In re Carter, Case No. 20-00653-NPO (Bankr. S.D. Miss. June 26, 2020)
Jun 26, 2020
OUTCOME: Joint debtor dismissed
Because the Debtors’ aggregate unsecured debt exceeded $419,275.00, they were not eligible to be debtors in a joint chapter 13 case, regardless of their eligibility to file individual chapter 13 cases,... pursuant to the plain meaning of § 109(e). Though the Trustee sought dismissal of the bankruptcy case, the Court found there were alternatives to dismissal. Therefore, before dismissing the bankruptcy case, the Court provided the Debtors with an opportunity to sever or convert the bankruptcy case or exercise some other option.
Bankruptcy and debt
In re Owens, Case No. 18-04738-NPO (Bankr. S.D. Miss. Dec. 12, 2019)
Dec 12, 2019
OUTCOME: Debtor Plan Modified
Chapter 13: The Debtor purchased and financed a vehicle with the Creditor. The Debtor agreedto make bi-weekly payments and, among other things, to maintain collision insurance on thevehicle with the Cr...editor named as the loss payee. The same day as the purchase, the Debtorattempted to relinquish possession of the vehicle to the Creditor because the transmission wasmalfunctioning, and the odometer was not working. The Creditor, however, refused to accept thevehicle, refund the down payment, or repair the vehicle. Two (2) months later, the Debtor againattempted to return the vehicle to the Creditor because the vehicle still was not working properly.The Creditor kept the vehicle for three (3) to four (4) months to repair the problems. The Creditorrepresented to the Debtor that the vehicle was fixed, but the Debtor continued to have issues withthe vehicle. At some point after purchasing the vehicle but before filing the bankruptcy case, theDebtor allowed the collision insurance to lapse on the vehicle.\
In her chapter 13 plan, the Debtor identified the vehicle as a “910” motor vehicle that she intended to retain and pay the Creditor the amount of its secured claim in full. After confirmation of the plan, the vehicle completely stopped working and could not reasonably be repaired. The Debtor filed a motion asking the Court for permission to modify the plan to surrender the vehicle to the Creditor and cease payments to the Creditor. The Creditor filed a response opposing modification of the confirmed plan.
The Court recognized that there is a split among courts regarding a debtor's ability to modify a
plan to surrender collateral and treat any deficiency as an unsecured claim. The Court previously
had joined the majority view that such action is authorized by § 1329(a)(1) and (3) and is consistent with § 502(j) as to the reclassification and reconsideration of secured claims. In that regard, § 1329(a)(1) allows a debtor to modify a plan to “increase or reduce the amount of payments on claims of a particular class provided for by the plan.” Section 1329(a)(3) allows a debtor to “alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim other than under the plan.” Finally, § 502(j) allows for reconsideration of a claim if “cause” has been shown according to the requirements of Rule 60(b) of the Federal Rules of Civil Procedure and if the “equities of the case” support reconsideration. The Court found that the undisputed evidence established that the Debtorproposed the plan in good faith and intended in good faith to continue driving the vehicle.
Although the Debtor allowed the collision insurance to lapse on the vehicle at some point, the
Court rejected the view that a lapse of insurance creates a per se showing of bad faith. The Court
found that there was cause to reconsider the claim and necessary relief because the surrender of
the vehicle demanded a change in the treatment of the Creditor’s claim in the plan. The Court held that the equities of the case weighed in favor of the modification. The Court granted the motionand allowed the Debtor to surrender the vehicle and treat any deficiency as an unsecured claim.
Bankruptcy and debt
IN RE NICKELSON
Feb 19, 2016
OUTCOME: Judgment for the Debtor
Adversary Proceeding filed by the Debtor for Constructive Fraudulent Transfer and Fraud against a Lender
