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 declared a second priority lien on the Chapter 13 Debtor's real property an unsecured claim for the pendency of the case, but declined to declare the lien void until the Debtor received a discharge.
The court granted the U.S. Trustee's motion to dismiss pursuant to 11 U.S.C. section 707(b) because the Debtor's case constituted substantial abuse. The court considered that the Debtor could pay more than 28% of his scheduled unsecured debt over a thirty-six month plan, the filing was not due to some unforeseen tragedy, the Debtor and his wife incurred consumer obligations far beyond their ability to pay and their household expenditures were excessive, and that the Debtor materially understated his wife's income, albeit unintentionally.
Court conditionally granted the United States Trustee's motion to dismiss the debtor's case for substantial abuse under section 707(b). USTE alleged that debtors incurred excessive consumer debt at a time when they were not paying their existing consumer debt obligations and that they understated their petition date income in their schedules. After analyzing the In re Green factors and In re Harrelson, Court held that the ability to repay is the primary factor to be considered in a substantial abuse case. Court found that debtors did not have meaningful ability to pay their unsecured debt if they did what their statement of intention indicated (pay mortgage debt, vehicle debt and furniture debt). However, the debtors had not reaffirmed such debt. Filing was found to be abusive as to several obligations incurred prior to filing bankruptcy. Court denied the USTE's motion upon the condition that the debtors execute and file reaffirmation agreements for certain obligations. If the debtors failed to reaffirm such debt or convert their case to chapter 13 within the required time, then the case will be dismissed. Case controlled by law in effect prior to adoption of BAPCPA.
The Chapter 7 trustee filed a motion for turnover of a vehicle to the bankruptcy estate pursuant to 11 U.S.C. §§ 521(a)(4), 542(a). Although the certificate of title for the vehicle showing a lien on the face of the certificate serves as notice of the lien pursuant to Va. Code § 46.2-638, it does not prove the existence of that lien. The showing of the lien on the certificate of title only provides notice that a lien may exist and invites inquiry by the fact-finder as to its validity. Accordingly, the Court held that the vehicle is property of the estate until proven otherwise and must be turned over to the trustee.
The court held that the Debtors' interest in real property (the equity of redemption) became property of the estate when the Debtors filed bankruptcy after a foreclosure sale but before a memorandum of sale was prepared. A foreclosure sale is final when "the trustee knocks the land down to the bidder, makes a memoradum of the sale and its terms, and signs the same." Rolen v. Southwest Virginia National Bank, 39 B.R. 260, 264 (Bankr. W.D. Va. 1983).
A secured creditor filed a motion for relief from the automatic stay of 11 U.S.C. § 362 because the Debtors did not make a balloon payment as required under the original contract, and instead, made monthly installment payments as provided for under their confirmed Chapter 13 plan. 11 U.S.C. § 1327(a) provides that once a plan is confirmed, the debtor and each creditor are bound by the terms of the plan, regardless of whether the plan provides for the creditor's claim, and regardless of whether such creditor has raised an objection, accepted, or has rejected the plan. See 11 U.S.C. § 1327(a). Accordingly, the Court denied the creditor's motion for relief, finding that the plain language of the Debtors' Chapter 13 plan sets the amount to be paid to the creditor for the length of the plan and the balloon payment was not included in the language of the plan. The creditor will still retain a lien on the collateral for the amount of the claim not paid under the plan, until their allowed claim is paid in full; however, the plan sets forth the terms and amount of payment for the claim.
Incarcerated debtor's case dismissed under section 109(h) as debtor did not receive credit counseling and failed to file certificate of exigent circumstances or statement that he requested counseling and it was not available.
The Plaintiff sought a declaration that debt incurred in a separation agreement is nondischargeable under 11 U.S.C. § 523(a)(5). The Court characterized debt incurred in the separation agreement as a part of a property settlement, and not alimony, maintenance, or support, due to: (1) the designation of the obligation as being in lieu of spousal support; (2) the relative incomes and wealth of the parties; (3) the fact that any payments would not be deductible by the Defendant or taxable to the Plaintiff; (4) the number and duration of payments; and (5) testimony of the parties that the obligation was intended to offset against Plaintiff’s obligation to pay credit card debt. As such, the Court found the subject debt to be nondischargeable.
The court held that the settlement amount from a state court action for libel, malice and negligence was within the definition of personal injury, so as to be exempt property in bankruptcy.
The court denied Plaintiff's motion for default judgment and granted the Debtor an extension of time to file responsive pleadings because the Debtor's counsel missed the court's deadline because of excusable neglect. The court considered the lack of prejudice to the Plaintiff, the lack of material delay, and the fact that the Plaintiff had similarly benefited from the court's exercise of discretion.