At First Blush a Harsh Result in Failing to Advise the Court that the Debtor Passed Within 1 Month of Confirmation of a Chapter 13 - But Likely the Correct Result

A Colorado Bankruptcy Court was faced with a motion to reconsider a dismissal motion after a Chapter 13 plan was completed by payments made by the personal representative of the Debtor.  The Debtor had passed within the first month after confirmation, but no one told the Bankruptcy Court.  After the plan was completed, the Personal Representative filed a motion to waive the requirements of the financial management course.  The Court denied the motion and dismissed the case.  The Personal Representative then filed a motion to reconsider.


In the motion to reconsider, the Court analyzed the difference of Rule 1016 in a Chapter 13 case vs. a Chapter 7 case.  Rule 1016 provides in part that upon the death of a debtor the case can be dismissed or if it is in the best interest of the parties, the case may continue.  The Court focused upon the creditors as the parties vs. the personal representative who would have inherited the remaining assets of the deceased debtor.  If the case was dismissed, then the creditors would get paid more but on the other hand if the case was not dismissed then the representative would get the assets.


The Court appeared to be upset about the failure of the parties to inform the court of the death and chose to wait 3 years to then advise the Court.  The Court indicated that it would have been in a better position to analyze the situation if it was advised immediately. 


Based upon the Court's reading of the law, the Court denied the motion to reconsider.


A quick comment - this was a motion to reconsider and the Court did not seem to focus on why it should reconsider its prior order but rather analyzed the entire situation. 


In re Keith Fogel Ssn Xx 6566, 2014 Bankr. LEXIS 2734 Folder icon(Copy citation)
United States Bankruptcy Court for the District of Colorado
June 20, 2014, Decided
Case No. 10-38010 ABC Chapter 13

What is Income under 101(10A) for purposes of a Chapter 13 Case - ND Georgia Case

Congress has defined current monthly income as the average monthly income but the Georgia Court was faced with trying to define "income".  The Court determined that Congress intended that "income" was meant to mean "gross receipts" for purposes of calculating the current monthly income of a sole proprietor under 101(10a) and determining the applicable commitment period under 1325(b)(4).

In re Kuwik

United States Bankruptcy Court for the Northern District of Georgia

May 23, 2014, Decided

Case No. 13-77137-JRS Chapter 13

Chapter 13 - Property of the Estate INCLUDES Post-Petition Assets - (4th Cir Published)

In a Chapter 13 case, post-petition assets such as a personal injury claim and even an inheritance is property of the Estate.  The 4th Circuit was faced with an inheritance which arose more than 180 days after filing.  The Debtor contended it was not property of the Estate and the Trustee argued otherwise.  The Court found that it was property of the Estate.

In re Carroll - 4th Cir. Published 13-1024

Also, see the 5th Circuit case which was mentioned in this blog

Continuing Duty to Disclose Assets in a Chapter 13

5th Cir. Continuing Duty to Disclose - Even in a Chapter 13 - No disclosure -> Judicially Estopped!

Even in a Chapter 13 case, disclosure is the key.  In this case, the Debtor filed a Chapter 13 case and was injured after the filing.  The Debtor did not disclose the personal injury accident and proceeded to file suit.  The Defendants filed a motion asserting judicial estoppel.  The Court held in favor of the Defendants but permitted the Chapter 13 Trustee to proceed but citied to Reed which held that the Trustee can proceed, but any remaining funds after distribution to the creditors would be returned to the defendants.

In re Flugence 2013 5th Cir.

How to get paid in a dismissed Chapter 13 case - NY Decision - utilize 503(b) - In re Garris - 9-5-13 - Published

A Debtor, in a dismissed case, sent a letter to the Court demanding that their attorney return funds that the Chapter 13 Trustee gave them, brought up the issue on how does a Chapter 13 attorney get paid in a dismissed case.  Counsel apparently had an assignment of such funds which was troubling for the Court.  The Court, in a published decision, analyzed 1326(a)(2) and found that it applies.  Having found that section 1326(a)(2) applies, the Court determined that it cannot compel payment of the funds to Debtor's counsel through operation of the assignment signed by the Debtor.  The Court noted that Counsel could have filed a fee application and obtained a 503(b) claim but that did not occur.  As a result, the Trustee was obligated to pay the money to the Debtor.    However, the Court determined that it continues to have jurisdiction over fee requests despite the dismissal and could exercise its ancillary jurisdiction.  Therefore, the Court ruled that Counsel needs to file the fee application, give notice and permit the Debtor to contest the reasonableness of the fees.

The moral of the story is... file your fee application because not all judges will be so nice!

In re Garris

8-29-13 - 9th Cir. En Banc, overrules the holding of Kagenveama - In re Flores

The 9th Circuit, sitting en banc, held that when a Chapter 13 debtor has no “projected disposable income,” 11 U.S.C. § 1325(b)(1)(B) permits plan confirmation only if the length of the proposed plan is at least equal to the applicable commitment period under § 1325(b)(4). The court overruled  the holding of Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), that § 1325(b)(1)(B) does not impose a minimum duration for a Chapter 13 plan if the debtor has no projected income.

The Court also reaffirmed that 1325(b)(1)(B) acts as a temporal, as distinct from a monetary, requirement that defines a plan's duration.

In re Flores