“TRANSFORMATION” RULE AND NEGATIVE EQUITY DISCUSSED; GAP
INSURANCE, SERVICE CONTRACT NOT PART OF COLLATERAL
In re Miller, Case No 08-40935
December 2008, Judge Karlin
Debtor sought, and was permitted, to pay only the cost of the car, rather than cost plus other charges. Court did not rule on whether certain fees not adequately addressed by either side were part of the PMSI. Good discussion of the transformation rule and negative equity.
Digest by: Jan Hamilton, Trustee
BUSINESS USE MUST BE “SIGNIFICANT” TO ESCAPE 910 FULL PAYMENT
In re Wilson, Case No. 06-40637
December 2006, Judge Karlin
Debtor sought to avoid the full payment requirement of the 910 car loan provision. Debtors were using the vehicles in question for personal and business use, as they served as foster parents. The court followed Lowder and Bolze. The Court adopted a “significant and material” approach and found that the vehicles were used “significantly” for personal purposes in finding that the vehicles were subject to the 910 paragraph.
Digest by: Jan Hamilton, Trustee
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. (more…)
WICHITA NO LOOK FEE FOR DEFENDING MOTIONS TO DISMISS MAY BE $350.00
In re Kiser, Case No. 06-11453
January 2009, Judge Nugent
Debtor filed a motion to modify plan to increase monthly payment and to pay attorney fees of $500.00. Court allowed $400.00. Judge Nugent quoted Judge Karlin in Beck in supporting its conclusion that a presumptive fee of this nature may be appropriate.
13 ATTORNEY FEES IN TOPEKA
In re Beck, Case No. 06-40774
February 2007, Judge Karlin
This case should be read in conjunction with the later rendered Professional Fee and Expense Guidelines in Bankruptcy Cases of Judge Karlin. Based upon 330, the evidence and the Johnson factors, the presumptive fee for below the line debtors is $2800 and $3300 for an above the line debtor with $400.00 allowed as additional fees for 363(c) motions, without prejudice to obtaining additional fees by way of a formal application or narrative explanation. Further, presumptive fees for motions ($150.00 plus postage) and responses ($200.00 plus postage) are also established.
PERSONAL VS. BUSINESS USE FOR 910 CAR CLAIMS
In re Lowder, Case No. 05-44802
August 2006, Judge Karlin
Creditor objected to confirmation as debtor sought to avoid the 910 car loan restriction by arguing that she used the car to get to and from work and, therefore, not “personal”. Debtor contended that Toyota is entitled to no interest. Creditor sought the Till rate. Judge Karlin restated her position from Vega. Additionally, she found that these facts supported “personal” use and not a “business” use. Further, Till applies, in order to provide the creditor with the present value of its claim.
“PERSONAL USE” NOT THE SAME AS “PERSONAL, FAMILY OR
HOUSEHOLD”
In re Humphrey, Case No. 06-20783
October 2006, Judge Berger
Debtors attempted to cram down a 910 motor vehicle. The Court determined that “personal use” is not the same as “personal, family or household use” used elsewhere in the code. A vehicle acquired for the debtor’s spouse is not subject to 1325(a)(5)(B) and 506 applies. Cramdown allowed.
CAR PURCHASED FOR COMMON LAW WIFE IS PERSONAL, NOT BUSINESS
In re Bolze, Case No. 06-40036
August 2006, Judge Karlin
Creditor objected to plan that sought to escape the 910 hanging paragraph. The Court restated the rules established in Vega and Lowder. Debtor attempted to distinguish amongst “household”, “family” or “personal”. Basically, the Court said “personal” is not “business” and vice versa. Therefore, a car purchased for Mr. Bolze’s common law wife was “personal”.
INTENTIONAL DESTRUCTION OF COLLATERAL?
In re Murrow, Case No. 07-41061
March 2008, Judge Karlin
Creditor was give an additional time to amend its complaint. Debtor took the 5th but the intimation of the discussion in the decision is that debtor likely intentionally destroyed the vehicle but insufficient facts were alleged.
Digest by: Jan Hamilton, Trustee
INVOLUNTARY DEBTOR NOT REQUIRED TO OBTAIN PRE PETITION
COUNSELING
In re Sims, Case No. 08-41668
January 2009, Judge Karlin
109(h) pre petition counseling requirements do not apply to an involuntary debtor.
Digest by: Jan Hamilton, Trustee
TAX REFUND ASSIGNMENTS AND CHAPTER 7
In re: Sydmark, Case No. 06-41218
In re: Black-Watkins, Case No. 05-42439
June, 2008, Judge Karlin
Lamie v. US and Redmond v. Lentz, Hodes and Wagers redux. Assignment of a tax refund does not divest the estate of an interest in them, even though UCC1 was filed. In a Chapter 7 case, refunds, after subtraction of a flat fee, must be turned over to Trustee.
2016 APPLICATIONS BY CREDITORS
In re Loy, Case No. 07-41333
December 2007, Judge Karlin
This case contains a discussion of the various issues that are to be considered by court and counsel in the context of a 2016 application by a creditor. This same issues present themselves in proofs of claim issues pertaining to attorney fees.
Digest by: Jan Hamilton, Trustee
109(h) CREDIT COUNSELING NOT OBTAINED WITHIN 180 DAYS IS FATAL
In re Gaddis, Case No. 07-40476
June 2007, Judge Karlin
Chapter 7 case dismissed for failure to comply with 109(h), in that the credit counseling was not obtained within 180 days of the date of filing. No statutory exception was alleged. Debtor is simply not eligible to obtain title 11 relief if 109(h) is not complied with.
Digest by: Jan Hamilton, Trustee
LANNING EXTENDED TO EXPENSE SIDE
In re Melvin, Case No. 07-22352
December 2008 Judge Somers
Court extended the Lanning analysis and found there was no binding precedent on the issue of whether actual of 22C expenses were mandated and found that 22C expenses may be deviated from also. This is consistent with dicta in Lanning, and Judge Nugent in In Re Hoss, 08-10365, and In re Arroyo, No. 07-12779. It may also be inconsistent with Judge Karlin in the bankruptcy court decision in Lanning.
Lanning has been appealed by the bankruptcy trustee and is currently pending in the U.S. Supreme Court. Oral argument is expected in March 2010.
Digest by: Jan Hamilton, Trustee
HOW EXACTLY DO WE DEDUCT ‘MARITAL ADJUSTMENTS’?
In re Dugan, Case No. 07-40899
August, 2008, Judge Karlin
Chapter 13 Trustee objections to debtor’s attempts to include a marital adjustment on Lines 13
and 19 for a non-filing spouse and a deduction for transportation expenses. Court
allowed, in theory, the marital deduction, but found it had not been supported with any
detail. Debtor was given time to provide documentation. Digest by Jan Hamilton Trustee.
A DEBTOR MUST USE THE STRIPPED/CRAMMED DOWN AMOUNT FOR
PURPOSES OF CURRENT MONTHLY INCOME (CMI) ON LINE 47 OF B22C
In re Hoss, Case No. 08-10365
In re Arroyo, Case No. 07-12779
August 2008, Judge Nugent
In above median income (AMI) cases, debtors sought to deduct contract payments, rather than the stripped off/crammed down amounts. The Court sustained the Chapter 13 Trustee’s objection to confirmation. This is a good analysis of the status of the law, as of the date of the
issuance of the opinion. Judge Nugent applied the reasoning of Lanning, but on the
expense side, rather than the income side, of the equation. He also disagreed with Judge
Karlin’s decision in Allen, which would have reached an opposite result.
401(K) DISBURSEMENT PRE PETITION IS CURRENT MONTHLY INCOME BUT NOT PROJECTED DISPOSBLE INCOME
In re DeThample, Case No 07-11829
July 5, 2008, Judge Nugent
Under 1325(b)(1)(B), a singular, one time disbursement is “income” for purposes of
determining Current Monthly Income (CMI), but followed Judge Karlin’s Lanning decision in determining what constituted Projected Disposable Income (PDI). This is a good read of the status of the law in
this area of its date of issuance, according to a digest of the case by Jan Hamilton, Trustee.
MORE LINE BY LINES OF B22C
In re Hays, Case No 07-41285
April, 2008, Judge Karlin
13 Trustee objections to debtor’s attempts to claim living expenses for non-dependent debtors as well as for secured debt on a timeshare. Court followed Law and disallowed adult child expenses. The Court allowed the debt on the timeshare to be deducted. The decision is very thorough and is a recommended read.
Digest by: Jan Hamilton, Trustee
B22C CASE, LINE BY LINE…
In re Law, Case No. 07-40863
April 2008, Judge Karlin
Court sustained 13 Trustee’s objection to confirmation as debtor included: adult son in household size, tax levy on Line 33 and duplicated it on Line 49 and unencumbered vehicle on line 28. The decision is a good analysis of the status of B22C case law as of the date of the decision.
Digest by: Jan Hamilton, Trustee