Smith v. Montgomery (In re Montgomery)

(Bankr. S.D. Ind. Apr. 28, 2015)

The bankruptcy court dismisses the creditor’s complaint objecting to the discharge of her claim under § 523(a)(6). The Chapter 13 debtor was proceeding towards a full-compliance discharge under § 1328(a), and thus would be entitled to a discharge of debts under 523(a)(6). The court reasons that the issues raised by the creditor are not ripe for review unless and until the debtor moves for a hardship discharge, in which case debts described in § 523(a)(6) would not be discharged. Opinion below.

2015-04-28 – smith v montgomery

Author: Matt Lindblom

In re Marcus-Rehtmeyer

(7th Cir. Apr. 28, 2015)

The Seventh Circuit reverses the district court’s order affirming the bankruptcy court’s order denying the creditor’s objection to the debtor’s discharge. The creditor obtained a judgment against the debtor in state court and conducted post-judgment discovery to collect on the judgment. The debtor omitted assets in her responses to the discovery requests and then filed a Chapter 7 petition. The bankruptcy court found that the debtor’s explanations for the omissions were credible and denied the discharge objection. The Seventh Circuit reverses, finding the bankruptcy court’s findings were clearly erroneous. Opinion below.

2015-04-28 – in re marcus-rehtmeyer

Author: Matt Lindblom

In re Brooks

(7th Cir. Apr. 23, 2015)

The trustee argued that child support payments should not be categorically excluded from the calculation of a chapter 13 debtor’s disposable income. The debtor was an above-median debtor receiving $400 per month in child support payments. The trustee contended this amount should not be excluded from her disposable income because she also applied the standard deductions, which, he argued, duplicated expenses that would be covered by the child support payments. The Seventh Circuit holds that the bankruptcy court correctly excluded the payments from the debtor’s disposable income. Opinion below.

2015-04-23 – in re brooks

Author: Matt Lindblom

Baxter v. Sarmadi

(6th Cir. Apr. 22, 2015)

The Sixth Circuit affirms the bankruptcy court’s annulment of the automatic stay, ratifying a foreclosure sale that took place post petition. The debtor filed a chapter 13 petition on the day before the foreclosure sale, and the bankruptcy court found that the debtor intentionally withheld the filing from the creditor. The court found that the debtor’s behavior constituted “cause” sufficient to annul the automatic stay. Opinion below.

2015-04-22 – baxter v sarmadi

Author: Matt Lindblom

Sullivan v. Glenn

(7th Cir. Apr. 2, 2015)

The Seventh Circuit affirms the bankruptcy court’s decision that a debt found nondischargeable in an agent’s bankruptcy is not necessarily nondischargeable in the principal’s bankruptcy. The debtor’s loan broker had obtained a $250,000 loan for the debtor from the broker’s friend by misrepresenting that a bank had approved a $1 million line of credit for the debtor which would be used to pay back the loan in a few weeks. The debtor was not aware of the misrepresentation. The loan broker and the debtor gave promissory notes to the lender. Both the broker and the debtor filed bankruptcies. The debt was held nondischargeable in the broker’s bankruptcy. The lender argued in the debtor’s bankruptcy that because the debt was obtained by fraud, it could not be discharged by the debtor, even if he had no knowledge of the fraud. The court holds that, absent any showing that the debtor knew or should have known of the fraud, the debt was properly discharged in the debtor’s bankruptcy. Opinion below.

2015-04-02 – sullivan v glenn

Author: Matt Lindblom