All posts tagged chapter 13

Judge Neil Bason Hearing Times to Change

Judge Bason News:

Starting with the 8/30 Calendar, the confirmation hearings will begin at 9:00 a.m.

Aki Koyama

cdcbaa Program: How to Get a Chapter 13 Case Confirmed and Post Confirmation Issues

Central District Consumer Bankruptcy Attorneys Association

How to Get a Chapter 13 Case Confirmed and Post Confirmation Issues

 May 19, 2012

 Speakers:

Omid Moezzi, Staff Attorney to Chapter 13 Trustee Nancy Curry

Angela Gill, Staff Attorney to Chapter 13 Trustee Kathy Dockery

 Where:  Southwestern Law School

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Chapter 13 Plan Modification: Does the Applicable Commitment Period Still Apply?

Does the applicable commitment period and 1325(b) still apply when you modify a plan?

For a no, see In re Mattson, No. 11-1478 (B.A.P. 9th Cir. April 5, 2012) which followed the holding in In re: Sunahara on this issue.  The Mattson court suggested that possible justifications for a shortened plan period might be retirement, leaving the employment market, changing jobs, or anticipated health issues justifying a shorter plan.

Aki Koyama
Staff Attorney for Kathy Dockery, Chapter 13 Trustee

Judge Mark Houle Tentative on the Chapter 13 Addendum

Judge Mark Houle in Riverside has written a very nice tentative on the addendum and specifically whether it has been preempted by new Bankruptcy Rule 3002.1.  You can get the tentative ruling here.  Addendum-TENTATIVE- Houle His position is that the addendum remains alive and well.

New Opinion on Lam Motions in Chapter 20

In re Frazier, 2012 Westlaw 812387 (E.D. Cal. March 2012), the District Court has affirmed the bankruptcy court’s ruling allowing a residential lien strip notwithstanding no discharge in the chapter 13.  The court says, “Instead of discharge, the Court agrees with the underlying Bankruptcy Court and finds plan completion is the appropriate end to Appellees’ Chapter 20 case.  The lien strip will become permanent not upon a discharge, as would happen in a typical Chapter 13 case, but upon completion of all payments as required by the plan. See In re Blenheim, 2011 WL 6779709 (Bankr.W.D.Wash. Dec.27, 2011).”

Chapter 13 Day with Judge Ahart

I had a very pleasant chapter 13 confirmation hearing this morning with Judge Ahart.  I got to court an hour and a half before the hearing.  The trustee’s attorney told me everything was okay and the plan would be confirmed and I could leave.   I commented that I was surprised that it wasn’t more crowded, even an hour and a half early.  She said Judge Ahart’s calendar is very efficient and sometimes he is on second call by 11:00am.  If you are not there by then, you risk the case being dismissed.

Bankruptcy Filings in the Central District Exceed all of Texas AND all of New York in February, 2012

Total bankruptcy filings in February in the Central District of California was 9,307, up 1% from January but 12% lower than the previous February.  To put the total into context, the TOTAL filings in February, 2012 for all four districts in Texas AND all four districts in New York was 7,830.  Of the total here, 2,256 were chapter 13s or about 24% of the total.  This means each trustee received about 450 new cases in February.

Central   District of California
2008 2009 2010 % 2011 2012
Jan 3,694 6,004 9,013 50% 10,868 21% 8,835 -19%
Feb 3,787 6,971 9,659 39% 10,631 10% 9,307 -12%
March 4,381 8,529 12,840 51% 13,543 5%
April 5,023 8,512 12,114 42% 12,087 0%
May 5,177 8,967 11,906 33% 11,669 -2%
June 5,351 9,595 12,190 27% 11,718 -4%
July 5,983 9,894 12,737 29% 10,418 -18%
Aug 6,195 9,748 12,720 30% 11,496 -10%
Sept 6,290 9,214 12,412 35% 10,006 -19%
Oct 6,364 10,322 11,753 14% 9,887 -16%
Nov 6,029 9,462 10,900 15% 9,099 -17%
Dec 6,615 9,864 10,925 11% 9,089 -17%
64,889 107,082 139,169 30% 130,511 -6%
% of total 0.059 0.075 0.089 0.095

 

Update Chapter 20 Lam Motions

Judge Catherine Bauer ruled today that a discharge is required for a successful Lam Motion.     

NACBA filed an amicus brief on this issue for an appeal in the 7th Circuit District Court.  See attached.

What goes in the 109(e) bucket? Santos v. Dockery goes to the 9th Circuit Court of Appeals

When I explain Chapter 13 to clients, I usually describe the amount of general unsecured claims as being the size of the clients' “bucket” and I explain that their plan payments might fill 0% to 100% of the “bucket” during the plan, before the “b

ucket” is tossed out (discharged), with certain exceptions such as student loans, for example.

Section 109(e) provides a limit on the maximum size of the “bucket” for individuals and spouses. To be eligible for Chapter 13, debtor(s) must owe “on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $360,475…” This amount was set as of April 1, 2010 and is adjusted every three years. It applies uniformly accross the country, despite the significant variations in real estate values and amounts of home loans.

In depressed (or recessed) real estate markets, like now, it is common for debtors to use Chapter 13 to avoid junior undersecured home loans pursuant to 11 U.S.C. Sections 506(a) and (d). In states with relatively high real estate values, like California, junior home loans can be hundreds of thousands of dollars. If the avoided junior home loan increases the debtors' “bucket” size, then they often become ineligible for Chapter 13. As a practical matter, middle class consumer debtors are excluded from the more complicated and expensive Chapter 11 and must therefore surrender their homes.

Persuasive statutory and public policy arguments favor not counting undersecured junior home loans subject to 11 U.S.C. Section 506, in the 109(e) unsecured debt limit. Santos v. Dockery (In re Santos), Case Number 12-55145, is now pending before the 9th Circuit Court of Appeals seeking a ruling on this important consumer debtor issue.

On January 20, 2012 Santos appealed a District Court order affirming the Bankruptcy Court's order dismissing their case upon a finding that they were inelgible to be Chapter 13 debtors due to their unsecured debts being above the 109(e) unsecured debt limit. The Debtors had secured claims against their primary residence that were subject to 522(f) and 506 which were determined to put them over the limit. The Bankruptcy Court followed Smith v. Rojas, 435 B.R. 637, 649-650 (9th Cir. BAP 2010). The District Court read 109(e) as “noncontingent, liquidated and unsecured debts” rather than “noncontingent, liquidated, unsecured debts”, a subtle and significant difference from the plain language.

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