The Phillips filed a Chapter 13 bankruptcy and successfully avoided the judgment lien held by McInnis. The Order allowing the avoidance provided that:
3. The Judgment lien of the McInnises is declared to be void and shall be removed of record upon the completion of the Chapter 13 Plan of the Debtors and entry of the discharge in this case pursuant to Section 506 of the Bankruptcy Code.
4. In the event the Debtors fail to complete their Chapter 13 Plan and receive their discharge, the McInnises’ lien shall remain unaffected as to Section 506(a) and (d) of the Bankruptcy Code by this order.… Read More
In his Chapter 7 petition, Mr. Fields listed a 1987 Porsche 911 as non-operational and worth $500. The Trustee, however, obtained a on-site appraisal, which found the vehicle to be operable and worth between $12,000 and $30,000. After the Trustee declined to object, Mr. Fields did receive his discharge, but was unable to buy the vehicle from the Trustee. Instead he sought to have his discharge revoked and to convert to Chapter 13.
Relying on In re Marrama, 549 U.S. 365 (2007), the bankruptcy court held that due to both Mr. Fields’ failure to accurately value to vehicle and since he lacked income sufficient to support a feasible Chapter 13 plan, conversion was not allowed.… Read More
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
The Chapter 7 Trustee discovered that the Female Debtor was the 50% beneficiary of her late father’s springing trust, with her share being worth approximately $100,000, that had not been listed in the petition. The Trustee also cam to believe, based on a valuation by a realtor, that real property valued at $10,000 by the Debtors was actually worth as much as $44,900. After discovery and belated disclosure of these, the Debtors sought to convert their case to Chapter 13, with the Trustee objecting. At the hearing on the conversion, the Male Debtor testified that he had based the value of the real property on the opinion of another realtor.… Read More
In addition to a misstatement regarding their residency in the Western District of North Carolina, the Debtors failed to disclose in their Chapter 7 petition that they had transferred real property to their daughter within one year of their bankruptcy filing. Upon discovery by the Trustee (and likely facing avoidance of the transfer) the Debtors sought to convert to Chapter 13, amending their petition to include the transfer and also including additional income from the Female Debtor.
Beginning from Marrama v. Citizens Bank of Massachusetts, and then heavily relying on In re Goines, 397 B.R. 26, 30 (Bankr. M.D.N.C. 2007) and In re Southern, 2011 WL 1226058, at *3 (Bankr.… Read More
Following conversion from Chapter 13, the Debtor sought to redeem a motor vehicle based on the NADA trade-in value from the commencement of the bankruptcy case. Finding that BAPCPA amendments in 2005 to 11 U.S.C. § 506(a)(2) abrogated the previous rule as stated in In re Murray, No. 00-10603, slip op. at 5-6 (Bankr. M.D.N.C. June 23, 2000), the bankruptcy court held that, absent contrary evidence, the proper value for redemption was 90% of the NADA retail value, adjusted for age and condition.
For a copy of the opinion, please see:
Griffin- Redemption following Conversion from Chapter 13.pdf… Read More
The Debtor’s Chapter 11 case was converted to Chapter 7, following a hearing, at which neither the Debtor nor Debtor’s counsel attended, based on testimony presented by the bankruptcy administrator elaborated on the basis of her motion to convert, that despite being granted generous opportunities for amendment, inaccuracies and confusion continued to plague the debtor’s monthly operating reports. Subsequently, the Debtor filed a Motion to Reconsider based on excusable neglect.
Based on the testimony of the debtor and his wife showing that the issues and inaccuracies plaguing his monthly operating reporting have been corrected and would be accurate in the future, as well as the Debtor’s counsel having taken responsibility for the absence of both at the first hearing, the Court rescinded the conversion of the case.… Read More
Conversion from Chapter 11 to Chapter 7 is governed by 11 U.S.C. § 1112(b), based on the best interest of the creditors and estate for cause, including:
(A) substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation;
(B) gross mismanagement of the estate;
(C) failure to maintain appropriate insurance that poses a risk to the estate or to the public;
(D) unauthorized use of cash collateral substantially harmful to one or more creditors;
(E) failure to comply with an order of the court;
(F) unexcused failure to satisfy timely any filing or reporting requirement established by this title or by any rule applicable to a case under this chapter;
(G) failure to attend the meeting of creditors convened under section 341(a) or an examination ordered under rule 2004 of the Federal Rules of Bankruptcy Procedure without good cause shown by the debtor;
(H) failure timely to provide information or attend meetings reasonably requested by the United States Trustee (or the bankruptcy adminstratot, if any)
(I) failure timely to pay taxes owed after the date of the order for relief or to file tax returns due after the date of the order for relief;
(J) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the court;
(K) failure to pay any fees or charges required under chapter 123 of title 28;
(L) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the court;
(M) inability to effectuate substantial consummation of a confirmed plan;
(N) material default by the debtor with respect to a confirmed plan;
(O) termination of a confirmed plan by reason of the occurrence of a condition specified in the plan; and
(P) failure of the debtor to pay any domestic support obligation that first becomes payable after the date of the filing of the petition.… Read More
The Debtor filed a voluntary Chapter 11 case, but PNC Bank, the largest unsecured creditor, moved to dismiss the bankruptcy. The Debtor moved to convert to Chapter 7. The Bankruptcy Administrator supported dismissal.
The Bankruptcy Court first found that und 11 U.S.C. § 1124(b)(4) there were sufficient grounds to convert of dismiss the case. In determining whether conversion or dismissal would be in the best interest of the estate, the Bankruptcy Court held, based on the Debtor’s admissions, that it would require at least six months to market and sell its assets, during which time a Chapter 7 Trustee would need to manage, rent and maintain the property, and based on PNC’s unwillingness to consent to the use of cash collateral, a Chapter 7 Trustee would have no funding to adminster such assets and would be forced to liquidate quickly.… Read More
The Debtor owned real property with her husband as tenants by the entireties, but then separated. Pursuant to a Separation Agreement, the Debtor signed a Quit Claim Deed granting the property to her husband in 2005 and the parties divorced in 2006. She later filed Chapter 13 on December 3, 2008, but, apparently unbeknownst to the Trustee, the Quit Claim Deed was not recorded until January 9, 2009, one day after the §341 Meeting of Creditors. The Debtor’s confirmed plan abandoned her interest in the property to the secured creditors. In 2010, she converted to Chapter 7 and the Trustee initiated an adversary proceeding to avoid the transfer under 11 U.S.C.… Read More