Mr. Matusak’s plan provided, obviously among things, that he was required to produce verified updated Schedules of income and expenses during the 36 months Applicable Commitment Period of his plan whenever such were requested by the Chapter 13 Trustee or Ms. Brown, his ex-wife and a creditor. Based on that financial information, Ms. Brown filed a motion to modify Mr. Matusak’s plan in November 2016, seeking both an increase in the monthly payment and an extension of the plan from 36 to 60 months.
Prior to the hearing on the Motion to Modify in April 2017, Mr. Matusak made the 36th payment under the original confirmed plan and argued that, the bankruptcy court no longer had authority to modify his plan as 11 U.S.C.… Read More
After the sale of her home, Ms. Smith sought a plan modification to discontinue disbursements on the mortgage, which had until that point been paid as a conduit. The Chapter 13 Trustee requested that Ms. Smith provided amended Schedules I and J or other evidence of current income and expenses. This request was refused and the Trustee objected to the modification.
Starting from In re Arnold, 869 F.2d 240 (4th Cir. 1989) the bankruptcy court held that a post-confirmation required the following:
1. A showing of a “substantial and unanticipated change in circumstances”;
2. That the modification was for one of the purposes allowed under 11 U.S.C.… Read More
The Royals sought to modify their Chapter 13 plan to surrender a 15-year old motor vehicle that was increasingly expensive to maintain due to mechanical problems. The court denied this modification, first finding that the Royals had provided not evidence of a substantial and unanticipated change in financial circumstances beyond these mechanical problems. Following Chrysler Financial Corp. v. Nolan (In re Nolan), 232 F.2d 528, 532-33 (6th Cir. 2000), the court held that that 11 U.S.C. § 1329(a) allows for a reduction in the payment of claims but not for a reduction or modification of the claim itself.
AS the Royal opinion notes, following In re Miller, 2002 WL 31115656 (Bankr.… Read More
After the filing of a Chapter 13 bankruptcy, Mr. Nevils received a lump-sum Worker’s Compensation award of $235,000. Over the Trustee’s objection, the bankruptcy court previously allowed Mr. Nevils’ exemption of the proceeds, without ruling at that time on whether such constituted disposable income. The Trustee, supported by the Bankruptcy Administrator, then brought a motion to modify, arguing that even though exempt, the award constituted a substantial and unanticipated change in circumstances and should be considered in calculating Mr. Nevils’ disposable income.
The bankruptcy court rejected this argument, finding that 11 U.S.C. § 522(c) provides “property exempted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such debt had arisen before the commencement of the case….” Relying on Judge Doub’s opinion from In re Daniels, the bankruptcy court held that “[t]he clear language of [§ 522(c)] protects exempt property, regardless of form, from prepetition debts…[t]his express limitation cannot be ignored for purposes of defining disposable income under [§ 1325(b)]”).… Read More
Confirmation of the Debtor’s Chapter 13 plan was delayed for 15 months due to an adversary proceeding to cram-down a residential mortgage held by JPMorgan Chase. Following dismissal of the adversary proceeding, the Debtor proposed a plan that would have run for 60 months from confirmation. Because that plan would have run for a total of 75 months from the first §341 Meeting of Creditors, the Trustee objected.
Finding that this issue had already been addressed by the 4th Circuit in West v. Costen, 826 F.2d 1376, 1378 (4th Cir. 1987), the bankruptcy court held that “he applicable commitment period cited in § 1329(c) begins with the first payment made under a confirmed plan and not the first payment due under a proposed plan, which is typically due within one month of filing the petition.” This is still subject to the other requirements of § 1329, including good faith, but any delays in the adversary proceeding were “not fully or even mostly the debtor’s fault” and the Trustee’s failure to engage had further delayed that proceeding.… Read More
Following a objections to a Chapter 11 plan by the bankruptcy administrator, First Citizens Bank and other creditors, the Debtor negotiated confirmation, which provided, in part pertinent to this decision, that it would be allowed 11 months to actively market and sell to parcels of real property, against which First Citizens held liens. Failure to sell the collateral during that time would allow First Citizens to foreclose. As this period drew towards an end and no sale was imminent, the Debtor, after failing to renegotiate terms with First Citizens, brought a motion to modify the plan, seeking to release some of the property in a “partial dirt for debt”, to which First Citizens objected.… Read More
Around the time of the Confirmation of the Debtors’ plan, the Male Debtor was injured in a motor vehicle accident. Subsequently, he amended his schedules to disclose the personal injury claim and his exemptions to claim the d claimed the full $10,379.35 settlement as exempt property per N.C.G.S. § 1C-1601(a)(8). The Trustee failed to object to the exemption but did seek to have this amount determined to be disposable income.
Relying heavily on In re Graham, 258 B.R. 286 (Bankr. M.D. Fla. 2001), the bankruptcy court disagreed, holding that had “Congress intended ‘disposable income’ to include post-petition exempt personal injury proceeds, Congress could and should have explicitly said so in §§ 1306 and 1325.… Read More
The Debtors moved to modify their Chapter 13 plan, surrendering two pieces of real property and seeking to reduce their plan payment to the lowest amount possible to pay a 100% dividend to unsecured creditors over a total period of 60 months. The Chapter 13 Trustee objected, seeking a higher monthly payment, which would have repaid the debts over a shorter period of time, on the basis that the Winns could afford the higher monthly payment. This higher payment would have been feasible except for the proposed housing rent and the retention of a piece of real property in South Carolina.… Read More