In re Deborah Renae Smith. Motion to set aside discharge order and motion for expedited hearing denied where debtor wished to set aside discharge order for the sole purpose of extending time within which debtor could rescind her reaffirmation agreement. Insufficient facts alleged which would justify setting aside discharge order under Bankruptcy Rule 9024. Even if additional facts had been alleged, case law does not support setting aside discharge order to permit modification/rescission of reaffirmation agreement once deadline as stated in 11 U.S.C. 524(c)(4) has passed. Not selected for publication.
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Opinions
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Audrey R. Evans
Debtors are ineligible for chapter 13 under 11 U.S.C. § 109(e) because their unsecured debt included the debt of a corporation the Court found to be the alter ego of Debtor Mark Schutzius; additionally, Debtors' attempt to remove corporate debt from initial schedules by filing an amended plan omitting the corporate debt was a bad faith attempt to create eligibility.Not selected for publication.
Existence of security device which disables vehicle's starter if debtor does not obtain the proper code each month is willful violation of the automatic stay where creditor failed to ensure that debtor in bankruptcy received the proper code each month. Debtor awarded compensatory damages and attorneys' fees; no punitive damages awarded. Hampton v. Yam's Choice Plus Autos, Inc. (In re Hampton)319 B.R. 163 (Bankr. E.D. Ark. 2005)
Debtors filed a complaint for turnover of estate property in possession of the lien creditor. The creditor alleged a lack of adequate protection of its lien interest as a defense to the turnover action. Rejecting that defense, the Court held that lien creditors in possession of collateral constituting estate property violate the automatic stay if they retain possession of that collateral postpetition following a debtor’s demand for turnover. Williams v. GMAC (In re Williams), 316 B.R. 534 (Bankr. E.D. Ark. 2004).
Obligations arising out of Property Settlement Agreement to pay for former spouse's car and a second mortgage on former spouse's residence held nondischargeable pursuant to § 523(a)(15); obligation to pay former spouse's attorney's fees held nondischargeable pursuant to § 523(a)(5); obligation to pay premiums on a life insurance policy benefitting a third party held dischargeable pursuant to § 523(a)(15)(B).Beggs v.Niewdach and Beggs v. Tripcony Law Firm, P.A. (In re Beggs), 314 B.R. 401 (Bankr. E.D. Ark. 2004).
Debtor could not discharge a student loan obligation pursuant to 11 U.S.C. § 523(a)(8) despite her bleak financial circumstances because there were enough available funds in her budget to pay her debt in installments under the William D. Ford Direct Loan Consolidation Program’s Income Contingent Repayment plan while maintaining a minimal standard of living. Not selected for publication.
The confirmation of Debtor’s chapter 11 plan, which did not address the issue of the Federal Government's setoff rights, does not affect that entity's right to setoff a tax refund owed to Debtor against Debtor's tax debt. The Court found that § 1141, discussing the binding nature of a confirmed plan, does not apply to the setoff provision § 553, based on the plain language of that setoff provision. However, the Court found, although § 553 preserved a creditor's setoff rights even in light of a confirmed plan, that it is also logically consistent for the Code to preserve, as a corollary to the preservation of setoff rights, any defenses to those rights that existed outside of the bankruptcy. Therefore, wavier could be a defense to setoff and the Federal Government could have waived its rights to setoff by its conduct. In light of this ruling, the Court determined that further evidence on waiver was needed before it could reach a decision on whether the Federal Government had, in fact, waived those rights. In re Ronnie Dowdy, Inc., 314 B.R. 182 (Bankr. E.D. Ark. 2004)
Court sustained Chapter 13 Trustee's objection to claim where creditor failed to have its lien recorded on the subject vehicle's certificate of title in accordance with Arkansas' Vehicle Titling Statute. Creditor failed to establish that it had an equitable lien, and in any case, Court held that the Trustee's avoidance powers are superior to equitable liens. Although Debtor had listed creditor as secured in its confirmed plan, the Court held that such language was not binding, nor did it afford res judicata effect because of language in the plan confirmation order providing that all debts referred to in the Debtor's plan meant "allowed claims," and the creditor's claim had not yet been allowed. In re Shelby, 313 B.R. 292 (Bankr. E.D. Ark. 2004).
Court overruled Chapter 13 Trustee's objection to claim where creditor had proven that its lien was recorded on the subject vehicles' certificates of title in accordance with Arkansas' Vehicle Titling Statute although creditor subsequently lost those titles. The Court held that once the requirements of the Arkansas' Vehicle Titling Statute were met, the creditor had perfected its security interest; there is no requirement that it be able to produce a copy of the title, and no provision under Arkansas law causing it to lose its perfection upon losing the titles. In re Hill, 313 B.R. 290 (Bankr. E.D. Ark. 2004).
Creditor's alleged failure to attach writing to proof of claim did not render claim invalid. The Court found no cause to reconsider allowed claim where Debtors presented no evidence to dispute the merits or validity of the claim, and failed to justify a two-year delay in moving for reconsideration of the claim. Additionally, the Debtors do not have standing to object to the transfer of a claim under Rule 3001, and accordingly, no alleged deficiency in the claim transfer can serve as cause for reconsideration of a claim under § 502(j). Not selected for publication.