Jul 06
Bankruptcy GuideUncategorized
A creditor that provided financing within 910 days prior to the commencement of the debtors’ Chapter 13 case to enable the debtors to purchase a motor vehicle for their personal use did not have a “purchase money security interest” in this newly acquired vehicle, and was not protected by the “hanging paragraph” from having its claim bifurcated for purpose of cramming down a plan, to the extent that the funds advanced included a sum for the payoff of the debtors’ negative equity in a trade-in vehicle. While payoff of the prior car loan as part of the new motor vehicle financing transaction was certainly convenient for both the creditor and debtors, and while the creditor might not have been willing to loan money for the new car vehicle stop repossession dallas unless the old loan was paid off, the payoff of negative equity in the trade-in was not necessary for the debtors to acquire rights in the new vehicle in the same manner as other items listed in the Official Comments to the Kansas Uniform Commercial Code (UCC), nor were the sums that the creditor advanced to pay off negative equity in fact used to buy the new vehicle.
Jul 06
Bankruptcy GuideUncategorized
A Chapter 13 debtor who had chosen not to provide for a secured creditor in the plan that was ultimately confirmed, thereby enabling the creditor to successfully move for relief from the stay to exercise its rights in the nonresidential real property that secured its claim, could not utilize a postconfirmation modification in order to create a new secured creditor class consisting of this creditor, in an attempt to prevent the creditor from exercising its state law rights. Even ignoring the fact that the motion to modify the plan was not properly served, and even assuming that the debtor could modify a confirmed plan with no showing of any substantial, unanticipated change in his circumstances, use of a postconfirmation modification to create a new secured creditor class was not one of the three statutorily permissible justifications for such modifications. Thus, the plano dallas bankruptcy debtor was bound by the terms of his confirmed plan.
Jul 06
Bankruptcy GuideUncategorized
The Internal Revenue Service (IRS) was not entitled, based on the equities of the case, to exercise a right of setoff, nor was it entitled to stay relief for purposes of setting off, against federal income tax bankruptcy dallas refunds in which the Chapter 13 debtor, without any objection by the IRS or request for an extension of time to object, had claimed a “wildcard” exemption. The IRS had not exercised these setoff rights before the debtor filed for bankruptcy and claimed the refunds as exempt. Moreover, the debtor had no homestead, so that the “spillover” amount of the “wildcard” exemption represented the most significant exemption available for the protection of the debtor and his family.
Jul 06
Bankruptcy GuideUncategorized
The failure on the part of a law firm that was not retained to collect a discharged prepetition debt until roughly one year after the discharge order was entered to routinely check the electronic court filing system to see whether the debtor may have obtained a discharge of her debts in bankruptcy did not warrant imputing to the law firm the knowledge that such a search would have disclosed, for purpose of holding the bankruptcy law firm in contempt for obtaining a state court judgment on the discharged debt and of awarding sanctions against the firm for violating the discharge injunction. The bankruptcy court could not award damages for violations of the discharge injunction that were technical or inadvertent and did not rise to the level of contempt.
Jul 06
Bankruptcy GuideUncategorized
The so-called “fourth option,” under which a debtor may retain collateral securing a creditor’s claim without redeeming it and without reaffirming the underlying debt, simply by continuing to make his or her regular monthly payments thereon, was not eliminated, at least not completely eliminated, by amendments enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This “fourth option” could be utilized by Chapter 7 debtors who had attempted to reaffirm their debt to a motor vehicle lender, and who had entered into a reaffirmation agreement with the lender prior to the expiration of the 45-day period specified in these amendments, but whose agreement was not approved by the bankruptcy dallas court as constituting an undue hardship on the debtors. As long as the debtors remained current in their payments, the lender could not repossess the vehicle post bankruptcy.
Jul 06
Bankruptcy GuideUncategorized
While it appeared that a Chapter 13 plan, as filed, was not sufficiently funded to permit performance of the debtor’s obligations thereunder, once the bankruptcy court generally allowed a proof of claim filed by a mortgagee, a bankruptcy court would exercise its discretion not to dismiss the case, in which the debtor had timely made every $600 plan payment, until the debtor was given an opportunity to amend the plan to pay the mortgagee’s allowed claim, as found by the court, plus other necessary claims and the trustee’s commission. A Dallas bankruptcy attorney court has considerable discretion in determining whether “cause” exists for dismissal of a Chapter 13 case and whether dismissal is the appropriate remedy.
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