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 a husband and wife who filed a joint petition are each entitled to a separate homestead exemption under Virginia law, but neither may claim exempt property that is solely the property of the other.
The court denied the U.S. Trustee's motion to dismiss the Chapter 7 case for substantial abuse, because the Debtors could not pay even 5% of unsecured claims in a Chapter 13 plan, child care and medical expenses contributed to the filing, the Debtors did not spend or budget excessively, and the Debtors' schedules were accurately filed.
The Chapter 7 trustee objected to the debtors’ claim of homestead exemptions, arguing that the debtors failed to comply with the requirements of Va. Code § 34-17 by not recording the homestead deed until six days after the debtors’ meeting of creditors. Under Va. Code § 34-17, “[t]o claim an exemption in bankruptcy, a householder . . . shall set such real or personal property apart on or before the fifth day after the date of the meeting held pursuant to 11 U.S.C. § 341, but not thereafter." Each debtor executed a homestead deed for recordation and the debtors' counsel mailed the properly executed deeds to the Clerk of Pulaski County Circuit Court. Unbeknownst to the debtors' counsel, Pulaski County adopted a local rule which required that a cover page accompany deeds, therefore, the deeds were sent back to counsel because they were not accompanied by cover pages. Debtors' counsel then added the required cover pages and hand delivered the documents to the Clerk on the sixth day after the meeting of creditors. The Court found that the debtors’ homestead deeds were valid pursuant to § 34-17, even though it wasn't recorded until the sixth day after the meeting of creditors because the under Virginia law, the homestead deed need not be admitted to record for property to be "set apart in bankruptcy"; rather, a debtor has "set apart" property claimed as exempt once the debtor has delivered a properly executed deed, with fees, paid, to the appropriate clerk. See In re Nguyen, 226 B.R. 547, 551 (Bankr. E.D. Va. 1998).
Creditor objected to confirmation of the debtor's modified Chapter 13 plan. The issue is whether a debtor may, through the provisions of a Chapter 13 plan, modify a creditor's claim that is secured only by an interest in a mobile home and land upon which it rests. Under 11 U.S.C. § 1322(b)(2), a Chapter 13 plan may not modify (1) a secured claim (2) that is the debtor's principal residence (3) that is secured only by an interest in real property. The first two requirements are easily met. The third, however, presents the issue of whether the land and the mobile home, taken together, constitute "real property" as that term is used in Section 1322(b)(2). The Court held that the debtor’s mobile home and land, taken together, does constitute real property that is the debtor’s principal residence. As such, the debtor’s plan may not modify the creditor’s rights in the mobile home and land; the creditor's objection is sustained.
The court denied the Chapter 7 Trustee's application to employ counsel, which was made after the case was converted to Chapter 13, because the Debtor has a one-time right to convert unless ineligible under Chapter 13 and the Trustee conceded eligibility.
The court granted the U.S. Trustee's motion to dismiss the Chapter 7 case for substantial abuse because the Debtors had the ability to repay between 62-72% of unsecured claims, the filing was not occasioned by an unforeseen tragedy, the Debtors' budget was excessive, and the Debtors' schedules were materially inaccurate (despite a lack of intent to mislead).
The court granted the plaintiff's motion for summary judgment denying discharge, because the Debtors knowingly and fraudulently made a false oath in connection with their bankruptcy case by not disclosing the transfer of a travel trailer for no consideration to the Debtors' children within one-year of filing their case.
The Debtor filed a Complaint seeking a declaration that any personal obligation he may have to pay amounts owed by his company, Duncan Irrigation, Inc., to a creditor was discharged in his bankruptcy case. The Court held that the Debtor's personal guaranty of his company's debt to a creditor was not extinguished by the discharge order in the Debtor's Chapter 7 filing because: (1) credit creating the subject debt was extended to the company post-petition; (2) the Bankruptcy Code does not invalidate guarantees; and (3) the default occurred post-petition. Thus, the debt created by the Debtor's guaranty was not a contingent debt extinguished by his previous Chapter 7 filing.
The debtor filed an application for waiver of the Chapter 7 filing fee (application to proceed in forma pauperis) pursuant to 28 U.S.C. § 1930(f). The Court determined that the debtor's monthly income is less than 150% of the poverty guidelines published by the United States Department of Health and Human Services applicable to her family size. In addition, the debtor's expenses for housing, transportation, and living expenses are reasonable in light of the I.R.S. guidelines. Further, after analyzing the totality of the circumstances, the Court held that the debtor is unable to pay the filing fee in installments. Therefore, the Court granted the debtor's application to waive the Chapter 7 filing fee.
The Court denied hte Debtor's motion to reopen his case when a creditor recorded a judgment lien on property held as tenants by the entirety because the Debtor did not show entitlement to the relief sought under the Bankruptcy Code. Under Virginia law, property held as tenants by the entirety may be reached by joint creditors of both spouses, but not by creditors of either spouse alone. The Debtor's motion fails to allege whether the judgment is a joint judgment or a judgment only against the Debtor. Accordingly, the Court denied the Debtor's motion to reopen his case because the Debtor did not show entitlement to the relief sought under the Bankruptcy Code.