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.
Court sustained objection to proof of claim by order only as the confirmed plan did not provide for the treatment of such claim as a secured or partially secured claim and plan was not objected to; therefore its provisions were binding upon the creditor pursuant to Section 1327(a). Court disallowed creditor's claim as a secured claim and allowed it as general unsecured claim.
The United States Trustee filed a motion to dismiss pursuant to 11 U.S.C. § 707(b)(3). The court addressed whether Social Security income should be taken into account in the § 707(b)(3) “totality of the circumstances” test. The court concluded that the debtors’ “financial situation” provided them the ability to make a meaningful settlement with their unsecured creditors without sacrificing their standard of living or exhausting the male debtor’s Social Security benefit to do so. It further concluded that not to require that of them in order to obtain a discharge of their remaining legal liability to their creditors, when their financial predicament is the predictable result of their continued excessive consumer spending and borrowing rather than one precipitated by some unforeseen external event or calamity, would constitute an abuse of the provisions of chapter 7.
The chapter 11 trustee objected to the debtor’s exemption of two IRA accounts owned by the debtor when the case was filed. The court concluded that the debtor lost the right to claim as exempt the proceeds of the smaller of the two IRA accounts by reason of his failure to disclose the existence of such account or to claim any exemption in it until after the funds in that account had lost their eligibility to be deposited into a new qualified IRA account, but that § 522(b)(4)(D) applied and secured his effort to maintain his claim of exemption in the larger account.
The debtor filed a motion to seek a discharge of her student loan debt under 11 U.S.C. § 523(a)(8). The parties agreed that in order for the debtor’s loans to be discharged under section 523(a)(8), the debtor must establish by a preponderance of the evidence that the repayment of her student loans would be an undue hardship. The court analyzed the evidence under the Brunner Test. The court concluded that the debtor had failed to establish the second prong of the Brunner Test and was not entitled to an immediate discharge of her student loans. However, under the circumstances, the court concluded that if the debtor enrolled in the income based repayment plan, fulfilled her obligations under that plan, and still had an amount due and owing at the end of the repayment period, the amount due and owing at the end of the repayment period would be an undue hardship under section 523(a)(8) and would be discharged prior to any forgiveness granted by the Government pursuant to 20 U.S.C. § 1098e(b)(7).
The debtor moved for entry of a default judgment avoiding a second deed of trust lien upon the debtors’ residence on the basis that the amount of the indebtedness secured by the first deed of trust against such property exceeded such property’s value. The court denied the motion on the basis that such relief is not consistent with controlling precedent as set forth in the Fourth Circuit’s Ryan v. Homecomings Fin. Network (In re Ryan), 253 F.3d 778 (4th Cir. 2001).
The debtor filed a motion to extend the stay pursuant to 11 U.S.C. § 362(c)(3), and two creditors objected. The debtor entered into an agreement with one creditor to extend the stay based on certain conditions. The debtor did not meet those conditions. The court concluded, “with considerable disquiet,” that it had to deny the debtor’s oral motion to reimpose the automatic stay and leave him with the consequences of the agreement which he made in order to avoid a contested hearing before the court on his motion to extend the automatic stay.
The debtor filed an application to approve employment of counsel following the appointment of a chapter 11 trustee, that is after the debtor was no longer a debtor in possession. The application provided that he would seek payment, at least in part, from assets of the estate. The court noted that if counsel for the debtor in either a chapter 7 or chapter 11 case is not employed pursuant to § 327, then the court may not award compensation to such counsel from the assets of the bankruptcy estate. The court thus denied the application for employment.
The plaintiff filed a complaint seeking a monetary judgment against the debtor and also a declaration that any such judgment would be non-dischargeable under 11 U.S.C. § 523(a)(2), (4) and (6). The debtor did not contest the debt owed, and thus the court entered judgment in the amount of $413,324.75. A judgment had already been entered in the debtor’s case denying him a discharge; therefore, the court held that the dischargeability action was moot.
The debtor filed a complaint requesting the court determine who held a note, the validity and extent of any secured deed of trust, the current balance of the lien, and to disallow any unauthorized fees and unlawful interest charges, to award attorneys’ fees and costs. One defendant filed an answer with affirmative defenses and a motion to dismiss for failure to state a claim upon which relief could be granted. The court found that the complaint simply stated certain legal conclusions unsupported by any allegation of facts constituting the basis for such conclusions. Accordingly, the court sustained the motion to dismiss but granted leave for the debtor to amend the complaint.
Lee Bank and Trust filed an adversary proceeding seeking a determination of non-dischargeability of certain debts owed to it by the debtor pursuant to 11 U.S.C. § 523. The debtor filed a motion to dismiss which raised three defenses: first, a plea of the Virginia statute of limitations applicable to causes of action for fraud; second, that any claim based on allegedly false financial statements was on its face without merit because the financial statements in question were joint statements of the debtor and his wife although only the debtor was an obligor on the loans made; and third, that the count asserting that the debtor maliciously and intentionally converted some of the collateral is defective because it fails to allege any value for such converted collateral and therefore any cognizable damages resulting from the claimed conversion. The court overruled the first two and sustained the third but allowed the bank to file an amended complaint to cure the deficiency.