All posts in Chapter 13

Nice post by San Jose certified specialist Cathy Moran on the new rules.    In her post, Cathy has attached a very nice spreadsheet prepared by Chapter 13 Trustee Beverly Burden in Kentucky.  The spreadsheet identifies the rules changes that affect the chapter 13 practice.

BACKGROUND
On February 28, 2013, Michael & Maricar Santos (“Debtors”) filed a Chapter 7 voluntary petition.  On June 17, 2013, Debtors received a standard discharge.  The Chapter 7 case, however, remained open.

On October 4, 2016, Debtors filed a motion to convert case from Chapter 7 to 13.  On October 12, 2016, Trustee filed his opposition.  On November 2, 2016, Debtors filed a reply.  A hearing on the matter was held on November 9, 2016.  The hearing was continued to allow for additional briefing on the issue whether, and in what circumstances, a Chapter 7 case could be converted to a Chapter 13 post-discharge.  Debtor filed their response on November 18, 2016.  Trustee filed their response on November 29, 2016. Read more…

I understand that the “national form,” once approved will not be required in the Central District.  An article updating the progress on the new form is here.

The article is here.

MONROE, La (US Atty Office) – United States Attorney Stephanie A. Finley announced today that a bankruptcy attorney was sentenced to 34 months in prison for collecting filing fees from clients without informing the bankruptcy court.

Glay H. Collier II, 53, of Benton, La., was sentenced by U.S. District Judge Robert G. James on one count of bankruptcy fraud. He was also sentenced to three years of supervised release and ordered to pay $69,063.05 restitution. According to evidence presented at the November 10, 2015 guilty plea, Collier filed records into the bankruptcy court stating that he would accept “No Look” fees as payment for his services. The “No Look” fee caps attorney’s fees in bankruptcy proceedings to $2,800. In excess of that limit, Collier charged up to $281 in filing fees to some clients, which he did not disclose to the court. Between March 2010 and November 2013, Collier filed 983 Chapter 13 bankruptcy cases in Monroe, and during the same time period, he filed 2,160 Chapter 13 bankruptcy cases in Shreveport. In approximately 479 of these cases, Collier fraudulently collected and attempted to collect filing fees.

The FBI and the U.S. Trustee’s Office, Region 5, conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan prosecuted the case.

My sense is that Judge Watford should have referred to the creditor’s objection to Penrod’s 506b motion rather than its objection to her Plan’s confirmation.

By challenging the bankruptcy code’s ability to modify the vehicle loan, although if you don’t have car you can use Flex Fleet Rental services to rent cars to drive around you might want to check their website and find more information clasiq.com, the creditor was litigating enforceability of its contract as falling outside the scope of the code rather than acknowledge that it’s contact was subject to the code and fighting over how the code functions – like the more general modification of contract rights that are the focus of plan confirmation, relief from stay and such.

If you take Judge Watford’s premise that the contract rights were at play because of the creditor’s plan confirmation objection, then the only way to reconcile Bos and David’s RFS opinion is to view everything through the OJ Dream Team lense where the highest priced legal team prevail in court.

Best regards,
Peter

I thought I knew where we are on attorneys fees after the 9th Circuit ruled in In re Penrod that a creditor fighting with a debtor in a bankruptcy case, is an effort by the creditor to collect its debt form the debtor, and therefore an “action on the contract” and therefore, assuming there is a right to attorneys fees in the contract, the bankruptcy court can award attorneys fees to the debtor.

My friend Peter Lively was surprised to hear me say recently that I think that Penrod allows for attorneys fees to the debtor anytime the debtor defeats any creditor efforts in a bankruptcy case including stay relief motions, oppositions to plan confirmation, battles over property values, cash collateral, plan fights.  His sense was that since Penrod was over the issue of bifurcating a car loan, it didn’t necessarily extend out to everything else.  He promised to look into it further.

In Penrod Judge Watford wrote:

“Under California law, an action is ‘on a contract’ when a party seeks to enforce, or avoid enforcement of, the provisions of the contract.  AmeriCredit sought to enforce the provisions of its contract with Penrod when it objected to confirmation of her proposed Chapter 13 plan.”

“AmeriCredit insisted that it was entitled to have its claim treated as fully secured.  The only possible source of that asserted right was the contract—in particular, the provision in which Penrod granted a security interest in her Taurus to secure ‘payment of all you owe on this contract.’” Read more…

This is from the master himself, Aki Koyama

Over the years, I’ve found that MOMODS are more successful and much more easier to process and comment on when I have an opportunity to discuss the terms of the MOMOD before it is filed. This way, your client’s MOMOD will reflect what the Trustee’s data base shows for delinquency, infeasibility etc. Also, we can discuss what kind of evidence the Trustee will require for a modification or suspension. Finally, there may be times when you want to propose an unusual modification and want some feedback from the Trustee before you even draft the MOMOD.