F. Lee Bailey Files Chapter 13 In Portland Maine – Chapter 13 Trustee Annoyed

Think your chapter 13 trustee is tough?  This is what the trustee filed last week in F. Lee Bailey’s Chapter 13 case.

UNITED STATES BANKRUPTCY COURT District of Maine

In the matter of F. LEE BAILEY Chapter 13 Debtor Case # 17-20323

TRUSTEE’S COMMENTS ON CONFIRMATION OF DEBTOR’S PLAN

NOW COMES the standing Chapter 13 trustee Peter C. Fessenden and submits the following comments in connection with confirmation of the debtor’s plan.

1/ The debtor filed for relief on June 26, 2017. This is the second bankruptcy filing by Mr. Bailey in Maine. He filed a Chapter 7 case (16-20375) on June 24, 2016 and received a discharge under that chapter on October 5, 2016.

2/ The debtor’s plan (DE#13) provides for 54 payments of $313 per month. The debtor is current. Attached is a copy of the trustee’s record of payments received from and/or on behalf of the debtor.

3/ The debtor’s schedules (DE#11) show two creditors, both with secured claims: Wells Fargo Home Mortgage, which holds the mortgage on his condominium in Yarmouth, and the Internal Revenue Service, which holds tax liens on all of the debtor’s property against which a tax lien can be asserted. Both secured creditors have in rem claims only, where the underlying in personam obligations were discharged in the Chapter 7 case. The debtor proposes to surrender his Yarmouth property in full satisfaction of the debt to Wells Fargo (or to modify the mortgage, but apparently without reaffirming the debt). He further proposes to pay the value of the property subject to the IRS’ liens and to discharge those and any other liens that the IRS might assert. Neither creditor has filed a proof of claim, the deadlines for which are distant.

4/ Hard cases make bad law. This case is harder than most. It pits the powerful, petulant and vengeful IRS against an unrepentant and self-righteous tax scofflaw. There is substantial law supporting each side. There is little moral foundation for either. The trustee will endeavor to minimize (or entirely avoid, if possible) collateral damage to the administration of Chapter 13 cases in Maine and to the body of case law that guides individual reorganization nationally.

5/ The IRS has filed an objection (DE#18) to confirmation. Resolution of that objection is a prerequisite for the trustee to determine his position.

WHEREFORE, the trustee prays that the court take such action and issue such orders as will do substantial justice.

11 August 2017 /s/ Peter C. Fessenden, Esq.  Standing Chapter 13 Trustee

Post Office Box 429 Brunswick, Maine 04011-0429 (207) 725-1300

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