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Eastern District

Khuu v. Beeren & Barry Invs. LLC (In re Khuu)

Plaintiffs, chapter 13 debtors, brought an action to set aside a prepetition foreclosure sale at which defendant purchasers bought debtors'house. Defendants moved to dismiss the complaint for lack of jurisdiction and failure to state a claim for relief.
Ruling: 
Court denied a motion to dismiss the debtor's complaint since the complaint stated a claim and the debtors had standing under the circumstances to assert transfer avoidance powers that ordinarily reside with the trustee.
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In re Rudy

A chapter 7 matter was before the court on an order requiring debtor's former wife and her attorney to show cause why they should not be held in civil contempt, and appropriate sanctions imposed, for violation of the discharge injunction.
Ruling: 
Debtor's former wife and the wife's attorney were held in contempt for violating a discharge injunction by pursuing indemnification for credit card debts for which the debtor's liability was deemed to have arisen prepetition.
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In re Lawrence

Plaintiff chapter 7 debtor filed an adversary proceeding against defendant United States and others to determine the dischargeability of his various student loan obligations. The United States, on behalf of the Department of Health and Human Services, moved to dismiss with respect to the debtor's Health Education Assistance Loans ("HEAL").
Ruling: 
Debtor's HEAL student loans were deemed nondischargeable and the undue hardship argument was irrelevant since an unconscionability standard applied and the debtor did not plead unconscionability sufficiently.
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In re Moroney

Primary creditor, the IRS, objected to the confirmation of the debtor's chapter 13 plan for lack of good faith and for not devoting all of debtor's disposable income into the performance of the plan. The U.S. trustee moved to dismiss the case based on 11 U.S.C. §§ 1307 and 1325.
Ruling: 
Chapter 13 petition was dismissed due to debtor bad faith in proposing modest payout in plan since the tax debt was recently not discharged under chapter 7 and the debtor showed no evidence of financial troubles or efforts to pay the tax debt.
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