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Showing 5 posts in 6th Circuit Court of Appeals.
In re Seafort, Case No. 10-6248, Sixth Circuit Court of Appeals, February 15, 2012
On an issue of first impression before the Sixth Circuit, the Court held that post-petition income that becomes available after a debtor completes repayment of a 401(k) loan is projected disposable income that must be turned over to the Trustee for distribution to unsecured creditors pursuant to Section 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans.
In this case, both debtors (on consolidated appeal) were making payments to a 401(k) loan, which would be paid off during the life of the Chapter 13 plan. Neither debtor was making contributions to their 401(k) retirement accounts at the time the petitions were filed. The debtors proposed to use the income (available after full repayment of the 401(k) loan) to start making contributions to their 401(k) retirement accounts. The Trustee objected on the issue of whether the debtors must include the income resulting from the payoff of the 401(k) loans to their respective plans considering neither debtor was making 401(k) contributions at the time the petitions were filed. Read More ›
BAP: Chapter 7 trustee cannot avoid erroneously discharged mortgage if discharge is rescinded pre-petition
Richardson v. Citimortgage, Inc. (In re Emerson), unpublished opinion, BAP No. 11-8015 (Oct. 7, 2011).
The Bankruptcy Appellate Panel of the Sixth Circuit ("BAP") has rejected a trustee's efforts to avoid a mortgage that was mistakenly discharged because the discharge was rescinded before the debtor's bankruptcy filing. Read More ›
Inherited IRAs can be exempted under § 522(d)(12)
The Eastern District of Michigan Bankruptcy Court recently held that a debtor can exempt an inherited IRA under 11 U.S.C. § 522(d)(12).
The Eastern District Bankruptcy Court denied the Trustee's objection to an exemption claimed pursuant to § 522(d)(12) by a debtor in IRAs that she had inherited from her father. The Court further rejected the Trustee's argument that inherited IRA funds cannot be considered "retirement funds" under § 522(d)(12) because the funds were not contributed to the IRA by the debtor. Rather, the Court adopted the debtor's reasoning that the explicit language of § 522(d)(12) does not make a distinction between "inherited IRAs" and IRAs to which the debtor made the contributions. Read More ›
6th Circuit B.A.P.: Michigan's bankruptcy-specific exemption statute is unconstitutional.
In re Schafer, 6th Cir. B.A.P., Feb. 17, 2011 (2011 WL 534752, authored by Hon. Marci B. McIvor).
Under the Bankruptcy Code, debtors may choose between the federal exemptions listed in 11 U.S.C. § 522(d) or exemptions available under state law, unless their state has "opted out" of the federal exemption scheme. Michigan has not opted out, so debtors may choose between federal and state exemptions. Since 2005, Michigan law has provided two alternative state-law exemption schemes: Read More ›
Action for Injunctive Relief is Not "Claim" Subject to Discharge For Purposes of Obtaining Relief From the Automatic Stay
In re Hillenbrand, Bankr. E.D. Mich., Feb. 4, 2010 (Case No. 09-75574, Hon. Steven Rhodes).
Although the commencement of a bankruptcy case usually stays a pending state court action against the debtor, a recent decision of the Bankruptcy Court for the Eastern District of Michigan concluded that the stay does not preclude an action seeking an injunction. Read More ›