he is not Florida resident as required by Florida exemption statutes; debtor may, however, avail himself of federal exemptions under 11 USCS § 522, because Florida opt-out statute only applies to Florida residents and does not apply to prevent nonresidents who, because of venue provisions of 28 USCS § 1408, are required to file in Florida, from claiming federal exemptions. In re Schulz (1989, BC ND Fla) 101 BR 301, CCH Bankr L Rptr P 72951

Let it Be


Exemptions

Time periods

730 days and 180 day rule §522(b)(3)(A)

1215 days §522(p) and cap on value rule

Opt out states – is this you? §522(b)(2)

Example – Florida is an opt out and not as generous as Federal with personal property, household goods and motor vehicles. Homestead exemption is more generous than Federal

The Long and Winding Road

When do they apply and the relevant time periods

Liquidation Values

Historical Context

“Section 1325(a)(4) is commonly called the "best interests of creditors" test. Under the Code, holders of allowed unsecured claims are not given the power to accept or reject the plan, as they were under the Act. To protect their interests, however, a condition precedent to confirmation is that the plan be in the best interests of all holders of allowed unsecured claims. The Court need not launch an independent investigation.” In re Roe, 16 B.R. 706, 709 (Bankr. D. Kan. 1982)

Definition as found in the Bankruptcy Code:

11 U.S.C. § 1325(a)(4)

(a) Except as provided in subsection (b), the court shall confirm a plan if--

(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title [11 USCS §§ 701 et seq.] on such date;

Maxwell’s Silver Hammer

Determining liquidation values

Liquidation Values cont’d.

How to calculate liquidation value or, “the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title”

Start with: Identify:1. The property and determine the value.2. Any liens against the property.3. Any applicable exemptions claimed by the debtor(s)

Value of property – liens – Applicable exemptions = Net Equity

What are the deductible costs in a Chapter 7?

11 U.S.C.S. § 326(a): In a case under chapter 7 or 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee's services, payable after the trustee renders such services, not to exceed 25 percent on the first $ 5,000 or less, 10 percent on any amount in excess of $ 5,000 but not in excess of $ 50,000, 5 percent on any amount in excess of $ 50,000 but not in excess of $ 1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $ 1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.

Net Equity – Chapter 7 Costs = Liquidation Value

Easy peasy lemon squeezy!!

How is Liquidation Value Calculated?

A few questions on the liquidation value calculation:

• How many debtor attorneys actually run the calculation?

• Is it OK to use Net Equity as liquidation value?

• What’s the highest known liquidation value and what was the property?

More Liquidation Value

Types of assets, methods of valuation, special considerations

• Cash on hand• Real property

• Valuation:• Value as scheduled?• Zillow?• Market Analysis provided by real estate broker• Appraisal

• How is jointly owned property valuated?• Inherited property owned by debtor and siblings• Property purchased by debtor with a portion interest

• Notes owned by debtor with residual income.• Balance due on note? Or,• Appraisal?

• Unliquidated Claim of Action(s)• To be determined amount upon settlement?• Or, does the court required a determination at confirmation?

• Preference payments

Liquidation Values Attorney Fees and

Liquidation Value

Not Allowed to count attorney fees in the calculation –

“The Chapter 13 attorney fees may not be subtracted from the net value of Debtors' non-exempt assets for purposes of the Chapter 7 liquidation test. The proposed payment through the Plan of Chapter 13 attorney fees in an amount substantially equal to the net value of the non-exempt assets does not satisfy the best interests of creditors test.” In re Goudreau, 530 B.R. 783, 790 (Bankr. D. Kan. 2015)



Liquidation Values

Confirmation Is the “effective date of the plan” the date of filing or the date of confirmation or

another date?

Date of confirmation because that is the date that the plan becomes binding upon the parties. Countrywide Home Loans, Inc. v. Hoopai (In re Hoopai), 581 F.3d 1090, 1101 (9th Cir. 2009).

Date of filing: A useful analysis can be found in In re Goudreau :

The Court finds that the better view is that the date the Chapter 13 petition was filed should be considered the "effective date of the plan" for purposes of the § 1325(a)(4) liquidation analysis. Choosing this date allows a court to:

Make the Chapter 7 analysis using the information in the original schedules, including the property of the estate under § 541, the non-exempt portion of the debtor's property, the value of the nonexempt property, and the identification and value of the debtor's claimed exemptions.

This information is available to creditors and the Chapter 13 Trustee for use when they review a proposed plan.

Using the filing date:

avoids the need to identify and value property, including postpetition earnings, which, under § 1306(a), becomes property of the Chapter 13 estate after the filing of the petition.

It also removes from consideration any increase or decrease in the value of estate property that occurs after the date the Chapter 13 petition is filed.

Also, focusing on the date of filing is consistent with the purpose of the best interests of creditors requirement to assure that unsecured creditors are not disadvantaged because the debtor chose to file the petition under Chapter 13 rather than Chapter 7.

In re Goudreau, 530 B.R. 783, 788-89 (Bankr. D. Kan. 2015)

But in some cases . . . the court prefers to use date of the valuation hearing:

“The date of the valuation hearing. See In re Klein, 10 Bankr. 657, 4 C.B.C. 2d 412, 7 B.C.D. 668 (Bankr. E.D. N.Y. 1981) . . . Since this Court held a protracted valuation and evidentiary hearing on August 17, 1981, this Court finds that the operative time to determine the value of the property to be distributed, is as of that date.” In re Roe, 16 B.R. 706, 709-10 (Bankr. D. Kan. 1982)

“The day of valuation is the date of confirmation generally. In re Fulcher, 15 B.R. 446 (Bkrtcy.Kansas 1981), . . . but here time of hearing is more appropriate as the evidence is directed to that time period. In re Blobaum, 34 B.R. 962, 964 (Bankr. W.D. Mo. 1983)



Is the “effective date of the plan” the date of filing or the date of confirmation or another date?

Date of confirmation because that is the date that the plan becomes binding upon the parties. Countrywide Home Loans, Inc. v. Hoopai (In re Hoopai), 581 F.3d 1090, 1101 (9th Cir. 2009).

OR

Date of filing: A useful analysis can be found in In re Goudreau :

The Court finds that the better view is that the date the Chapter 13 petition was filed should be considered the "effective date of the plan" for purposes of the § 1325(a)(4) liquidation analysis. Choosing this date allows a court to:

Make the Chapter 7 analysis using the information in the original schedules, including the property of the estate under § 541, the non-exempt portion of the debtor's property, the value of the nonexempt property, and the identification and value of the debtor's claimed exemptions.

This information is available to creditors and the Chapter 13 Trustee for use when they review a proposed plan.

Using the filing date:

avoids the need to identify and value property, including postpetition earnings, which, under §1306(a), becomes property of the Chapter 13 estate after the filing of the petition.

It also removes from consideration any increase or decrease in the value of estate property that occurs after the date the Chapter 13 petition is filed.

Also, focusing on the date of filing is consistent with the purpose of the best interests of creditors requirement to assure that unsecured creditors are not disadvantaged because the debtor chose to file the petition under Chapter 13 rather than Chapter 7.

In re Goudreau, 530 B.R. 783, 788-89 (Bankr. D. Kan. 2015)

But in some cases . . . the court prefers to use date of the valuation hearing:

“The date of the valuation hearing. See In re Klein, 10 Bankr. 657, 4 C.B.C. 2d 412, 7 B.C.D. 668 (Bankr. E.D. N.Y. 1981) . . . Since this Court held a protracted valuation and evidentiary hearing on August 17, 1981, this Court finds that the operative time to determine the value of the property to be distributed, is as of that date.” In re Roe, 16 B.R. 706, 709-10 (Bankr. D. Kan. 1982)

“The day of valuation is the date of confirmation generally. In re Fulcher, 15 B.R. 446 (Bkrtcy.Kansas 1981), . . . but here time of hearing is more appropriate as the evidence is directed to that time period. In re Blobaum, 34 B.R. 962, 964 (Bankr. W.D. Mo. 1983)

Liquidation Values

Post-Confirmation

Can you change values in a modified plan?

. . . It depends . . .

• Who do we represent?

• What outcome do we desire?

• Is the law settled in your jurisdiction?

• Do you want it to be?




“When applying the test to the modification of a confirmed plan, the Court concludes that the "effective date of the plan" should be the effective date of the modified plan, rather than the effective date of the initial plan.” In re Nott, 269 B.R. 250, 255 (Bankr. M.D. Fla. 2000)

“The better interpretation is that "the effective date of the plan" is the effective date of the plan as modified. This interpretation gives effect to § 1329(b)(2) and recognizes that the passage of time between confirmation of the original plan and confirmation of the modified plan does change the facts and circumstances of a Chapter 13 case. Those changes may benefit the debtor or benefit creditors, but the tests for confirmation in §§ 1322 and 1325 that are applied at confirmation of a modified plan under § 1329(b)(1) should be applied to the facts as they appear at the time of confirmation of the modified plan. Keith M. Lundin, Chapter 13 Bankruptcy, § 6.44 at p. 6-133 (2nd ed. 1994 & Supp. 1996)(quoted in In re Barbosa, 236 B.R. at 552.).” In re Nott, 269 B.R. 250, 255 (Bankr. M.D. Fla. 2000).

Liquidation Value cont’d.

“[T]he chapter 7 test must be recalculated as of the date the modified plan is filed.” In re Nachon-Torres, 520 B.R. 306, 314 (Bankr. S.D. Fla. 2014)

“[T]his court holds that the proper reading of the phrase "effective date of the plan" as used in § 1325(a)(4) when considering a modified plan confirmation under § 1329 is the effective date of the modified plan and not the original plan. In re Phillips, Nos. 10-33023 - DHW, 13-30162 - DHW, 2014 Bankr. LEXIS 3074, at *8 (U.S. Bankr. M.D. Ala. July 17, 2014)


“While § 1327 binds the debtor and creditors to the terms of the confirmed plan, Congress "provided a mechanism to change the binding effect of § 1327 when it passed § 1329 to allow for modifications." In re Witkowski, 16 F.3d 739, 745 (7th Cir. 1994). The Seventh Circuit went on to note that if the doctrine of res judicata was to apply to a confirmed plan, there would be "little or no reason for Section 1329." Id. (quoting In re Williams, 108 B.R. 119, 123 (Bankr. N.D. Miss. 1989) (internal quotations marks omitted)). Therefore, the res judicata effect of § 1327 does not per se preclude consideration of changes in the value of estate property that occur between the original confirmation and the proposed modification.” In re Phillips, Nos. 10-33023 - DHW, 13-30162 - DHW, 2014 Bankr. LEXIS 3074, at *9 (U.S. Bankr. M.D. Ala. July 17, 2014)

But . . .

What about … Res Judicata?


11 U.S.C. § 541(a)(a) The commencement of a case under section 301, 302, or 303 of this creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:(1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.(2) All interests of the debtor and the debtor's spouse in community property as of the commencement of the case that is--

(A) under the sole, equal, or joint management and control of the debtor; or(B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor's spouse, to the extent that such interest is so liable.

(3) Any interest in property that the trustee recovers under section 329(b), 363(n), 543, 550, 553, or 723 of this title .(4) Any interest in property preserved for the benefit of or ordered transferred to the estate under section 510(c) or 551 of this title.(5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date--

(A) by bequest, devise, or inheritance;(B) as a result of a property settlement agreement with the debtor's spouse, or of an interlocutory or final divorce decree; or(C) as a beneficiary of a life insurance policy or of a death benefit plan.

(6) Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case.(7) Any interest in property that the estate acquires after the commencement of the case.

But see also…

Run for Your Life

What constitutes Property of the Estate?

Relevant code sections

Property of the Estate cont’d.

11 U.S.C. § 541(b)

(b) Property of the estate does not include -- . . .

11 U.S.C. § 1306

(a) Property of the estate includes, in addition to the property specified in section 541 of this title [11 USCS §541]--

(1) all property of the kind specified in such section that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, or 11, or 12 of this title, whichever occurs first; and

(2) earnings from services performed by the debtor after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 11, or 12 of this title, whichever occurs first.

(b) Except as provided in a confirmed plan or order confirming a plan, the debtor shall remain in possession of all property of the estate.

11 U.S.C. § 1327(b)

Except as otherwise provided in the plan or the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the debtor.

More relevant code sections.


Pre-petition - 11 USC §541 Just about Everything

Confirmation – 11 USC §1327

(a) The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan.

(b) Except as otherwise provided in the plan or the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the debtor.

(c) Except as otherwise provided in the plan or in the order confirming the plan, the property vesting in the debtor under subsection (b) of this section is free and clear of any claim or interest of any creditor provided for by the plan.

(Parking Tickets!)

Post-Confirmation

Goodman v. Gorman, 534 B.R 656, (E.D.Va. July 21, 2015) Inheritance more than 2 years after petition became property of the Chapter 13 estate subject to motion to modify.

In re Murdock, 547 B.R. 475 (Bankr. S.D Ga. May 8, 2015) Inheritance and life insurance proceeds received more than 180 days after petition are captured by §1306 for distribution to creditors

Post-Discharge

Henley v. Malouf, 556B.R. 266 (Bankr. S.D. Miss Aug. 22, 2016) Chapter 13 case discharged in 2007 and reopened in 2015, undisclosed personal injury action filed in 2002 remained property of the estate

Run for Your Life

What constitutes Property of the Estate?

Property of the Estate Cont’d.

How does a debtor disclose property?

By filing schedules

11 U.S.C. § 541(a)(1)(ii)

(a) The debtor shall—

(1) file-- . . .

(i) a schedule of assets and liabilities;

But Debtors should also be careful to properly disclose initially . . .

See Open Letter to Debtors and Their Counsel written by Alan Jaroslovsky, U.S. Bankruptcy Judge. (wherein Judge Jaroslovsky cautions that amendments cannot cure false schedules.)

Duty to Disclose

Property of the estate cont’d.

Debtors can (and should) amend. . . General right to amend. A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed. The debtor shall give notice of the amendment to the trustee and to any entity affected thereby. On motion of a party in interest, after notice and a hearing, the court may order any voluntary petition, list, schedule, or statement to be amended and the clerk shall give notice of the amendment to entities designated by the court. USCS Bankruptcy R 1009.

Interests acquired or arising after petition. If, as provided by § 541(a)(5) of the Code [11 USCS § 541(a)(5)], the debtor acquires or becomes entitled to acquire any interest in property, the debtor shall within 14 days after the information comes to the debtor’s knowledge or within such further time the court may allow, file a supplemental schedule in the chapter 7 liquidation case, chapter 11 reorganization case, chapter 12 family farmer’s debt adjustment case, or chapter 13 individual debt adjustment case. If any of the property required to be reported under this subdivision is claimed by the debtor as exempt, the debtor shall claim the exemptions in the supplemental schedule. The duty to file a supplemental schedule in accordance with this subdivision continues notwithstanding the closing of the case, except that the schedule need not be filed in a chapter 11, chapter 12, or chapter 13 case with respect to property acquired after entry of the order confirming a chapter 11 plan or discharging the debtor in a chapter 12 or chapter 13 case. USCS Bankruptcy R 1007(h)

What is considered sufficient disclosure?- Amended schedules as contemplated by Rule 1007(h) and1009.- Notice of the amended schedules. - Disclosure on the schedules ensure that ALL parties in interest have

notice.


What is the debtor’s duty to disclose?

Is there an ongoing duty after filing the petition? After confirmation?

A debtor seeking shelter under the bankruptcy laws must disclose all assets, or potential assets, to the bankruptcy court. The duty to disclose is a continuing one that does not end once the forms are submitted to the bankruptcy court; rather, a debtor must amend his financial statements if circumstances change. Waldron v. Brown (In re Waldron), 536 F.3d 1239, 1244 (11th Cir. 2008) (holding that the court was correct to require disclosure, but not going so far as to require a “free standing” duty to disclose.)

Disclosure of postconfirmation assets gives the trustee and creditors a meaningful right to request, under section 1329, a modification of the debtor's plan to pay his creditors. Waldron v. Brown (In re Waldron), 536 F.3d 1239, 1245 (11th Cir. 2008)


Debtor’s Duty to disclose

In re Wheeler, 503 BR 694, Bktrcy.N.D.Ind 2013. In the Wheeler case, the Trustee brought a motion to dismiss the debtor’s case for cause even though the time period specified in the plan had run Judge Grant noted that the debtor, as a chapter 13 debtor had a duty to keep the Trustee apprised of material changes to her income and that failing to comply with that duty could end in dismissal. (The proper functioning of the bankruptcy system depends upon the complete and accurate disclosure of information concerning the debtor's assets, liabilities, income, expenses and financial affairs. See, Stamat v. Neary, 635 F.3d 974, 983 (7th Cir.2011); U.S. v. Ellis, 50 F.3d 419, 423 (7th Cir.1995); In re Bernard, 99 B.R. 563, 570 (Bankr.S.D.N.Y.1989) (“complete disclosure is the touchstone of a bankruptcy case”). Although most of these disclosures are made at the time the petition is filed, chapter 13 debtors, in particular, have an ongoing obligation to provide the trustee with information concerning their income and expenses until the case is closed. See, 11 U.S.C. § 521(f)(4); Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1274 (11th Cir.2010) (quoting Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1286 (11th Cir.2002)) (“the duty to disclose ... does not end once the forms are submitted to the bankruptcy court....”) These debtors were aware of that obligation and, at the 341 meeting, had agreed to notify their attorney of any change in income or employment during the case. They did not and so that information was never conveyed to the trustee; the result is the present motion to dismiss.) Id at 696. See also In re Wetzel, 318 BR 247 Bktrcy.E.D.Wis., 2008 (The Court notes concern with the Debtors' decision to gamble with their post-confirmation income. According to Judge Lundin, “cases support the proposition that a [trustee] can force the debtor with improved financial condition to a choice: accept an increase in payments to creditors or get out of Chapter 13.” Chapter 13 Bankruptcy, 3d Edition § 266.1. One court surmised that “Congress ... intended that the debtor repay his creditors to the extent of his capability during the Chapter 13 period. Certainly, Congress did not intend for debtors who experience a substantially improved financial condition after confirmation to avoid paying more to their creditors.” In re Sounakhene, 249 B.R. 801, 805 (Bankr.S.D.Cal.2000). Rather, “unanticipated windfalls should inure to the benefit of the creditors, not the debtor.” In re Bostwick, 127 B.R. 419 (Bankr.N.D.Ill.1991) (citing In re Fitak, 92 B.R. 243 (Bankr.S.D.Ohio 1988)). It is “not the design of the Bankruptcy laws to allow the debtor to lead the life of Riley while his creditors suffer on his behalf.” In re Bryant, 47 B.R. 21, 26 (Bankr.W.D.N.C.1984).) Affects of Undisclosed Assets

Exemptions and post petition property

Leave My Kitten Alone

Duty to Disclose


What about duty to disclose an increase in income?In re Pautin and the duty to disclose:

- “Section 521(f) requires a Chapter 13 debtor to file tax returns on request of any party in interest. This requirement assists a trustee's determination if a modification is warranted based upon additional income.” In re Pautin, 521 B.R. 754, 764 (Bankr. W.D. Tex. 2014)

- The fact that a party has not sought copies of tax returns or income and expense reports does not allow a debtor to use undisclosed income for her own means.In re Pautin, 521 B.R. 754, 764 (Bankr. W.D. Tex. 2014)

- Unfortunately, in this case the court denied the confirmation of the Modified plan because it was not feasible – the plan was based on prior undisclosed income but did not take into account the current budget. However, the court did require all future tax refunds and returns to be turned over AND for the debtor to provide all pay advices to the Trustee on a quarterly basis.

How can the Trustee avoid missing out on bringing property into the estate? Plan should require turnover of tax returns each year. If your jurisdiction allows, require tax refund as well. Tax returns, pay advices and amended schedules – The office should have a procedure in place for

monitoring each of these documents that come in for:• Increase in income• Newly acquired property of the estate• Newly claimed exemptions• Undisclosed property – rental income or sale of property on tax returns


How can the Trustee avoid missing out on bringing property into the estate? Plan should require turnover of tax returns each year. If your jurisdiction allows, require tax refund as well. Tax returns, pay advices and amended schedules – The office should have a

procedure in place for monitoring each of these documents that come in for:• Increase in income• Newly acquired property of the estate• Newly claimed exemptions• Undisclosed property – rental income or sale of property on tax returns


Is property acquired after the filing of the bankruptcy considered property of the estate?

- “Claims acquired after the commencement of the bankruptcy case but before the case was dismissed were property of the estate under the plain language of § 1306(a). New assets that the debtors acquired unexpectedly after confirmation by definition did not exist at confirmation and could not be returned to him under 11 U.S.C.S. § 1327(b).” Waldron v. Brown (In re Waldron), 536 F.3d 1239, 1240 (11th Cir. 2008)

- “Section 1306(a) plainly extends the timeline for including "the kind" of property "specified in" Section 541 in Chapter 13 bankruptcy estates.”Carroll v. Logan, 735 F.3d 147, 149 (4th Cir. 2013) (Determining that an inheritance received more than 180 days after filing is property of the bankruptcy estate.)

- And also… “an inheritance received by chapter 13 debtors more than 180 days following the petition date but before confirmation of a chapter 13 plan and before the case is closed, dismissed or converted is property of the debtors' bankruptcy estate.”Dale v. Maney (In re Dale), 505 B.R. 8, 13 (B.A.P. 9th Cir. 2014)


Does it make a difference how the property is vested?When interpreting Sections 1306 and 1327, the courts have split into four groups, with each having its own interpretation of the combined meaning of Sections 1306 and 1327(b) on the automatic stay as it applies to property in Chapter 13 cases. The courts have acknowledged the conflict between these two sections and noted that they are not models of clarity. The opinions range from holding that all property of the estate remains so until the case is closed, dismissed or converted, to holding that property of the estate terminates upon confirmation. Cal. Franchise Tax Bd. v. Jones (In re Jones), 420 B.R. 506, 512-13 (B.A.P. 9th Cir. 2009). The four approaches:

1. "The estate preservation approach" - Property of the estate exists until the case is closed, dismissed or converted.

2. "The modified estate preservation approach" -- Existing estate property vests in the debtor at confirmation, and estate property continues to exist from post-petition income.

3. "The estate transformation approach" - Only property needed to fund the plan is estate property, all other property is under the debtor's control.

4. "The estate termination approach"--All property revests in the debtor and estate property is terminated upon confirmation.

Ultimately it may depend on the language of the plan. In Nevada we have the following language in the plan: 5.03 Vesting of property - Any property of the estate scheduled under §521 shall revest in the Debtor upon confirmation. In the event the case is converted to a case under Chapter 7, 11, or 12 of the Bankruptcy Code or is dismissed, the property of the estate shall be determined in accordance with applicable law.

Case Control

Collecting Payments

E – Pay

Mis-disbursements

From Debtors

From Creditors

From Attorneys

You Never Give Me Your Money

Keeping cases moving

I’m so Tired

Gathering Information

Collecting Payments

Old School:

Certified funds to a lock box in Memphis (or some variation thereof.)

Welcome to the future:

• E-pay

• TFS

• Other options?

• What about cash? NONONONONO –big audit issue.

The cornerstone of Chapter 13:

Plan Payments

(but these can also apply to other types of payments into the case.)

Mis-disbursements and Overpayments

What happens when the Trustee needs to recover money?

- Address the issue and work towards resolution.

- It is also a good time to review procedures in the office to try to eliminate issues in the future.


How can it be fixed?- Staff initiates the request for return of funds:

- Phone call- Letter(s)- Email follow up

- At some point the matter should be escalated to involve a staff attorney- Phone call, letter, email and/or- Motion to Compel a Refund of Overpayment (choose your own title.)- Does this motion need to be done in an Adversary Proceeding?

- It depends on your jurisdiction.

What happens if the party is non-responsive?- Motion for Contempt?- Or, in the instance of a creditor, try reaching out to creditor’s counsel. They

will often have contacts that can put you in touch with the right person that can get the job done.


Common reasons for disbursement issues:- Plan filed on the eve of disbursement that changes distribution.- Creditor files an amended claim reducing the amount of the claim after the

claim has been paid in full.- An audit later in the case reveals a claim was paid incorrectly.- Human error.

Issues to assist in recovery:- If the party is not responding check the address to where the notices were sent.

It could have changed mid-collection attempt.- FLUP early and often.- Call on contacts that you have in the legal field. They may be able to assist in

putting you in touch with the right person.

Chapter 13 Trustee

Standing Trustee

appointed under 28 USC § 586(b) - (b) If the number of cases under chapter 12 or 13 of title 11 [11 USCS §§ 1201 et seq. or 1301 et seq.] commenced in a particular region so warrants, the United States trustee for such region may, subject to the approval of the Attorney General, appoint one or more individuals to serve as standing trustee, or designate one or more assistant United States trustees to serve in cases under such chapter. The United States trustee for such region shall supervise any such individual appointed as standing trustee in the performance of the duties of standing trustee

Compensation and Trustee’s percentage fee – 28 USC 586 (e)

Case by Case Trustee

appointed under 1302 and compensation allowed under 330 with max compensation under 326(b)

1302 - (a) If the United States trustee appoints an individual under section 586(b) of title 28 to serve as standing trustee in cases under this chapter and if such individual qualifies under section 322 of this title [11 USCS § 322], then such individual shall serve as trustee in the case. Otherwise, the United States trustee shall appoint one disinterested person to serve as trustee in the case or the United States trustee may serve as a trustee in the case.

§ 330. Compensation of officers - (a) (1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329 [11 USCS §§ 326, 328, and 329], the court may award to a trustee, a consumer privacy ombudsman appointed under section 332 [11 USCS § 332], an examiner, an ombudsman appointed under section 333 [11 USCS § 333], or a professional person employed under section 327 or 1103 [11 USCS § 327 or 1103]-- (A) reasonable compensation for actual, necessary services rendered by the trustee, examiner, ombudsman, professional person, or attorney and by any paraprofessional person employed by any such person; and (B) reimbursement for actual, necessary expenses. (2) The court may, on its own motion or on the motion of the United States Trustee, the United States Trustee for the District or Region, the trustee for the estate, or any other party in interest, award compensation that is less than the amount of compensation that is requested. (3) In determining the amount of reasonable compensation to be awarded to an examiner, trustee under chapter 11 [11 USCS §§ 1101 et seq.], or professional person, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including--

I am the Walrus

Role of the Trustee

We Can Work it Out

Fees

Chapter 13 Trustee

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title [11 USCS §§ 101 et seq.];

(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed;

(E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and

(F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title [11 USCS §§ 101 et seq.]. (4) (A) Except as provided in subparagraph (B), the court shall not allow compensation for--

(i) unnecessary duplication of services; or

(ii) services that were not--

(I) reasonably likely to benefit the debtor's estate; or

(II) necessary to the administration of the case

5% Trustee fee per case under 326(b) with no max comp. overall - In a case under chapter 12 or 13 [11 USCS §§ 1201 et seq. or 1301 et seq.] of this title, the court may not allow compensation for services or reimbursement of expenses of the United States trustee or of a standing trustee appointed under section 586(b) of title 28, but may allow reasonable compensation under section 330 of this title [11 USCS §330] of a trustee appointed under section 1202(a) or 1302(a) of this title [11 USCS § 1202(a) or 1302(a)] for the trustee's services, payable after the trustee renders such services, not to exceed five percent upon all payments under the plan

I am the Walrus

Role of the Trustee

We Can Work it Out

Fees

Chapter 13 Trustee

Trustee’s Percentage Fee

The Attorney General, after consultation with a United States trustee that has appointed an individual under subsection (b) of this section to serve as standing trustee in cases under chapter 12 or 13 of title 11 [11 USCS §§ 1201 et seq. or 1301 et seq.], shall fix-- (A) a maximum annual compensation for such individual consisting of—

(i) an amount not to exceed the highest annual rate of basic pay in effect for level V of the Executive Schedule; and

(ii) the cash value of employment benefits comparable to the employment benefits provided by the United States to individuals who are employed by the United States at the same rate of basic pay to perform similar services during the same period of time; and (B) a percentage fee not to exceed--

(i) in the case of a debtor who is not a family farmer, ten percent; or

(ii) in the case of a debtor who is a family farmer, the sum of--

(I) not to exceed ten percent of the payments made under the plan of such debtor, with respect to payments in an aggregate amount not to exceed $ 450,000; and

(II) three percent of payments made under the plan of such debtor, with respect to payments made after the aggregate amount of payments made under the plan exceeds $ 450,000; based on such maximum annual compensation and the actual, necessary expenses incurred by such individual as standing trustee

Fees on Receipt

Such individual shall collect such percentage fee from all payments received by such individual under plans in the cases under chapter 12 or 13 of title 11 [11 USCS §§ 1201 et seq. or 1301 et seq.] for which such individual serves as standing trustee. Such individual shall pay to the United States trustee, and the United States trustee shall deposit in the United States Trustee System Fund--

(A) any amount by which the actual compensation of such individual exceeds 5 per centum upon all payments received under plans in cases under chapter 12 or 13 of title 11 [11 USCS §§ 1201 et seq. or 1301 et seq.] for which such individual serves as standing trustee; and

(B) any amount by which the percentage for all such cases exceeds--

(i) such individual's actual compensation for such cases, as adjusted under subparagraph (A) of paragraph (1); plus

(ii) the actual, necessary expenses incurred by such individual as standing trustee in such cases. Subject to the approval of the Attorney General, any or all of the interest earned from the deposit of payments under plans by such individual may be utilized to pay actual, necessary expenses without regard to the percentage limitation contained in subparagraph (d)(1)(B) of this section

I am the Walrus

Role of the Trustee

We Can Work it Out

Fees

Chapter 13 Trustee

Case Law

11 USCS § 326(b) prohibits allowance of standing Chapter 13 trustee's claim for administrative expenses when case is converted or dismissed before plan confirmation; only compensation that standing trustee may receive is percentage fee provided by 28 USCS §586(e), and if case is converted or dismissed before confirmation, standing trustee is not entitled to percentage fee and Bankruptcy Court is prohibited from allowing such compensation by § 326(b); such literal application of § 326(b) merely limits court's authority to allow administrative claims of U.S. trustee and standing Chapter 13 trustee but it does not completely divest court of its authority under 11 USCS § 503 to allow administrative claims to other parties, including nonstanding trustee appointed under 11 USCS § 1302; nor is trustee entitled to administrative claim on quantum merit basis, although such compensation has been allowed in Chapter 7 cases and in Chapter 13 cases in other Bankruptcy Courts. In re Ward (1991, BC DC Neb) 132 BR 417.

28 USCS § 586(e) delegates, to Attorney General, duty of setting fees for bankruptcy trustees but is silent on issue of what Chapter 13 trustee's standing percentage fee should be based upon; legislative history of statute does not elucidate matter and although Chevron deference rule does not apply to policy that is reflected in Executive Office for U.S. Trustee (EOUST), Handbook for Standing Trustees, p. 11-1 (December 1, 1998), because policy was not adopted pursuant to formal rulemaking procedures, EOUST's interpretation of 28 USCS § 586(e) was entitled to considerable weight given that it had been given delegated authority by Attorney General to set fees and also given statute's silence and lack of guidance that was provided by statute's legislative history; EOUST's policy, which allows Chapter 13 trustees to base their percentage fees on payments they receive from Chapter 13 debtors rather than on distributions that were made under bankruptcy plan, complies with 28 USCS § 586(e). In re Jackson (2005, BC SD Ga) 321 BR 94

I am the Walrus

Role of the Trustee

We Can Work it Out

Fees

Taxes and the IRS

Claims with Unfiled Tax Years

Prepetition Documents

Post Petition refunds

Single Debtors

Joint Debtors

Debtors claiming improper dependents

Improper HOH claims

Post petition tax claims

The Tax Man

Tax issues and case administration

I’ll Follow the Sun

Trustee’s role in tax enforcement

Practice Topics

§329/Objection to Fees

Rule 9011

In re Petrovic, 560 B.R. 213 (Bankr. N.D. Il. Nov. 16, 2016) Chapter 13 Trustee objected to debtor attorney fees because of a “bad case” filing where debtor not eligible for chapter 13. Judge Goldgar denied the objection. Holding: given that debtor got exactly what he bargained for in retaining attorney, no disgorgement of fees was warranted. Perhaps Benjamin could have been sanctioned under Rule 9011 for his conduct here. But if so it was incumbent on the Trustee to move for sanctions citing that Rule and it’s procedural requirements.

(b) Representations to the Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,— 1

(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;

(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.

It shall be served as provided in Rule 7004. The motion for sanctions may not be filed with or presented to the court unless, within 21 days after service of the motion (or such other period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected, except that this limitation shall not apply if the conduct alleged is the filing of a petition in violation of subdivision (b) [SAFE HARBOR]

Bad Boy

Sanction Motions

Practice Topics

Pleadings/Briefs

Judges want: Fast Reading Briefs

Easily Understood Arguments

Accurate Case and Law Citations

No Hyperbole or Opposition Bashing

No Distracting Typos or Bad Grammar

Effective Planning Create Workable Schedule

Identify Need for Declarations

Put in the Work

Leave Time for Editing

Getting Started Overcome the initial Terror

Start by Brainstorming

Put Ideas into Arguments and Structure

Break Arguments Down

Write Introduction Last

Common Themes and Arguments Opponent Misreads the Case law or Hasn’t

Cited the Most Important cases

Facts of this Case are Distinguishable

The Matter is not Ready for a Decision

Waiver of Arguments

Dumb Legalese Herewith

Heretofore

Aforementioned

Carry That Weight

Basic Legal Writing

Practice Topics

Pleadings/Briefs

Bad Cases

Don’t Ignore

Don’t tell Court Other Court is Stupid

Do Distinguish Facts

Do Point to Other Cases

Do Argue Other Cases Better Reasoned

Do Argue Language is Dicta

Last Resort – Wrongly Decided

Basics

Federal Rule: The complaint must…

Contain short plain statements of the claims, grounds for jurisdiction, and a demand for relief – FRCP Rule 8(a)

Organization

Introduction

Jurisdiction basis/venue

Parties

Facts

Law

Claims/Causes of Action

Prayer for Relief

Carry That Weight

Basic Legal Writing

Ethics

Duties of Competence, Diligence and Communication

Ethics and Bankruptcy

Hey Jude

Ethics and Bankruptcy Practice

Model Rules of Professional Conduct

Rule 1.1 Competence

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

Competent representation as used in this Rule means that a lawyer shall not handle a matter which the lawyer knows or should know to be beyond the lawyer’s level of competence without associating another lawyer who the original lawyer reasonable believes to be competent.

Incompetence is not merely a matter of concern for professional liability; it leads to disciplinary action. In re Farmer, 263 Kan. 531, 950 P.2d 713 (1997), provides a laundry list of a bankruptcy lawyer’s incompetence. The lawyer had repeatedly failed to follow rules concerning noticing of motions; did not understand the difference between secured and unsecured creditors, the fact that unsecured debts are discharged in a chapter 7 bankruptcy, or the 60 limitation on payments in a chapter 13; filed incomplete papers without the clients signatures; appeared at §341 meeting unprepared.

Rule 1.3 Diligence

A Lawyer shall act with reasonable diligence and promptness in representing a client.

Don’t forget, the Trustee is YOUR client.

Model Rules of Professional Conduct

Rule 1.4 Communication

(a) A lawyer shall:

(1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in Rule 1.0(e), is required by these Rules;

(2) reasonably consult with the client about the means by which the client's objectives are to be accomplished;

(3) keep the client reasonably informed about the status of the matter;

(4) promptly comply with reasonable requests for information; and

(5) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

Model Rules of Professional Conduct (continued)

Rule 1.2(d) Scope of Representation

A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.

A lawyer is required to give an honest opinion about the actual consequences that appear likely to result from a client’s conduct. The fact that a client uses advice in a course of action that is criminal or fraudulent does not in and of itself make a lawyer a party to that action. However, a lawyer may not knowingly assist a client in criminal or fraudulent conduct.


Rule 3.1 Meritorious Claims and Contentions

A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.

Rule 3.3 Candor Towards the Tribunal

(a) A lawyer shall not knowingly:

(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or

(3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false.


Rule 3.7 Lawyer As Witness

(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:

(1) the testimony relates to an uncontested issue;

(2) the testimony relates to the nature and value of legal services rendered in the case; or

(3) disqualification of the lawyer would work substantial hardship on the client.

Rule 4.2 Communication with Person Represented by Counsel

In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

Rule 8.3

(a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.

(b) A lawyer who knows that a judge has committed a violation of applicable rules of judicial conduct that raises a substantial question as to the judge's fitness for office shall inform the appropriate authority.

Case Law Updates

Case Law

Eligibility

In re Carswell, 2015 WL 8775748 (B.A.P. 9th Cir. Dec 11, 2015) Debtor’s admission that only source of income was a “voluntary debt repayment” of $600 per month from a “Housemate” was lack of regular income

In re Cummings, 2015 WL 7422414 (Bankr. N.D. Cal. Nov. 20, 2015) A $947,790 lien claim that was avoidable rendered the debtor over the unsecured debt limit

In re Jurgens, 2015 WL 6163511 (Bank. D. Mont. October 20, 2015) Claims that “will require an extensive and contested evidentiary hearing involving substantive evidence” were unliquidated

In re Fouts, 2016 WL 361220 (Bankr. S.D. Va. Jan. 27, 2016) Assuming debtor satisfies requirements for temporary exemption in §109(h)(3), debtor is still not eligible because more than 30 days passed after filing before debtor completed briefing

Causes of Action

Hirota v. General Nutrition Corp., 2015 WL 6673688 (D. Haw. October 29, 2015) Ch 13 debtor has standing to pursue personal injury and product-liability actions when she would be entitled to any surplus after creditors were paid and could exempt some portion of any recovery

Allen v C & H Distribs., 2015 WL 9461591 (5th Cir. Dec. 23, 2015) Judicial estoppel bars actions for workplace injuries that occurred after confirmation when debtors amended plan three times without revealing action.

Harper-Cox v. Gateway-Detroit East, 2015 WL 3652750 (E.D. Mich. June 11, 2015) Judicial estoppel does not preclude employment discrimination action when it could not be said that judicial acceptance of an inconsistent position in a later proceeding would create the perception that the court was mislead

Trustee Liability

In re Hunter, 553 B.R. 866 (Bankr. D.N.M. July 8, 2016) Ch 13 Trustee has quasi-judicial immunity from personal liability on claim of negligence in distributions to creditors

In re Chapter 13 Plan Admin., 2016 WL 2772099 (Bankr. S.D. Tex. May 6, 2016) In a witch hunt of epic proportions judges in Southern District of Texas have declared “system failure” with respect to the administration of Chapter 13 Plans

Good Day Sunshine

Case Law Updates

Case Law

BAPCPA

In re Lightfoot, 2015 WL 3956211 (Bankr. S.D. Tex. June 22, 2015) Post petition interest is part of a domestic support claim under §101(14A) as amended by BAPCPA; plan not only can but must pay post petition interest notwithstanding that other unsecured creditors will not be paid in full

HSBC Bank USA v. Zair, 2016 WL 1448647 (E.D.N.Y. April 12, 2016) Plan cannot vest property in mortgage under §1322(b)(9) without consent Burkhart v. Community Bank of Tri-County. 2016 WL 4013917 (D. Md. July 27, 2016) Ch 13 debtors cannot avoid wholly unsecured junior lien because no proof of claim was filed by or for the lienholder; §506(a) and (d) require a claim to have been filed before lien voiding or avoiding is available

Practice Tips

In re Crawford, 2016 WL 4089241 (Bankr .W.D. Tex. July 22, 2016) Debtors with excess DI can pay all creditors in full in 60 months or can pay all PDI for less than 60 months, but not need do both; Court will confirm a 60 month plan that included conditions that debtor cannot modify the plan to pay less than 100%

In re Ridenhour, 2016 WL 1688734 (Bankr. D. Ariz. April 25, 2016) Plan fails projected disposable income test when trustee presents evidence of substantial tax refunds in prior years and debtors refuse to correct overwithholding or to commit future tax refunds to the pot

In re Bridgeforth, 556 B.R. 121 (Bankr. M.D. Pa. July 29, 2016) Generally the total number of persons allowed for determining family size should be the same as those allowed as exemptions on the taxpayer’s most recent year tax return

In re Wareham, 553 B.R. 875 (Bankr. D. Utah July 6, 2016) inaccuracies in budget must be corrected so plan can survive §1325(d) analysis

In re Shay, 553 B.R. 412 (Bankr. W.D. Wash. June 29, 2016) Reading §1306(a), §1322(b)(9) and §1327(b), plan cannot vest future increases in income or future acquired property in debtors; post confirmation acquisitions and income must become property of the estate to allow capture by modification

Good Day Sunshine…the beat goes on...

Case Law Updates

Case Law

Claims

In re Jones, WL 4691043 (Bankr. N.D. Ind. Aug. 5, 2016) Bank failed to file proof of claim for its car loan in not entitled to stay relief, will not receive payments and faces discharge of its debt at completion of the plan

In re Hrubec, 544 B. R. 397 (Bank. N.D. Ill. Jan. 27, 2016) When a debtor voluntarily proposes a plan that includes payments to a secured creditor, and that creditor has no objection to its treatment under the proposed plan, there is no need for the creditor to file a proof of claim and the plan is not unconfirmable

In re Girardeau, 2015 WL 7625524 (Bankr. S.D. Ga. Nov. 16, 2015) Debtor cannot file allowable proof of claims under Rule 3004 on behalf of post petition creditors that do not consent

In re Jackson, 541 B.R. 887 (B.A.P. 9th Cir. Dec. 4, 2015) Neither §1308 nor Bankruptcy Rule 3002(c)(1) bars an amended claim when the original claim was timely filed

In re Ortiz Negron, 2015 WL 5568393 )Bankr. D.P.R. Sept. 21, 2015) Bank cannot amend its mortgage arrears claim in the 60th month because of prejudice to the debtor and unsecured creditors

Crawford v. LVNV Funding, 2016 WL 4249498 (M.D. Ala. Aug. 9,, 2016) Objection to proof of claim on grounds that debt is time-barred must be reisend before confirmation of Chapter 13 Plan

In re Brannan, 532 B.R. 834 (Bankr. D. Kann. June 25, 2015) Reconsideration of a claim under §502(j) is not available to challenge defective security interest when confirmed plan and preconfirmation agreed order acknowledge secured status

In re Dubose, 555 B.R. 41 (Bankr. M.D. Ala. Aug. 2, 2016) Disbursements that are successfully delivered to a creditor, affirmatively rejected by that creditor, and returned to the trustee, are not, unclaimed property“ within the meaning of §347(a)

Good Day Sunshine…the beat goes on...and on...