Showing 64 posts in Chapter 7.
BAP: Chapter 7 trustee cannot avoid erroneously discharged mortgage if discharge is rescinded pre-petition
Richardson v. Citimortgage, Inc. (In re Emerson), unpublished opinion, BAP No. 11-8015 (Oct. 7, 2011).
The Bankruptcy Appellate Panel of the Sixth Circuit ("BAP") has rejected a trustee's efforts to avoid a mortgage that was mistakenly discharged because the discharge was rescinded before the debtor's bankruptcy filing. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 7
Share
District Court Affirms In Re Rahim: Chapter 7 Business Debtors' Case May Be Dismissed Under § 707(a)
In re Rahim, E.D. Mich., May 23, 2011 (Case No. 10-15123, Hon. Sean F. Cox).
Previously on this blog, we discussed In re Rahim, a case in which Judge Rhodes dismissed the Chapter 7 case of debtors with primarily non-consumer debts "for cause" under 11 U.S.C. § 707(a) because the case was not filed in good faith. The debtors, both practicing physicians, brought home an annual income of more than $500,000 and had multiple homes and luxury vehicles. Read More ›
Categories: Chapter 7, Eastern District of Michigan
Pre-petition tax refund garnishment avoidable under 522(h), but not 522(f).
Johnson v CACH, LLC (In re Johnson), E.D. Mich., December 20, 2010 (Case No. 10-12873, Hon. Robert H. Cleland)
When a creditor has a state court judgment, garnishing the judgment debtor's state income tax refund is a common collection method. If the judgment debtor files bankruptcy, issues often arise as to whether the creditor can keep the refund or whether the debtor is entitled to recover and exempt the refund. Read More ›
Categories: Chapter 7, Eastern District of Michigan
Did You Know? | Creditors have affirmative duty to release garnishments following bankruptcy filing.
In the "Did You Know?" section of the Michigan Bankruptcy Blog, we feature opinions that are not newly issued but that may be helpful for Michigan bankruptcy practitioners.
When a person files bankruptcy, most collection actions are automatically stayed. Subject to certain exceptions, Section 362 of the Bankruptcy Code prohibits the commencement or continuation of an action to recover a pre-petition claim, the enforcement of a pre-petition judgment, and any act to collect a pre-petition claim against the debtor, among other things. Read More ›
Categories: Chapter 7, Did you Know?, Eastern District of Michigan
Bankruptcy Court Clarifies Scope of Exemptions for Life Insurance Policies
In re Zerbi, Bankr. W.D. Mich., Jan. 6, 2011 (Case No. 09-14649, Hon. Scott W. Dales)
A recent decision from the Bankruptcy Court for the Western District of Michigan provides some practical guidance for debtors and their attorneys about exempting unmatured life insurance policies.
In In re Zerbi, the debtor owned and was the insured under a life insurance policy. The policy had both a "cash value" or investment component and an insurance component. When the debtor filed his Chapter 7 case, the insurance policy had a cash surrender value of approximately $19,248.02. The debtor claimed exemptions in the policy under sections 522(d)(5) (the "wildcard" exemption), 522(d)(7), and 522(d)(8): Read More ›
Categories: Chapter 7, Western District of Michigan
New Opinion Creates Split in Western District as to Whether Debtors Can Exempt Undisclosed Tax Refund That is Spent Post-petition.
In re O'Brien, Bankr. W.D. Mich., Jan. 4, 2011 (Case No. 09-00426, Hon. James D. Gregg).
As previously discussed on this blog, debtors should include a good-faith estimate of an anticipated tax refund in their bankruptcy schedules. In prior cases, the Hon. Jeffrey R. Hughes and the Hon. Scott W. Dales suggested that debtors may not be able to amend their schedules to exempt tax refunds that have already been spent at the time of the amendment. But in a recent opinion, the Hon. James D. Gregg disagreed with those cases and held that, depending on the circumstances, debtors may be able to exempt a tax refund that was not originally disclosed, even if the tax refund has been spent. Read More ›
Categories: Chapter 7, Western District of Michigan
Eastern District: Business Debtors in Chapter 7 Must Tighten Their Belts, Too
In re Rahim, Bankr. E.D. Mich., Dec. 16, 2010 (Case No. 10-57577-R, Hon. Steven Rhodes).
When one thinks of Chapter 7 bankruptcy cases, the low-income consumer debtor who is overwhelmed by debt often comes to mind. But individuals whose debts are primarily "non-consumer" debts – usually business debts – may also qualify for Chapter 7 relief, even if they cannot pass the "means test" required for consumer debtors under BAPCPA. Because business debtors do not have to pass the means test, their incomes may be significantly higher than what one might expect to see in a Chapter 7 case. However, at least one Michigan bankruptcy court is requiring high-income business debtors to tighten their belts when they seek Chapter 7 relief.
In In re Rahim, the married debtors, both practicing physicians, earned a startlingly high income. Despite having filed Chapter 7, the debtors' annual income exceeded $500,000, and their expenses included sizeable mortgage payments on their home, vacation home, and rental home, plus payments on three luxury vehicles. Their debts included numerous mortgages and personal guaranty liability arising out of failed real estate ventures. Read More ›
Categories: Chapter 7, Eastern District of Michigan
New Amendments to Bankruptcy Rules Take Effect
Although less sweeping than the 2009 rule amendments, which changed the time periods for many actions, bankruptcy professionals should take note of the most recent changes to the Bankruptcy Rules.
Notably, Amended Rule 1007(c) increases the time for an individual debtor in Chapter 7 to file the statement of completion of a course concerning personal financial management from 45 days to 60 days. Read More ›
Categories: Chapter 11, Chapter 13, Chapter 7
Chapter 7 Trustee May Avoid Mortgage on Platted Land Where Legal Description Fails to Identify Plat
Richardson v. Wells Fargo Home Mortgage, Inc. (In re Brandt), Bankr. W.D. Mich., Nov. 30, 2009 (Adv. Pro. No. 08-80342, 421 B.R. 426, Hon. James D. Gregg), affirmed, W.D. Mich., Aug. 25, 2010 (Case No. 1:10-CV-55, Hon. Robert Holmes Bell).
Outside of bankruptcy, errors in legal descriptions in mortgages often can be corrected. But when a mortgagee files a Chapter 7 bankruptcy case, a mistake in a legal description can open the door for a trustee to avoid the mortgage and potentially liquidate the property for the benefit of the debtor's unsecured creditors. Read More ›
Categories: Chapter 7, Western District of Michigan
Bankruptcy Court Rejects Chapter 7 Trustee's Efforts to Revoke Abandonment of Property
In re Reiman, Bankr. E.D. Mich., July 16, 2010 (Case No. 09-70776, Hon. Phillip J. Shefferly).
Because of the high volume of foreclosures in Michigan, some lenders are bidding less than fair market value at foreclosure sales, particularly on the east side of the state. This has created a conundrum for Chapter 7 trustees who close cases as "no asset" cases, only to discover after the foreclosure sale that they could have sold the property at market value, paid the redemption amount, and still had money remaining to distribute to unsecured creditors. Read More ›
Categories: Chapter 7, Eastern District of Michigan
Categories
- Estate Planning
- Chapter 11
- Property Tax
- Case Law Updates
- 6th Circuit Court of Appeals
- Western District of Michigan
- Fraud & Abuse
- U.S. Supreme Court
- Zoning & Land Use
- Eastern District of Michigan
- Billing/Payment
- Did you Know?
- Alerts and Updates
- Collections
- Chapter 7
- Financing
- Chapter 13
- Landlord-Tenant
- Personal Property Tax