Bankruptcy Dismissed for No Tax Returns

DISMISSAL FOR FAILURE TO FILE RETURNS MANDATORY UPON
MOTION
In re McCluney, Case No. 06-21175
June 2007, Judge Somers

The Court sustained a motion to dismiss by the IRS for failure to file pre petition tax returns as required under the new 1308 provision. This is not an “automatic dismissal” provision, but once the motion was filed, Judge Somers reasoned that he had no other choice.

FAILURE TO FILE RETURNS CAN BE FIXED WITH 105
In re Novello, Case No. 06-21029
August 2007, Judge Berger

IRS motion to dismiss for failure to file tax returns under 1308 was denied because the tax returns are now filed. Alternative relief sought was to reopen the 341 meeting, which the Court granted. Debtors Motion to Ratify under 1325(a)(9) was granted. Although dismissal is mandatory, the debtor can ask for extensions under 1308(b) which is included by reference in 1307(e). The 341 was reopened under 105.

Negative Equity

NEGATIVE EQUITY ISSUE NOT RULED UPON IN 1327 CASE
In re Kuhasz, Case No. 07-20282
November 2008, Judge Somers

Court noted split within the district. Judge Karlin excluded negative equity from PMSI claim in In re Padgett, 389 BR 203, while Judge Nugent included it. In re Ford 387 BR 14827 but declined to rule on the issue because the plan had been confirmed and the elements of 1329 had not been met.

NEGATIVE EQUITY ROLLED INTO LOAN IS NOT PMSI
In re Padgett, Case No. 07-41284
May, 2008 Judge Karlin

Car creditor objected to debtor’s attempt to avoid paying the negative equity in a 910 case. After analyzing the UCC as it exists in Kansas, the Court confirmed its opinion in Vega, but disagreed with Judge Nugent’s decision in Ford.

NEGATIVE EQUITY IS PMSI FOR PURPOSES OF 910 CAR LOANS
In re Ford, Case No. 07-11561
May 2008, Judge Nugent

Court held that negative equity in a trade in vehicle, financed by lender, is a part of the price of the collateral and constitutes value given to enable debtors to acquire collateral. The entire balance was found to be a “910” obligation under the hanging paragraph of 1325.

NEGATIVE EQUITY IS NOT PMSI
In re Kellerman, Case No. 06-22028
August 2007, Judge Berger

Pre petition payments are to allocated between refinanced negative equity and the PMSI portion of a 910 vehicle claim under 1325(a)’s hanging paragraph by reference to KSA 84-9-103(c). Under Kansas law, PMSI is the purchase price, not negative equity. Start with the vehicle’s cash purchase price and the apply pre petition payments in accordance with the parties written agreement. If no agreement or other manifested intent, the prepetition payments are applied first to unsecured negative equity and then to PMSI.

Creditor Gets Deficiency Claim After Collateral Surrender

10th CIRCUIT ‘RULES’
In re Rule, Case No. 06-22145
July, 2008, Judge Berger

Judge Berger followed In re Ballard 526 F. 3d 634 (10th Cir. 2008), in finding that a 910 car loan may have a deficiency balance after sale of the vehicle. [Read more...]

910 Car Claims Get Interest

SURRENDER IN FULL SATISFACTION OF 910 AND PAYMENT IN FULL
WITH NOT INTEREST NOT ALLOWED
In re McClay, Case No. 07-20106
October 2008, Judge Berger

910 vehicle case. Plan provided for payment of full debt with no interest and option to surrender in full satisfaction. This was found to be an attempt to modify prospectively and Court opined that 1329 would have to be used. Court followed 10th Cir. In re Jones, 530 F3d 1284, (10th Cir. 2008). Debtor must pay interest. In re Ballard, 526 F3d 634 (10th Cir. 2008) holds that deficiency must be provided for if vehicle is surrendered. [Read more...]