Showing 13 posts from 2011.
Effective December 1, 2011, the Federal Rules of Bankruptcy Procedure (FRBP) that govern filing a proof of claim will change dramatically.
FRBP 3001 will be amended to increase the types of information required to be attached to a proof of claim. While Rule 3001 has always required a claimant to produce a writing to support its claim, now a claimant must also attach information relative to the principal, interest, fees, and any other expenses incurred pre-petition - including arrearages. 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BAP: Chapter 7 trustee cannot avoid erroneously discharged mortgage if discharge is rescinded pre-petition
Richardson v. Citimortgage, Inc. (In re Emerson), unpublished opinion, BAP No. 11-8015 (Oct. 7, 2011).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("BAP") has rejected a trustee's efforts to avoid a mortgage that was mistakenly discharged because the discharge was rescinded before the debtor's bankruptcy filing.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 ›
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 ›
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 ›
Categories: U.S. Supreme Court
Creditors Cannot Benefit from Trustee and Debtor's Stipulation to Extend Deadline for Filing a Nondischargeability Complaint
Creditors who wish to object to the dischargeability of a debt must follow strict deadlines - and as one recent case illustrates, creditors cannot rely on an extension of those deadlines that is agreed upon by the debtor and the trustee.
In Five Star Laser, Inc., the District Court for the Eastern District of Michigan upheld Judge Rhodes' decision granting a debtor's motion to dismiss a nondischargeability complaint as untimely and holding that a stipulation entered into by the debtor and the bankruptcy trustee to extend the deadline for filing a nondischargeability complaint applied to the trustee only. Read More ›
Categories: Eastern District of Michigan
District Court Affirms In Re Rahim: Chapter 7 Business Debtors' Case May Be Dismissed Under § 707(a)
In re Rahim, E.D. Mich., May 23, 2011 (Case No. 10-15123, Hon. Sean F. Cox).
Previously on this blog, we discussed In re Rahim, a case in which Judge Rhodes dismissed the Chapter 7 case of debtors with primarily non-consumer debts "for cause" under 11 U.S.C. § 707(a) because the case was not filed in good faith. The debtors, both practicing physicians, brought home an annual income of more than $500,000 and had multiple homes and luxury vehicles. Read More ›
Johnson v CACH, LLC (In re Johnson), E.D. Mich., December 20, 2010 (Case No. 10-12873, Hon. Robert H. Cleland)
When a creditor has a state court judgment, garnishing the judgment debtor's state income tax refund is a common collection method. If the judgment debtor files bankruptcy, issues often arise as to whether the creditor can keep the refund or whether the debtor is entitled to recover and exempt the refund. Read More ›
Did You Know? | Debtors and Non-Filing Spouses May Lose Right to Rebut Presumption of Equal Ownership if Debtor Has Equal Rights to Asset
Often in bankruptcy cases involving a debtor with a non-filing spouse, the presumption of equal ownership arises. Subject to certain exclusions, Section 541 of the Bankruptcy Code provides that all property in which the debtor has a legal or equitable ownership interest becomes property of the estate at the commencement of the case. This includes property the debtor owns with a non-filing spouse. In some situations, particularly if the debtor does not have an exemption available, the debtor will try to rebut the presumption of equal ownership. Read More ›
Did You Know? | Creditors have affirmative duty to release garnishments following bankruptcy filing.
In the "Did You Know?" section of the Michigan Bankruptcy Blog, we feature opinions that are not newly issued but that may be helpful for Michigan bankruptcy practitioners.
When a person files bankruptcy, most collection actions are automatically stayed. Subject to certain exceptions, Section 362 of the Bankruptcy Code prohibits the commencement or continuation of an action to recover a pre-petition claim, the enforcement of a pre-petition judgment, and any act to collect a pre-petition claim against the debtor, among other things. Read More ›
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 ›