On February 28, 2013, Michael & Maricar Santos (“Debtors”) filed a Chapter 7 voluntary petition. On June 17, 2013, Debtors received a standard discharge. The Chapter 7 case, however, remained open.
On October 4, 2016, Debtors filed a motion to convert case from Chapter 7 to 13. On October 12, 2016, Trustee filed his opposition. On November 2, 2016, Debtors filed a reply. A hearing on the matter was held on November 9, 2016. The hearing was continued to allow for additional briefing on the issue whether, and in what circumstances, a Chapter 7 case could be converted to a Chapter 13 post-discharge. Debtor filed their response on November 18, 2016. Trustee filed their response on November 29, 2016. Read more…
The Diaz case (In re Diaz, 547 B.R. 329, 9th Cir. BAP), has not received enough love but I find it to be too fascinating not to write about because of its potential for so much advantage!
There were essentially two holdings in the case:
- The California homestead exemption contains a “residence” requirement which includes an “intent” component; and
- The burden is on the Debtor to prove intent.
The intent component of the residence requirement requires that debtors have a bona fide intention to make the premises their home or residence.
I had a great time on Friday doing a program for the Federal Bar Assn with Judge Sandra Klein. We tried to summarize the various code sections and rules that circumscribe unbundling and limited scope representation, at least in the central district. The point was to show that there are really not very many black-letter rules. The point also is that attys may enter into agreements with persons which limit the efforts the atty will make on behalf of the person – subject to only a few rules.
I will summarize the rules. It helps me get it clear in my head.
United State Constitution – nothing (tongue firmly in cheek). Read more…
Email from Maggie Bordeaux:
We still need volunteers for the reaffirmation hearings scheduled for tomorrow morning, 11/15 at: Read more…
I will probably get pitched out of the consumer bar for saying this but I like the San Diego Chapter 7 RARA. You can access the form here. The form would make a nice retainer agreement. Most of the body of the form is below. Read more…
Judge Scott Clarkson has entered an Order entitled (in part) ORDER (1) REFERRING MATTER TO (a) THE OFFICE OF THE INSPECTOR GENERAL FOR THE DEPARTMENT OF JUSTICE AND (b) THE EXECUTIVE OFFICE OF THE UNITED STATES TRUSTEE in the matter of In re Cherrett, Case No. 6:13-bk-24792-SC. The Order states (in part) as follows:
“In the end, the process of administration of this estate, and the delay of consideration of closing of this estate by the Court, may have been improperly inhibited. It was not the role of the U.S. Trustee, which is not a party to the appeal, to provide a de facto stay pending appeal. By its affirmative actions, the U.S. Trustee may have intentionally favored one party to the possible detriment of another party, which if true, this Court finds unjustified and offensive.
Based upon the record as a whole and for the reasons set forth on the record,
IT IS ORDERED AS FOLLOWS:
1. The Court hereby refers this matter to the Office of the Inspector General for the Department of Justice (“OIG”) for the purpose of investigating any and all matters discussed at length during the September 13, 2016 hearing and as set forth in the Court’s Order. This referral includes a request that the OIG investigate and determine whether the U.S. Trustee behaved improperly or engaged in any impropriety with respect to the U.S. Trustee’s influence with the Chapter 7 Trustee resulting in the withdrawal of the Trustee’s Final Report. The Court refers this matter to the OIG for any appropriate actions, as deemed appropriate by the OIG after a full review. The Court further refers this matter to the Executive Office of the United States Trustee for whatever internal actions it may desire to take.
2. The bankruptcy court shall request and pay for a hearing transcript of the September 13, 2016 hearing, which is to be prepared on a non-expedited basis.
Download Clarkson’s Cherrett Order
From Pete Steinberg:
As you may be aware from my prior emails, my firm and I handle Plaintiff litigation arising from bankruptcy malpractice, and, like you, I am also on the Bankruptcy Mediation Panel. Read more…
I get calls all the time from people who say that so and so owes them money and just filed bankruptcy. I ask, “Did the debtor lie and cheat and steal when you loaned him the money or sold him the goods?” No – well then I would take your files and pitch them in the ocean. You are out of luck. The debtor gets his fresh start.
Now I can say, “any chance the debtor hid some assets or transferred something he owned to some relative?” If so, the Supreme Court says that MIGHT form the basis for declaring the debt to you to be non dischargeable. If the debtor really did that I usually tell the client, we can ask the court to deny his discharge altogether under section 727 but then you are in line with all other creditors whose debts are likewise not discharged. But now we can go after the debtor alone under 523(a)(2) and have the debt discharged only as to us, not everyone else. The Supreme Court really had no idea of this. Read more…
Pretty fun reading (and thankfully the right result).
Sheer v. State Bar of California (In re Sheer), — F. 3d, —- (9th Cir. April, 2016)
Issue: Was a state bar judgment requiring the debtor to repay fees to a client a non-dischargeable debt under 523(a)(7)?
Holding: No. The debt “is not a fine or penalty, but compensation for actual loss.” Read more…
My sense is that Judge Watford should have referred to the creditor’s objection to Penrod’s 506b motion rather than its objection to her Plan’s confirmation.
By challenging the bankruptcy code’s ability to modify the vehicle loan (no use of 506 where negative equity was added to the loan originated within 910 days of the petition), the creditor was litigating enforceability of its contract as falling outside the scope of the code rather than acknowledge that it’s contact was subject to the code and fighting over how the code functions – like the more general modification of contract rights that are the focus of plan confirmation, relief from stay and such.
If you take Judge Watford’s premise that the contract rights were at play because of the creditor’s plan confirmation objection, then the only way to reconcile Bos and David’s RFS opinion is to view everything through the OJ Dream Team lense where the highest priced legal team prevail in court.