This U.S. Supreme Court ruling prohibits the debtors ability to “strip- down” a secured mortgage in a Chapter 7 bankruptcy case.    A “strip-down” would allow the debtor to only be obligated to repay the fair market value of the property, even though the outstanding debt may be significantly greater than the value of the mortgaged property.   Here, in […]

Here, a secured creditor objected to confirmation of debtors’ Chapter 13 plan, contending that the value assigned to a car, in which creditor held a security interest, was too low. The debtors valued their vehicle at $3,500 and proposed to “cram down” this value to the secured lender, who was owed more than $11,000. Secured […]

Debtor’s Discharge denied by the Court in this Case of excessive pre-filing credit card charges. Here, the debtors incurred nearly $44,000 of charges on their American Express charge card within a two month period. The account statements indicated that during this two month period, charges were placed for eight items of jewelry, including six diamond rings […]

A Texas Bankruptcy Court previously held that a debtor in a Chapter 13 bankruptcy case does not need to pay interest on the arrearage owing unless the contractual language in the mortgage provided for interest in the event of unpaid arrearages and the filing of bankruptcy. See In re Sanchez (Bkrtcy. E.D. Texas, Judge Sharp WL […]

In this old Bankruptcy Code case, U.S. Supreme Court held that a Chapter 13 debtor must pay interest toward the arrearages owing on an oversecured residential mortgage. In this case, debtors’ Chapter 13 plan proposed to repay all future payments due on the mortgage note and cure the default on the mortgage by paying off the arrearage […]

Here, the debtor was introduced to a bank by a known customer, who had an ongoing relationship with the bank, and the known customer verbally agreed to guarantee the loan. The financial statement submitted by the new borrower did not alert the bank that further investigation of the borrower’s credit was warranted. Hence, although the […]

Prior to this 1993 case, various courts across the country had issued conflicting opinions as to whether a Chapter 13 debtor could repay a secured mortgage on his/her residence by classifying the loan as secured only to the extent of the value of the property and proposing to repay the balance as an unsecured creditor. […]

Here, the Chapter 13 debtors moved to hold Idaho Central Credit Union in contempt for allegedly violating the Bankruptcy Court’s automatic stay after the credit union froze members’ funds on deposit. Debtors also sought sanctions against the credit union for the alleged violation. The credit union responded by contending it did not violate the automatic […]

In this case, the debtor transferred his interest in his real estate to another individual within one year prior to filing for bankruptcy. Here, the debtor owned real estate that was listed for sale at the price of $389,000. The Bankruptcy Code requires a debtor to file with the Court any transfers of property made […]

In this case, the debtor filed a Chapter 13 Bankruptcy proposing to repay his student loans in full, but also proposing to repay zero percent to other unsecured creditors. The debtor owed about $5,250.00 on unsecured student loans. He also had $19,415.00 in other unsecured loans. In this case, debtor’s student loans would not have […]