Month: November 2015

Bankr. M.D.N.C.: In re Jeffries- Denial of Discharge


Uncontested evidence showed that the Debtor had failed to disclose the transfer of real property to her brother 15 days prior to the filing of her bankruptcy as well as the omission of ownership interests in an investment club and several bank accounts. While it was determined in a separate action that the transfer of the real property was subject to a pre-existing lien and had no equity, the Bankruptcy Administrator nonetheless sought denial of the Debtor’s discharge under both 11 U.S.C. §§ 727(a)(2)(A) and 727(a)(4)(a).

Denial of a Debtor’s discharge pursuant to § 727(a)(2)(A) requires a showing that that the debtor:
(1) transferred or concealed,
(2) his property,
(3) with the intent to hinder, delay or defraud a creditor,
(4) within one year before filing the petition.… Read More

Tagged with: , ,

Bankr. M.D.N.C.: In re Canuto- Sua Sponte Summary Judgment Denying Strip-Off based on Fixture Filing


The Debtors sought to strip-off the lien held by PSNC Energy for a HVAC unit as wholly unsecured based on the value of the real property. Without any answer by PSNC, the Court sua sponte held that based on the record, consisting primarily of the Proof of Claim filed by PSNC, that A UCC-1 fixture filing had been recorded within 20 days of installation of the HVAC unit and was, pursuant to N.C.G.S. § 25-9-334(d), entitled to a first priority, perfected purchase money security interest in the HVAC.

For a copy of the opinion, please see:

Canuto- Sua Sponte Summary Judgment Denying Strip-Off based on Fixture Filing Read More

Tagged with: , , ,

Bankr. M.D.N.C.: In re Lucero- Payment of Administrative Expenses Following Conversion from Chapter 13 to Chapter 7


The Court held that Harris v. Viegelahn, 575 U.S. ___, 135 S. Ct. 1829, 191 L.E. 2d 783 (2015) did not prevent a Chapter 13 trustee from paying administrative expenses funds held by the following conversion of the case to Chapter 7 pursuant to 11 U.S.C. § 1326(a)(2) and Bankruptcy Rule of Federal Procedure Rule 1019.


Attached to the application for fees was an affidavit from the debtor stating that she understood that the funds on hand could be returned to her but that she nonetheless wanted those funds sent to the her attorney. This makes it unclear whether the debtor’s attorney could compel the chapter 13 trustee to release funds to her in the face of an objection from the debtor.… Read More

Tagged with: , ,

Bankr. W.D.N.C.: In re Pace – Disallowance of Lien against Personal Property Securing Attorney’s Fees


In order to provide for attorney’s fees and allow for filing of a Chapter 7, Mr. Pace’s attorney took a voluntary lien against Mr. Pace’s motorcycle and boat for pre- and post-petition services.

The court reviewed this arrangement, finding that taking a lien for pre-petition services is not expressly prohibited, but strongly discouraged by the Bankruptcy Code and subject to “heightened scrutiny of the propriety of this type of fee agreement.” Under North Carolina Rule of Professional Conduct 1.8, a lien is permitted if the following safeguards are provided:

(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.… Read More

Tagged with: , ,

Bankr. M.D.N.C.: In re Novara- Uniform Transfer to Minors and Fraudulent Conveyances


Ms. Novara deposited a check from her mother for $10,000 into her child’s custodial account twenty-seven (27) days prior to filing Chapter 7 bankruptcy. The Trustee sought to set this aside as a fraudulent conveyance and sought summary judgment.

To prevail on a motion for summary judgment premised on a fraudulent transfer, pursuant to 11 U.S.C. § 548(a)(1)(B)(I), the Trustee must be able to meet four elements:

(1) the debtor must have an interest in the property;
(2) the transfer must have been made within two years before the date of filing the petition;
(3) the debtor must have received less than a “reasonably equivalent value” in exchange for the transfer; and
(4) the debtor must have been insolvent on the date that the transfer was made.… Read More

Tagged with: , ,

Bankr. E.D.N.C.: In re Ennis- Duty to Mitigate Stay/Discharge Violation


Mr. Ennis filed a Chapter 7 bankruptcy, including First Federal as a creditor. While First Federal did activate a bankruptcy block to discontinue past due notifications, its continued to send computer generated monthly statements to Mr. Ennis, listing the balance, accrued interest and amount past due. Mr. Ennis’ counsel did send notices to First Federal regarding the bankruptcy filing and the extent of the automatic stay, but did not describe any specific wrong doing. These notices were sent to First Federal at its street address, rather than its mailing address. First Federal also had difficulties with the U.S. Postal Service delivery to its street address.… Read More

Tagged with: ,

4th Cir.: Kingery v. Quicken Loans- Use of Credit Score in Denial of Loan


Ms. Kingery applied to Quicken Loans for a loan to refinance her home mortgage and gave permission for it to retrieve her credit reports. On May 3, 2010, Quicken Loan retrieved her tri-merge credit reports, which showed her credit scores and also that foreclosure had been commenced against her home. Based on the pending foreclosure, as shown by manually entered notes, Quicken Loans denied her refinance request. Subsequently, Quicken Loans transferred Ms. Kingery to its credit repair program. When that was unsuccessful, Quicken Loans sent Ms. Kingery a final denial letter on May 24, 2010, which, among other information, gave Ms.… Read More

Tagged with: ,