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Rhyne v. Rhyne (In re Rhyne) (Case No. 09-72100; A.P. No. 15-07013) 9/24/2015

The debtor filed a complaint against his two brothers, personal representatives of the estate of their mother, seeking entry of an order to permanently suspend any attempt to collect on a debt, to enjoin the continuance of a suit filed in state court and to enjoin the estate from offsetting a discharged debt from the debtor’s inheritance.  The debtor requested the court hold the defendants in contempt for their willful violations of the discharge order and injunctive provisions of section 524. 

Prior to filing bankruptcy, the debtor's mother loaned him $87,000.  This amount was listed in debtor's schedules and the Court granted the debtor a discharge.  Nearly two years later, the mother executed her will listing the outstanding loan.  The defendants later sought to administer the will, to determine how much of the loan remained unpaid and to take into account the amount of the outstanding loan in the final distribution so that the children would each receive an equal share of her estate, but the debtor claimed that such attempt would be a violation of the Bankruptcy Court's discharge order. 

The Court, treating the motion to dismiss as a motion for summary judgment under Rule 7056, held that the state court action, which seeks to administer the will, did not violate the discharge injunction and dismissed the complaint.  The Court concluded that the defendants were not seeking to collect an obligation owed by the debtor, but merely seeking to carry out the intention of the mother as expressed in her will.  Thus, the filing of the state court petition to administer the will was not an act to collect a debt, but merely a request to the state court to interpret the provisions of a will.

Date: 
Thursday, September 24, 2015
Category: 
Adversary Proceedings
Discharge Injunction
Chapter: 
7