Judge Proctor

In re Mercado

The chapter 7 trustee filed an objection to the debtors'purported conversion of their case from a chapter 7 to a chapter 13 claim, asserting that the debtors had acted in bad faith, because they converted nonexempt assets into an alleged exempt homestead when they had debts of at least $50,000. The trustee noted that the Supreme Court's recent ruling in Marrama v. Citizens Bank of Mass. was controlling precedent.
Ruling: 
Voluntary conversion from chapter 7 to chapter 13 vacated due to debtors' bad faith in converting nonexempt assets into exempt homestead.
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Consumer case opionion summary, case decided on September 24,2007, LexisNexis #1007-116

Miller v. Schneider (In re Schnieder)

Chapter 7 trustee for the estate of the holding company filed an action against debtor to seek a determination that the obligation owed by the debtor to the holding company was non-dischargeable under 11 U.S.C. § 523(a)(2), (4) and (6). After a hearing, the court issued findings of fact and conclusions of law.
Ruling: 
Debtor officer's obligation to holding company was nondischargeable due to diversion of sale proceeds and false representations.
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In re Davis

Debtors, husband and wife, filed for chapter 13 relief. Creditor IRS objected to confirmation because the wife had not filed federal employment tax returns in relation to a child care business she owned. The court confirmed the chapter 13 plan. A notice of voluntary dismissal was filed as to the wife. The court dismissed the case as to the wife. The IRS moved to set aside the order dismissing the case as to the wife.
Ruling: 
Debtor spouse had inherent right to voluntarily dismiss non-converted chapter 13 case.
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In re Delco Oil Inc.

Debtor entered into a revolving credit and security agreement with creditor. The debtor pledged as collateral its collections, cash payments, and inventory. The agreement required the debtor to maintain its bank accounts with a specific bank. However, the debtor opened two secret bank accounts. The creditor moved for relief from stay to gain possession of the secret accounts. Chapter 7 trustee and others filed objections (objecting parties).
Ruling: 
Creditor entitled to relief from stay to pursue prepetition deposits in debtor's covert bank accounts.
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Charter Intl Oil Co. v. Young (In re Charter Intl Oil Co.)

Plaintiff debtors filed an adversary proceeding against defendants, a husband and a wife, to determine the dischargeability of defendants' claim against the debtors. Defendants had filed a personal injury action against the debtors alleging that they were injured because of exposure to benzene. Defendants filed a counterclaim for sanctions. The parties filed cross motions for summary judgment.
Ruling: 
Case claiming injuries from exposure to benzene dismissed as claims existed at time of debtor's petition and plaintiffs received sufficient notice as "unknown creditors."
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In re Blinco

Bankruptcy debtors proposed a chapter 13 plan which provided for payments for four years and increased payments thereafter to pay their mortgage arrearage. The debtors'mortgagee objected to confirmation of the plan on the grounds that it was not feasible under 11 U.S.C. § 1325(a)(6), improperly claimed a setoff against the mortgage under 11 U.S.C. § 1322(b)(2), and did not cure the arrearage within a reasonable time under section 1322(b)(5).
Ruling: 
Confirmation denied due to debtors' insufficient monthly income, attempt to modify mortgage on primary residence, and failure to make payment towards mortgage arrearage until year five.
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In re Davis

The debtor filed for bankruptcy relief pursuant to chapter 13 and submitted a proposed plan for confirmation. The creditor objected to the confirmation of the debtor's plan, because the creditor contended that the plan did not comply with 11 U.S.C. § 1325(a)(5)(B)(iii)(I).
Ruling: 
Objection to confirmation of chapter 13 plan was overruled since section 1325(a)(5) did not apply to the arrears payments and, thus, equal monthly installments were not required.
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In re Quarterman

The debtor filed for bankruptcy relief under chapter 13. The debtor filed a proposed plan and filed a motion for confirmation of the plan. The chapter 13 trustee objected to confirmation of the plan.
Ruling: 
Trustee's objection to proposed chapter 13 plan was overruled, but court rejected debtor's argument that only debtors with monthly income above state family income median were required to contribute disposable income to plan.
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Ferguson Enters. v. Lort (In re Lort)

Plaintiff creditor filed an adversary proceeding against defendant debtor alleging that the debtor's discharge should be denied pursuant to 11 U.S.C. §§ 727(a)(2) and (a)(5) and also alleged an exception to discharge pursuant to 11 U.S.C. § 523.
Ruling: 
Debtor was denied discharge since the debtor showed an intent to defraud in transferring property of a corporation for which debtor was the sole officer and shareholder.
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In re Schneider

A chapter 13 matter was before the court upon debtor's Objection to Claim Two of claimant, his ex-spouse.
Ruling: 
Court rejected debtor's objections to the debtor's ex-wife's claim since, pursuant to Rule 3001(a), the claim substantially conformed with Official Form 10.
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