In re Bowman (M.P. No. 07-00701) 12/20/2007
Respondent's motion requesting recusal of judge from show cause hearing pursuant to 28 U.S.C. section 455 denied.
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Respondent's motion requesting recusal of judge from show cause hearing pursuant to 28 U.S.C. section 455 denied.
The debtors filed an application for a hardship discharge under 11 U.S.C. § 1328(b) and (c). After confirmation of the debtors' Chapter 13 plan, the female debtor was diagnosed with a rare, chronic autoimmune neuromuscular disease which caused her to quit her job due to the resulting muscle weakness. Under Section 1328(b), Chapter 13 debtors can obtain a discharge after confirmation even though complete payments under the plan have not been made, so long as the debtors show that the following three essential criteria are satisfied: (1) the failure to complete plan payments is due to circumstances for which the debtors cannot justly be held accountable; (2) the value of property distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and (3) modification of the plan is not practicable. See 11 U.S.C. § 1328(b)(1)-(3). The Court denied the debtors' application for a hardship discharge, holding that although the female debtor's illness was an unforeseeable economic circumstance, the debtors have failed to establish that they have made every effort to overcome their situation by failing to present evidence that would preclude the possibility of improvement in the female debtor’s health or the possibility of finding suitable alternative employment.
The Court held that certain property is not and never was property of the bankruptcy estate and that the Chapter 7 Trustee may abandon any interest that the estate may have in such property.
Claimant cannot seek relief from stay under section 362(b) or 362(d) to enforce portion of divorce decree obligating the debtor for all indebtedness associated with a vehicle because payment to the creditor on the vehicle was not a domestic support obligation as defined in section 101(14A) of the Bankruptcy Code.
Court sustained debtor's objection to claim where the claim was based upon a provision in a divorce decree requiring the debtor to pay a joint debt to a bank. The debtor was not ordered to pay the amount directly to the claimant. Where the debtor has no obligation to pay the claimant, the claimant does not have an allowable claim against the debtor under section 101(5).
Court denied, without prejudice to the filing of a supplemental application, the third interim application for compensation and reimbursement of expenses of the trustee's attorney. It is within Court's sound discretion to decline to award compensation until all relevant circumstances and factors affecting the determination of fair and reasonable compensation for the attorney are known. Court also questioned the firm's entitlement to any compensation for litigation in light of the failure of the trustee to seek approval of the Court for the firm's retention to provide such services.
Debtors' application for waiver of filing fee under section 1930(f) denied as debtors had the financial means to pay the filing fee at the time of filing the petition. The debtors no longer had the funds on hand at the time of the hearing on the application. The Court found that to waive the filing fee for debtors who had, at the time of filing their application, the ability to pay the filing fee, but elected to use such funds beyond the immediate necessary support of themselves and their dependents, would constitute an abuse of the bankruptcy system.
The Court held that additional paragraphs added by the debtor to Paragraph 11 of the Uniform Plan do not contain provisions peculiar to debtor's financial situation and instead are unnecessary and is likely, if applicable, to increase the costs of administration and litigation. Further, if the language in Paragraph 11 is an inaccurate statement of law, it violates 11 U.S.C. § 1322(b)(11), which prohibits against including any provision that is not consistent with the Bankruptcy Code. Therefore, the Court sustained the Chapter 13 trustee's objection to confirmation of debtor's plan and held that such additional paragraphs must be deleted from the Chapter 13 plan before confirmation or else they would require the Court to adjudicate matters that are not yet before it.
The Court held that additional paragraphs added by the debtor to Paragraph 11 of the Uniform Plan do not contain provisions peculiar to debtor's financial situation and instead are unnecessary and is likely, if applicable, to increase the costs of administration and litigation. Further, if the language in Paragraph 11 is an inaccurate statement of law, it violates 11 U.S.C. § 1322(b)(11), which prohibits against including any provision that is not consistent with the Bankruptcy Code. Therefore, the Court sustained the Chapter 13 trustee's objection to confirmation of debtor's plan and held that such additional paragraphs must be deleted from the Chapter 13 plan before confirmation or else they would require the Court to adjudicate matters that are not yet before it.
The matter before the Court is a motion for summary judgment based on the debtor's motion to avoid a consensual second priority lien on her residence under 11 U.S.C. §§ 506(a) and 1322(b)(2), which permit a chapter 13 debtor to modify the rights of holders of claims secured by the debtor's principal residence only if all other senior liens on the property are greater than the value of the residence. The fair market value of the debtor's residence is $102,000. There are two liens on that property: a first priority lien in the amount of $47,000 and a second priority lien in the amount of $10,000. The value of the property is greater than both liens on the property. Accordingly, the debtor cannot modify the rights of the creditor by avoiding the second priority lien on the property.