The summaries on this website are summaries of the opinions issued by the judges of the Bankruptcy Court for the Western District of Virginia from October 2004 to date. The opinions may be searched by year, judge, category and chapter. For a more detailed search, enter a keyword in the search box above. This opinion bank, however, is not an exhaustive list of opinions issued by the judges of the Western District. These summaries are not intended to replace other research methods, but may be used as a starting point for your research. These summaries do not contain information as to whether an opinion has been published, appealed or the disposition of any such appeal, or otherwise overruled or affected by subsequent case law or statute. These summaries have been prepared for the convenience of the researcher and in no way constitute an interpretation by the Court of the opinion summarized. Please rely on the opinion not the summary. Please contact Judge Connelly's chambers or Judge Black's chambers regarding any questions or errors.
The court determined that where debtor’s wages were subject to pre-petition garnishment, only wages earned by the debtor within the preference period which are subject to the lien of a fieri facias would be regarded as preferential payments and thus be avoidable by the trustee under 11 U.S.C. § 547(b).
Debtors wished to take a deduction on line 43 of Official Bankruptcy Form 22C for expenses relating to their daughter’s participation in a children’s choir. The chapter 13 trustee objected, arguing that the plain wording of the instructions for line 43 and the wording of 11 U.S.C. § 707(b)(2)(A)(ii)(IV) foreclose such a deduction. The court sustained the objection, citing Congress’s choice of language to limit the exemption to funding a child’s education at a primary or secondary school, not for extracurricular activities.
The Court approved, subject to conditions, the sale of the debtor's residence and certain personal property located on the premises and purportedly owned by the debtor's daughter. The Court required that one half of the allocated proceeds from the sale of the personal property be escrowed pending testimony from the debtor's daughter or her submission of an affidavit establishing her ownership of such property and the value assigned to it in the contract. After further testimony, the Court concluded that, as to some of the property, the requisite delivery of such property to constitute a completed gift under Virginia Code section 55-3 never occurred and that such property remained the property of the debtor at the time of the sale. Therefore, the Court directed that the proceeds continue to be held in escrow pending determination of the net proceeds of the sale of the real estate remaining after satisfaction of the mortgage indebtedness encumbering it and the expenses of the sale.
The Court previously approved the sale of real estate and personal property purportedly owned by the debtor’s daughter, but conditioned its ruling by providing that one-half of the allocated proceeds to the personal property would be escrowed pending evidence establishing the daughter’s ownership of such property. Where there was no evidence that the property in question was ever possessed by the debtor’s daughter, the Court held that the remaining proceeds allocated by the contract to the personal property shall continue to be held in escrow. The Court held that property owned by the debtor's daughter was not legally hers, as of the time of its purported sale, to the exclusion of any interest of her mother or her mother's creditors.
Debtors' counsel filed an application for compensation. The court examined 11 U.S.C. § 330 to determine reasonable compensation. The court also considered the twelve factors identified by the Supreme Court. The Court determined that the fees charged were reasonable and granted the fee application.
Where debtor's counsel filed a motion to withdraw as counsel but previously initiated two adversary proceedings in this case which were still left to be litigated, the Court allowed counsel to withdraw on the condition that counsel remain as a special bankruptcy counsel to the debtor to make arguments on her behalf at hearings, or in adversary proceedings related to this case, about the proper interpretation and application of governing bankruptcy law, or to assist her new general bankruptcy counsel, if any, in doing so until this case is concluded.
Debtor’s counsel filed a motion to withdraw as counsel under Local Rule 2091-1 citing a possible conflict between his professional duties to his client and his responsibilities as an officer of the Court. The court granted the motion, subject to limitations. Debtor’s counsel was required to remain as special bankruptcy counsel to the Debtor to make arguments on her behalf about the proper interpretation and application of applicable bankruptcy law or to assist her new bankruptcy counsel, if any, in doing so as necessary, or until the case has concluded or the Debtor notifies him of her desire to terminate his continued limited representation.
Court determined that the debtor’s chapter 13 plan was not proposed in good faith as required by 11 U.S.C. § 1325(a)(3) and § 1325(a)(7) and was, in fact, filed with the intention to have his equitable distribution obligations to his ex-wife minimized to the extent they could not be avoided. The court sustained the objection to confirmation of debtor’s proposed plan but also sustained debtor’s objection to the creditor/ex-wife’s proof of claim that his court-ordered obligations to her should have priority, finding that the debt was not classifiable as a domestic support obligation as defined in § 101(14A).
Debtors sought to avoid the lien of StellarOne Bank. StellarOne opposed the complaint. 11 U.S.C. § 1322(b)(2) states that a chapter 13 may modify the rights of holders of secured claims, other than a claim secured only by a security interest in the real property that is the debtor’s principal residence. Case law provided that a chapter 13 debtor may avoid a wholly unsecured lien on his residence of a second deed of trust if the amount of the first deed of trust is greater than the fair market value of the property. The parties disagreed as to the fair market value of the Subject property.
Creditor filed an amended proof of claim for a deficiency after the bar date, and objected to Trustee's Final Report because it did not provide for its unsecured deficiency claim. Court held that although the creditor did not timely file its deficiency claim, untimely amended claims may be allowed if the trustee has sufficient notice of the claim and the trustee has not yet made a distribution to creditors. Court found that under the circumstances of this case, the creditor's delay in filing the deficiency claim was justified; accordingly, the Court allowed the creditor's deficiency claim.