According to Robing Miller of CBAR, if a Chapter 13 debtor is unable to provide information about his non-filing spouse’s income, expenses, and contributions to the household, they were required to propose a Chapter 13 plan that paid unsecured creditors in full – despite the fact that the debtor’s spouse allegedly refused to provide the required information. Whether or not the debtor had access to information concerning the nonfiling spouse’s contribution to the household, there was no way of knowing whether he was contributing all of his “current monthly income” to the plan without knowing that information. As a result, the Bankruptcy Court held that the debtor’s compliance with Code § 1325(b)(1) could only be assured if he paid all unsecured creditors in full. In…

As reported by Robin Miller of CBAR, an Oregon Court affirmed a Chapter 13 plan that provided for the vesting of title to the debtors’ residential property in the holder of the first-priority mortgage on the property. The Bankruptcy Court held that the plan provision was authorized by Code § 1322(b)(9), which states that a plan may “provide for the vesting of property of the estate, on confirmation of the plan or at a later time, in the debtor or in any other entity.” Nothing in the language of § 1322(b)(9), the court emphasized, requires the creditor’s consent. While a Chapter 13 plan must also comply with Code § 1325(a)(5) in the plan’s treatment of secured claims, a vesting provision under § 1322(b)(9) is consistent…

As reported by Robin Miller of CBAR, a mortgage servicer’s change in the reporting of the Chapter 7 debtor’s mortgage obligation to credit bureaus heavily suggested that the servicer sought to collect a discharged debt from the debtor, and the servicer’s additional contacts with the resulted Violation of the Discharge Injuncition. While the predecessor servicer reported the debt as closed, with zero past due and zero outstanding balance, the current servicer reported the debt as “open” with a “balance” of $254,699 and a “past due amount” of $90,060. The servicer’s reports were “blatantly inaccurate from the start,” as, long before the servicer took over from the prior servicer, the debtor’s personal liability had been discharged in his bankruptcy case and his in rem liability was…

As reported by Robin Miller of CBAR, a New Jersey Chapter 13 debtor was able to get a “Free House.” UnderNew Jersey law, the debtor’s mortgage creditor was time-barred from enforcing both the note and the accelerated mortgage, under which the debtor had defaulted in 2007. As a result, the creditor’s proof of a secured claim was disallowed under Code § 502(b)(1) as unenforceable against the debtor or the debtor’s property under applicable state law. The Bankruptcy Court determined that the creditor did not have an allowed secured claim and the underlying lien was deemed void pursuant to Code § 506(a)(1) and § 506(d). As a result, the debtor was entitled to retain the property, free of any claim by the creditor. In re Washington, 2014…

As reported by Robin Miller of CBAR, Code § 526(a)(2) prohibits a debt relief agency from “counsel[ing] or advis[ing] any assisted person or prospective assisted person to make a statement in a document filed in a case … that is untrue or misleading,” applies regardless of whether the counseled person files a document in the bankruptcy case embodying the untrue statement. The debtor’s former attorney violated this provision by advising the debtor to omit any reference to a potentially preferential prepetition transfer to the debtor’s mother in documents filed in the debtor’s bankruptcy case, even though the debtor chose instead to have her mother repay the proceeds that might have been challenged as a voidable preference. In re Clink, 770 F.3d 719 (8th Cir., Oct. 21,…

Yes. Affirming In re McLean, 2013 WL 5963358 (Bankr. M.D. Ala. Nov. 8, 2013), the district court held that the bankruptcy court did not err in ruling that a mortgage creditor’s filing a proof of claim for an unsecured deficiency judgment debt that had been discharged in the debtors’ prior bankruptcy case violated the discharge injunction issued in that case, and awarding actual damages for emotional distress in the amount of $25,000, attorney’s fees in the amount of $18,355, and a coercive sanction in the amount of $50,000. McLean v. Greenpoint Credit LLC, — B.R. —-, 2014 WL 4207629 (M.D. Ala. Aug. 25, 2014), appeal filed, Green Point Credit v. McLean, Case No. 14-14002 (11th Cir. filed Sept. 4, 2014) (case no. 1:13-cv-925).

Yes. The Canadian Old Age Security benefits received by the debtors were not included in the debtors’ current monthly income under Code § 101(10A) because § 101(10A)(B) excludes from the calculation of current monthly income any benefits received under the Social Security Act and a U.S.-Canadian treaty, the Agreement with Respect to Social Security, mandates reciprocal treatment of government retirement benefits between the two countries. Accordingly, the treaty required that Canadian social security benefits be excluded as well. In re McPhee, 2014 WL 4211068 (Bankr. E.D. Va. Aug. 26, 2014) (case no. 3:13-bk-36046).