In re Joseph

(Bankr. E.D. Ky. Feb. 7, 2018)

The bankruptcy court grants the debtor’s motion to enforce the discharge injunction and for sanctions. The creditor held a certificate of delinquency for unpaid real property taxes. Post-discharge, the creditor sought and obtained an in rem judgment to foreclose the tax lien. The foreclosure sale did not fully satisfy the lien, and the creditor then recorded a judgment lien against the debtor for the deficiency and sought to foreclose on other real property of the debtor. The bankruptcy court holds this is an attempt to collect on the discharged claim for the unpaid property taxes. Sanctions are appropriate under these circumstances. Opinion below.

Judge: Schaaf

Attorneys for Debtor: Ryan R. Atkinson; DelCotto Law Group PLLC, Michael J. Gartland

Attorneys for Creditor: Bilz & Associates, P.S.C., Joshua M. Bilz, David A. Schulenberg

2018-02-07 – in re joseph

Author: Matt Lindblom

In re Todd

(Bankr. S.D. Ind. April 24, 2017)

The bankruptcy court grants the debtor’s motion, finding the Indiana Department of Workforce Development in contempt for violation of the debtor’s discharge. The department garnished the debtor’s wages post-discharge based on a claim that the debtor improperly received benefits from the department prepetition. The department argued it was collecting on a post-petition claim because it had not determined the debtor was liable until after the petition date. The court rejects that argument, finding the department had a prepetition claim because it was based on prepetition conduct of the debtor. The department’s date of finding of liability did not control. Opinion below.

Judge: Lorch

Attorneys for Debtor: Kinkade & Associates, P.C., Kevin S. Kinkade

Attorney for Department: Megan E. Binder

2017-04-24 – in re todd

Author: Matt Lindblom

Hovious v. Bridgewater Homeowners Association, Inc. (In re Hovious)

(Bankr. S.D. Ind. Feb. 15, 2017)

The bankruptcy court enters judgment in favor of the debtor and against the home owners’ association but does not award any damages. The debtor argued the HOA violated the discharge injunction when it attempted to collect post-petition dues from the debtor. The debtor intended to surrender the property, but it was not clear whether the debtor had ceased occupying the residence based on evidence presented. The court finds that the HOA may have technically violated the discharge injunction but had proceeded in good faith and pursuant to a reasonable interpretation of applicable law. Opinion below.

Judge: Carr

Attorney for Debtor: Mark S. Zuckerberg

Attorney for Defendant: Thrasher Buschmann & Voelkel, P.C., Stephen Robert Donham

2017-02-15-in-re-hovious

Author: Matt Lindblom

In re Jackson

(6th Cir. B.A.P. Aug. 4, 2016)

The Sixth Circuit B.A.P. holds that the bankruptcy court abused its discretion in awarding sanctions against a creditor for violation of a discharge order in the individual’s Chapter 7 bankruptcy case. The condominium association rescheduled a sheriff’s sale of the debtor’s condominium unit to complete a pre-petition foreclosure. The bankruptcy court found that the association’s primary objective was to collect the discharged debt from the debtor, for reasons including that there was likely no equity available to pay the association through the sale. The Sixth Circuit B.A.P. holds that this was an abuse of discretion, as the association had the right to enforce its lien post-petition. Opinion below.

Judge: Humphrey

Attorney for Condominium Association: Kaman & Cusimano, Erika R. Finley, Joseph E. DiBaggio

Debtor: Pro Se

2016-08-04 – in re jackson

Author: Matt Lindblom

In re Isaacs

(Bankr. W.D. Ky. May 19, 2016)

The bankruptcy court grants summary judgment in favor of the debtor, holding a mortgage debt had been discharged in the Chapter 7 and the recording of the mortgage and foreclosure action constituted a violation of the automatic stay and the discharge injunction. The mortgagee had failed to record the mortgage prepetition, and it contained a provision that stated the lien did not attach until recorded. The court rejects the creditor’s argument that an equitable lien arose, in part because the creditor had control over attachment and simply failed to record for approximately one year before the bankruptcy was filed. The court also rejects the creditor’s argument that the post-bankruptcy state court foreclosure judgment could not be disturbed under the Rooker-Feldman doctrine. Opinion below.

Judge: Fulton

Attorney for Debtor: Marcus H. Herbert

Attorneys for Creditor: David C. Nalley, Gregory A. Stout

2016-05-19 – in re isaacs

Author: Matt Lindblom

In re Kiriazis

(6th Cir. B.A.P. Jan. 28, 2016)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order denying the creditor’s motion to reopen the bankruptcy case. The creditor’s attorney stated on the record that the creditor had committed a willful violation of the discharge injunction and that the creditor was negotiating  a resolution with the debtor. The bankruptcy court entered an order finding the creditor had violated the injunction and that punitive damages were appropriate, but left the issue of damages open for the parties to negotiate and report back to the court. The case was closed after an agreed order was entered resolving the pending motion. The creditor then sought to reopen the case and to reconsider the prior order, but the bankruptcy court refused, finding a notice of appeal was not timely filed, and the motion to reconsider was not timely. Opinion below.

2016-01-28 – in re kiriazis

Amended Opinion: 2016-02-02 – in re kiriazis

Author: Matt Lindblom

Rosco v. Lockhart

(N.D. Ind. Dec. 16, 2015)

The district court affirms the bankruptcy court’s decision finding that the creditor’s assertion of a counterclaim for unpaid rent in the state court action filed by the debtor for return of a security deposit after discharge was not a violation of the stay or the discharge injunction. Opinion below.

2015-12-16 – rosco v lockhart

Author: Matt Lindblom

In re Biery

(Bankr. E.D. Ky. Dec. 11, 2015)

The bankruptcy court concludes that class treatment is inappropriate for certain claims but is appropriate for debtors receiving regular billing statements from the mortgage servicer after discharge. The debtors are appointed as class representatives. Opinion below.

2015-12-11 – in re biery

Author: Matt Lindblom

In re Ausmus

(Bankr. W.D. Ky. Aug. 20, 2015)

The bankruptcy court holds that the creditor may not proceed with a damages hearing in state court, as the liability judgment has already been discharged in the bankruptcy. The creditor requests that the court allow her to challenge the dischargeability of the debt, despite the fact that the deadline for filing complaints to determine dischargeability has already passed. The court finds no basis to permit the late challenge. The creditor had notice of the bankruptcy and simply filed to timely file a complaint. Opinion below.

2015-08-20 – in re ausmus

Author: Matt Lindblom

In re Taylor

(7th Cir. July 20, 2015)

The Seventh Circuit holds that the bankruptcy court abused its discretion in issuing a contempt order and awarding damages to the debtor for the creditor’s alleged violation of the discharge injunction. The creditor’s adversary proceeding had been dismissed for failure to establish the creditor had standing to enforce a state court judgment. The judgment was then discharged. The creditor then went back to state court and obtained an order that stated a prior assignment of the judgment to the creditor had always been valid. The bankruptcy court held this violated the injunction. This court holds that obtaining the state court order was not an act to collect a discharged debt and it was not a collateral attack on the bankruptcy court’s orders. Opinion below.

2015-07-20 – in re taylor

Author: Matt Lindblom