In "Anna Nicole Smith" Case, U.S. Supreme Court Limits Bankruptcy Courts' Authority

Many are familiar with Anna Nicole Smith, the late television personality who married an elderly oil tycoon shortly before his death and later became embroiled in a legal battle over his estate.  Recently, the bankruptcy case of Vickie Lynn Marshall – Anna Nicole Smith's legal name – made its way to the U.S. Supreme Court and resulted in an opinion that limits the authority of bankruptcy courts to enter final orders in common law actions.

Vickie married J. Howard Marshall approximately a year before his death, and although he gave her many gifts, he did not leave her anything in his will.  Before J. Howard passed away, Vickie sued his son, Pierce, in state probate court for tortious interference with J. Howard's will.  Vickie then filed bankruptcy.  Pierce filed a nondischargeability action and a proof of claim in Vickie's bankruptcy case, asserting that Vickie had defamed him.  Vickie filed a counterclaim against Pierce, essentially restating the tort allegations from her state probate court action. Read More ›

U.S. Supreme Court: Chapter 13 Debtor Who Does Not Make Loan or Lease Payments Cannot Deduct Vehicle Ownership Expenses

Ransom v FIA Card Services, NA, Supreme Court of the United States, Jan. 11, 2011 (Case No. 09-907).

In the first opinion authored by Justice Elena Kagan, the Supreme Court of the United States held that a Chapter 13 debtor who owns a vehicle outright and thus does not make loan or lease payments cannot include vehicle ownership costs in his or her monthly expenses for purpose of the means test.

Under BAPCPA, debtors in Chapter 13 cases must follow a formula to calculate their disposable income - that is, the amount that the debtor must use to pay creditors under a court-approved Chapter 13 plan. To determine disposable income, the debtor deducts certain "reasonably necessary" expenses from his or her monthly income. Those reasonably necessary expenses, which are outlined in the IRS's "National and Local Standards," include allowances for vehicle ownership and operating costs. Read More ›

Espinosa Does Not Excuse Compliance With Bankruptcy Rules When Defect is Detected Pre-Confirmation

In re Peckens-Schmitt, Bankr. W.D. Mich., July 16, 2010 (Case No. 10-04164, Hon. Scott W. Dales).

In a notable decision, the United States Supreme Court recently upheld a bankruptcy court's confirmation of a Chapter 13 plan that discharged part of a student loan debt without an adversary proceeding where the student loan creditor had notice of the plan but did not object. United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367 (2010). Read More ›