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By Ed Boltz, 13 February, 2012

Bankr. E.D.N.C.: In re Henries- Whether Abandonment of Property by Chapter 13 Trustee is Binding on later Chapter 7 Trustee

Summary: 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
By Ed Boltz, 30 January, 2012

Bankr. E.D.N.C.: In re Boyette- § 707(b)(3) following Conversion

Summary: The Debtor filed Chapter 13 in 2009, subsequently converting to Chapter 7 on May 9, 2011.  This conversion was one day prior to a hearing to determine the status of the claim of the Debtor’s ex-wife, Ms.  Day. Ms.  Day argued that the conversion was only done in an attempt to avoid paying her claim through the Debtor’s Chapter 13 plan, which otherwise only required $21.50 to complete.   Additionally, Ms.  Day alleged that the Debtor self-reported environmental hazards on their property, in an effort to reduce the value.  Accordingl
By Ed Boltz, 15 December, 2011

Bankr. E.D.N.C.: In re Harper- Denial of Motion to Convert from Chapter 7 to Chapter 13 Due to Bad Faith

Summary: The Chapter 7 Debtors failed to disclose in their petition their interests in various real estate partnerships and multiple foreclosure proceedings, which the Chapter 7 Trustee discovered through reviewing the Debtors’ tax return and public records.  The Debtors then sought to convert to Chapter 13 and the Chapter 7 Trustee objected. The Court held the Debtors  initial schedules were so misleading as to give rise to an inference  of bad faith, which in turn prevents conversion. Marrama v. Citizens Bank of Massachusetts, 549 U.S.
By Ed Boltz, 30 November, 2011

4th Circuit: McDow v. Dudley- Denial of Motion to Dismiss Pursuant to 11 U.S.C. § 707(b) is an Appealable Final Order

Summary: The Debtors filed a Chapter 13 bankruptcy in 2008.  Following a Motion to convert or dismiss the case filed by the Chapter 13 Trustee, the Debtors voluntarily converted to Chapter 7.  The U.S. Trustee sought dismissal of the case pursuant to 11 U.S.C.

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