Kansas Bankruptcy Local Court Rules Amended

New local rules for the Kansas Bankruptcy Court went into effect March 17, 2011.

2011_Local_Rules

GAP Insurance Not In Car Lender's PMSI

GAP insurance, service contracts, administrative fees and the traded-in car payoff are not part of a car lender’s purchase-money secured claim in chapter 13 bankruptcy and can be crammed-down if the car is worth less than the loan balance, Judge Janice Miller Karlin ruled this week in In Re Miller, Case No. 08-40935, (Bankr. D.Kan. December 2, 2008).

Judge Karlin suggested the ruling may be different for service contracts in a future case if the creditor convinces her the contract enhances the value of the vehicle.  Creditors have the burden of proof to establish their purchase money security interest (PMSI) claim, she said.

Non-PMSI charges are still part of the creditor’s secured claim and must be paid in chapter 13 bankruptcy up to the value of the car. A debtor must pay the entire PMSI to retain a car even if the amount is greater than the car’s value if the loan was incurred within 910 days of bankruptcy. [Read more…]

Kansas Bankruptcy Court Proposes Local Rules Changes

Amendments to the local rules of practice and procedure are proposed by the U.S. Bankruptcy Court for the District of Kansas about post-confirmation recovery of assets by the chapter 13 trustee, proof of insurance on motor vehicles, required information for attorney signatures on pleadings, and cases commenced by foreign representatives.

The Court is soliciting written comments on the proposed local rules until December 1, 2008.  Comments may be sent to the Clerk of the U.S. Bankruptcy Court, 444 SE Quincy, Topeka, KS 66683, or at the clerk’s office in the Wichita and Kansas City, KS, divisions.

Click here to download a redlined copy of the proposed revisions.  Minutes of the Bench and Bar Committee, which recommends the proposed changes, can be found here on the court’s website.

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