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Chapter 13 Bankrtupcy

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Killjoy Bankruptcy Court Denies Debtors’ Motion to Buy Totally Boss Camaro

July 26, 2018

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Weird things happen in bankruptcy court. All you high-falutin Chapter 11 jokers out there, cruise down to the bankruptcy motions calendar one day.  You will see sovereign citizen arguments, the increasing problem of unprepared pro se claimants relying on bogus bankruptcy petition preparers, and occasionally, the subject of this post – Chapter 13 debtors seeking court authority to buy a sweet Camaro.

 

Debtors’ Counsel:  Your Honor, it has 20 inch rims!

The Court:  But is it an IROC?

 

 

 

 

In In re Jordan, the Bankruptcy Court for the Eastern District of North Carolina addressed a way righteous motion by Chapter 13 debtors to purchase a Camaro.  Not just any Camaro, but the

Ninth Circuit Declines To Decide When Contempt Sanction Becomes Punishment

Bankruptcy courts have authority to hold in civil contempt one who refuses to comply with a bankruptcy court order, including incarceration and/or daily fines until the offender complies.[1]  But when does civil contempt[2] cross into criminal contempt, which is punitive and outside the scope of the bankruptcy court’s powers?[3]  While a bright-line rule is wanting, the 9th Circuit’s silence on a recent case implied that three years of incarceration plus a $1,000 daily fine to coerce compliance does not implicate criminal due process concerns and, therefore, is within the bounds of permissible bankruptcy court authority.

Kenny G Enterprises, LLC’s Chapter 11 case (which dealt with a developer named Kenny G, and not the world’s favorite saxophonist) was converted to Chapter 7, triggering a requirement

The Primary Purpose Test and SRP Chameleon: How the Obamacare “Penalty” Became a “Tax” Only to Become a “Penalty” Again

The Patient Protection and Affordable Care Act of 2010 (a/k/a “Obamacare” or the “ACA”), with its infamous “individual mandate”[1] (and corresponding “shared responsibility payment” (which we’ll call the “SRP”)),[2] is no stranger to controversy.  Everyone is well aware of the legal challenges mounted against the individual mandate, and the seminal SCOTUS opinion upholding the mandate as a valid exercise of Congress’s taxing power – National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). Don’t worry, we’re well aware that you, along with nearly every other American (including us here at the Bankruptcy Cave), are sick and tired of hearing about ACA squabbles.  But this post will explore one side of the ACA that you’ve almost certainly not considered, but which is interesting (to us at least).  It’s interesting because it provides the leading thought on which government exactions should and shouldn’t be

Awkward: Old Friend From Church Blocks Discharge of Student Loan Debt

Providing an exception to the axiom that no good deed goes unpunished (a wonderful phrase courtesy of Clare Booth Luce, author, Ambassador, speaker, and a model for our times even thirty years after her death), a Texas bankruptcy court recently declared nondischargeable a debt owed to a guarantor who had been forced to pay the debtor’s defaulted student loan.

The case, De La Rosa v. Kelly  (Adv. Pro. No. 17-03320 (In re Kelly, Case No. 17-32295)) was resolved by the U.S. Bankruptcy Court for the Southern District of Texas by way of summary judgment on March 23, 2018. The debtor, Tabitha Renee Kelly, borrowed $6,292 from the Texas Higher Education Coordinating Board in 2002 to pay educational expenses. The plaintiff in the adversary proceeding, Mary

You Get a Car! You Get a Car! Bankruptcy Court Gives Debtor a Car. Unsecured Creditors Get Nothing.

August 5, 2016

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So, a ruling came out in June that we in The Bankruptcy Cave have been dying to blog about (and not just so we can use the blog title above).  Forgive the delay – heavy workloads and summer vacations often preclude timely blog posts.  But this one is a doozy, better late than never on this blog post.

In re Perez, Case No. 15-31645 (Bankr. E.D. Wisc., June 3, 2016) is one of those weird Chapter 13 cases (and we know most folks’ eyes glaze over when they read “Chapter 13” – ours do too, but just keep reading for once).  It addresses the definition of “current monthly income,” which partially drives what a Chapter 13 debtor must pay unsecured creditors over time via Chapter 13 plan.  In Perez, the debtor worked for an auto dealer; part of her pay was her regular use of a “demo” car.  She was w-2’ed for it to

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