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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.

In re DeForest (Case No. 05-71325) 3/31/2006

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.

In re Wolfe (Case No. 05-74781) 03/30/2006

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).

In re Linkous (Case No. 03-04429) 03/24/2006

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.

Floyd v. Matthews (In re Matthews) (Case No. 05-60876; A.P. No. 06-06046) 03/24/2006

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.

Nexus, Inc. v. Keene (In re Keene) (Case No. 05-72297; A.P. No. 05-07143) 03/16/2006

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. 

In re Bannon (Case No. 05-61203) 03/10/2006

The United States Trustee filed a motion to dismiss this case as an abuse of the provisions of Chapter 7 of the Bankruptcy Code, pursuant to 11 U.S.C. § 707(b).  Section 707(b)(1) provides that a court may dismiss an individual case under Chapter 7 if (1) the debtor’s debts are primarily consumer debts and (2) it would be an abuse of the provisions of Chapter 7 of the Bankruptcy Code to grant relief to the debtor.  Section 707(b)(2) provides that abuse is presumed if a debtor's net monthly income exceeds a certain threshold amount as determined by the means test.  Section 707(b)(3)(B) provides that if the presumption in Section 707(b)(2) does not arise or is rebutted, the court must consider the totality of the debtor's financial circumstances in determining whether proceeding in Chapter 7 would be an abuse.  The United States Trustee has the burden of proof to prove by a preponderance of the evidence that allowing the Debtor to continue in Chapter 7 would constitute abuse.

The Court, applying the factors enumerated by the Fourth Circuit in Green v. Staples (In re Green), 934 F.2d 568 (4th Cir. 1991), concluded that it would not be a substantial abuse to permit the Debtor to continue under Chapter 7. The Debtors do not have sufficient income to fund a Chapter 13 plan, they have experienced at least one financial trauma, and there is no showing of bad faith. Accordingly, the Court denied the United States Trustee's motion to dismiss this case for abuse.

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