In re Stapp

(Bankr. S.D. Ind. Aug. 21, 2017)

The bankruptcy court permits the creditor to file a 11 U.S.C. § 523(a)(3)(B) complaint. The creditor moved for leave to file its complaint because it had not received notice of the bankruptcy and the deadline for § 523 complaints had passed. The court finds that the debtor should have scheduled the creditor and that leave was not required given that § 523(a)(3)(B) allowed § 523 claims to be filed at any time if a creditor was not given proper notice of the bankruptcy filing. The court denies the motion with respect to the request to file a § 727 claim because the Bankruptcy Code does not contain a similar provision for those claims. Opinion below.

Judge: Moberly

Attorneys for Debtor: Tucker Legal Services, PC, William J. Tucker, Bradley J. Bucheit

Attorneys for Creditor: Riley Bennett Egloff LLP, Anthony R. Jost, Bryce H. Bennett, Jr.

2017-08-21 – in re stapp

Author: Matt Lindblom

Indiana Department of Workforce Development v. Coulter (In re Coulter)

(Bankr. S.D. Ind. Apr. 8, 2016)

The bankruptcy court rules that the government’s claim for penalties incurred by the debtor for false representations in unemployment benefit applications are not dischargeable. The debtor conceded that the debt for repayment of benefits was not dischargeable but disputed that the penalties imposed were dischargeable. The court finds that the penalties arose out of the fraudulent representations and thus were not dischargeable pursuant to 11 U.S.C. § 523(a)(2). Opinion below.

Judge: Lorch

Attorney for Plaintiff: Office of the Indiana Attorney General, Maricel E.V. Smiles

Attorney for Debtor: Lloyd E. Koehler

2016-04-08 – in re coulter

Author: Matt Lindblom

Bush v. United States (In re Bush)

(Bankr. S.D. Ind. Apr. 8, 2016)

The bankruptcy court addresses whether certain tax penalty claims are dischargeable. The court finds certain penalties are dischargeable because they arose out of tax returns filed outside the three-year window provided in 11 U.S.C. § 523(a)(7). However, other penalties were not dischargeable because they arose out of a tax return filed within the three-year window. Opinion below.

Judge: Carr

Attorney for Debtors: Camden & Meridew, P.C., Julie A. Camden

Attorneys for Defendant: U.S. Department of Justice, Tax Division, Sarah Thomas Mayhew, Peter Sklarew

2016-04-08 – in re bush

Author: Matt Lindblom

National Labor Relations Board v. Calvert (In re Calvert)

(Bankr. S.D. Ind. Dec. 21, 2015)

The court enters judgment in this adversary proceeding commenced by the NLRB against the debtor, seeking to except from discharge the debt owed to the NLRB. The claim was based on alleged violations of the National Labor Relations Act, when the debtor took steps to avoid his company’s employees from unionizing. The court finds that the NLRB failed to prove the requisite intent under 11 U.S.C. § 523(a)(6) and the information omitted from the schedules and in the bankruptcy (e.g., lost promissory notes) did not rise to the level of a denial of discharge under § 727. Opinion below.

2015-12-21 – nlrb v calvert

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

Tetzlaff v. Educational Credit Management Corporation

(7th Cir. July 22, 2015)

The Seventh Circuit affirms the bankruptcy court’s determination that the $260,000 student loan debt was not dischargeable. The debtor had obtained a business degree and a law degree, but had not been able to pass the bar exam. The debtor claimed mental illness prevented him from securing employment and earning sufficient income in the future. The court applies the Brunner test and finds that the debtor failed to show an undue hardship. Opinion below.

2015-07-22 – tetzlaff v educational credit management

Author: Matt Lindblom

In re Sheppard

(6th Cir. B.A.P. July 9, 2015)

The Bankruptcy Appellate Panel for the Sixth Circuit reverses the bankruptcy court’s order denying the creditor’s motion for extension of time to file a complaint to determine the dischargeability of a debt and/or file an objection to the debtor’s discharge. The debtor’s counsel had been working with the creditor’s counsel prior to the bankruptcy filing but failed to notify the creditor’s counsel of the bankruptcy. Instead, the debtor gave notice to the creditor by sending a notice to the creditor’s out-of-state corporate headquarters. The creditor and its counsel had actual notice of the bankruptcy after they filed a complaint against the debtor in state court after the petition was filed and two days before the deadline. The bankruptcy court found that the creditor failed to show sufficient cause justifying an extension. The B.A.P. holds that such motions should be liberally granted when the circumstances merit such a finding, and in this case there was sufficient justification. Opinion below.

2015-07-09 – in re sheppard

Author: Matt Lindblom

In re Doyne

(6th Cir. B.A.P. Dec. 4, 2014)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s denial of the creditor’s motion to extend the deadline to object to the debtor’s discharge. The court holds that the deadline for discharge objections is not jurisdictional and thus the bankruptcy court did have discretion to extend the deadline. The bankruptcy court did not abuse its discretion in denying the creditor’s request. The court relied on the factors for equitable tolling set forth in In re Maughan: (1) lack of actual notice of filing requirement; (2) lack of constructive knowledge of filing requirement; (3) diligence in pursuing one’s rights; (4) absence of prejudice to the defendant; and (5) a plaintiff’s reasonableness in remaining ignorant of the notice requirement. The creditor argued that the extension was warranted because his attorney had been in a car wreck that gave him a severe concussion, causing him to miss weeks of work. The bankruptcy court determined that equitable tolling should not be permitted, and the appellate court affirmed. Opinion below.

2014-12-04 – in re doyne

Skavysh v. Katsman (In re Katsman)

(7th Cir. Nov. 19, 2014)

The Seventh Circuit holds the debtor’s discharge should be denied, affirming the district court’s reversal of the bankruptcy court’s ruling in favor of the debtor in the nondischargebility action. The Chapter 7 debtor had omitted certain creditors from her Schedule F. She testified at trial that she had done so because she intended to pay those creditors (friends and family members) on their claims after the bankruptcy. The creditor-plaintiff sought denial of her discharge under § 727(a)(4)(A), alleging the omissions (and other discrepancies in her schedules) constituted her knowingly and fraudulently making a false oath or account in the case. The Seventh Circuit held that this satisfied the statute, even though her fraudulent acts were not to her pecuniary benefit. Opinion below.

2014-11-19 – skavysh v katsman

Trudel v. U.S. Department of Education (In re Trudel)

(B.A.P. 6th Cir. Aug. 8, 2014)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order finding the the debtor was not entitled to an undue hardship discharge of approximately $130,000 in student loans. While the debtor satisfied the first prong of the Brunner test (i.e., the debtor cannot maintain a minimal standard of living for herself and her dependents if forced to repay the loan), the “additional circumstances” and “good faith” prongs were not satisfied. The debtor did have medical conditions, but they did not prevent her from performing her job functions. Opinion below.

2014-08-08 – in re trudel