United States Trustee filed a motion to dismiss chapter 7 case due to excess disposable income under section 707(b)(2). Debtors had claimed a vehicle ownership expense associated with an unencumbered vehicle. The United States Trustee argued that a vehicle ownership expense was only permissible in cases where the debtors were making monthly lease or debt service payments on the vehicle. The bankruptcy court, Judge Robert D. Berger, ruled in favor of the debtors, holding that the ownership of the vehicle rather than an encumbrance on the vehicle entitled debtors to the ownership expense. The United States Trustee appealed to the federal district court. District Judge John W. Lungstrum reversed the decision of the bankruptcy court, ruling that the vehicle ownership expense was only appropriate for vehicles encumbered by a monthly payment. In re Thomas remains the only Kansas appellate decision on this issue, which has divided bankruptcy and appellate courts around the country on an even basis.
In re Close, 384 B.R. 856 (D. Kan. 2008)
Bankruptcy & Debt
Mar 28, 2008
Bankruptcy Court Affirmed--Motion Denied
The United States Trustee filed a motion to dismiss pursuant to section 707(b)(2). The meeting of creditors had been continued to address concerns regarding debtors' means test. The United States Trustee filed a statement of presumed abuse within 10 days of the conclusion of meeting of creditors, and filed a motion to dismiss within 30 days thereafter. Debtors argued that pursuant to section 704(b)(2), the deadlines ran from the first date set for the meeting of creditors rather than the conclusion of the meeting. The United States Trustee had been taking the opposite approach nationally. On October 18, 2006, the bankruptcy court, Judge Robert D. Berger, ruled in favor of the debtors. The United States Trustee appealed the decision to the federal district court. District Judge Julie A. Robinson affirmed the ruling of the bankruptcy court. The bankruptcy court's decision in In re Close, found at 353 B.R. 915, was the first in the nation to address this issue. It has subsequently been followed by a large majority of subsequent cases from around the country.
Bank of Commerce & Trust Co. v. Schupbach (In re Schupbach)
Bankruptcy & Debt
May 19, 2015
BAP Affirmed--Appeal dismissed as moot
Creditor sought to hold debt non-dischargeable. Bankruptcy court held for debtors after trial. Creditor appealed. During appeal, Debtors filed chapter 11 plan providing that claim, dischargeable or not, would be paid in full through the surrender of collateral. The Plan was confirmed and the Debtors filed a motion to dismiss the appeal as moot. The BAP granted the motion. On appeal by the creditor to the 10th Circuit Court of Appeals, the court held that the confirmation of the plan was binding as to the treatment of the claim. Because the claim had been paid in full, the dischargeability of the claim became irrelevant and the dismissal on mootness grounds was affirmed. 2015 U.S. App. LEXIS 8192, *1, 607 Fed. Appx. 831 (10th Cir. 2015)