(Chapter 13 Debtors' motion for default judgment on complaint to strip off a third priority lien set for hearing so that Debtor may put on evidence and address: (1) the appropriate date for valuation under section 506(a) and 1322(b)(2); and (2) whether Debtors are bound by the value in their schedules based on principles of res judicata or judicial estoppel)
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Opinions
Effective January 1, 2017, Orders in the United States Bankruptcy Court for the Northern District of Georgia designated by the Court as "opinions" will be transmitted to the Government Publishing Office (GPO) and made available to the public at no cost. To view these opinions, click HERE to be transferred to GPO site.
Orders designated as Opinions and issued between January 1, 2004 and December 31, 2016 are maintained on this website. Many of these Opinions are not intended for publication and are so designated. Each entry includes the style of the matter, the case number, the date entered on the docket, and a short parenthetical expression of the issue(s) raised. The most recent opinions appear first.
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Honorable Paul W. Bonapfel
(Order (1) denying motion to amend complaint to add defendant; and (2) abstaining under 28 U.S.C. 1334(c)(1) from hearing any nonbankruptcy, state law claims the Plaintiff has against the proposed added defendant. Court concluded that plaintiff’s claims against proposed defendant were strictly nonbankruptcy claims and the proposed defendant was not a necessary party for the dischargeability litigation.)
NOT INTENDED FOR PUBLICATION
(Order granting plaintiff’s motion for summary judgment and concluding that debtor’s divorce-related debts are excepted from chapter 7 discharge pursuant to 523(a)(5) and (a)(15))
NOT INTENDED FOR PUBLICATION
In joint chapter 13 case, the debtor wife died after confirmation of a zero percent plan and more than 180 days after the filing of the case. The surviving husband received $250,000 in life insurance proceeds and amended his schedules to disclose them and claimed them as exempt. The trustee objected to the exemption and filed a modification of the plan under 11 U.S.C. § 1329 to require the payment of approximately $105,000 into the plan to pay all unsecured claims in full. The debtor filed a modification to pay unsecured creditors $15,000 from the proceeds. Held:
1. The life insurance proceeds are not property of the estate under 11 U.S.C. § 541(a)(5)(C) because the debtor became entitled to them more than 180 days after the filing of the petition. The Court declined to follow the contrary view that all property a chapter 13 debtor receives after confirmation is property of the estate under 11 U.S.C. § 1306(a). The Court therefore did not resolve the Trustee’s contention that the debtor could not exempt them because he was not a dependent of his wife at the time of her death under O.C.G.A. § 44-13-100(a)(11)(C), which permits the exemption of life insurance proceeds arising from the death of a person on whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
2. Neither the “best interest of creditors” test of 11 U.S.C. § 1325(a)(4) nor the projected disposable income test of 11 U.S.C. § 1325(b) requires the use of the life insurance proceeds to pay creditors. Section 1329 permits modification by a trustee or unsecured creditor to require increased payments in accordance with a debtor’s ability to pay. Nevertheless, a modification proposed by a trustee or unsecured creditor cannot require the debtor to use proceeds of property that is exempt or is not property of the estate to pay claims under Gamble v. Brown (In re Gamble), 168 F.3d 442 (11th Cir. 1999), and Thomas v. Walden (In re Walden), Docket No. 02-6013 (11th Cir. June 13, 2002) (unpublished). (A copy of the unpublished opinion in Walden is in the record at Docket No. 72.)
3. Accordingly, the Trustee’s modification does not meet the requirements of § 1329.
4. Alternatively, if either of the rulings in (1) or (2) are erroneous, the Court, in the exercise of its discretion, does not approve the Trustee’s modification under the circumstances of the case in view of the debtor’s age, his medical condition that precluded substantial employment, and his need for the proceeds for the current and future support of himself and his family.
5. Because the debtor’s modification meets the requirements for modification in § 1329, it is approved.
NOT FOR PUBLICATION
In an indenture trust agreement, the Chapter 11 debtor "pledged and assigned" its real estate to the creditor. The debtor did not execute a deed to secure debt, and the creditor did not record the indenture trust agreement in the county real estate records. The debtor asserted that the creditor did not have a lien on the property and that any lien it did have was avoidable under the strong-arm provisions of section 544(a)(3) because the lack of recordation made it unenforceable against a bona fide purchaser. The Court ruled that the language of the trust agreement created a mortgage lien under Georgia law and that references in a lease and UCC fixture filing, both recorded in the county's real estate records, would put a purchaser on "inquiry notice" and lead to discovery of the mortgage lien. Hence, the mortgage lien was not avoidable under section 544(a)(3).
NOT INTENDED FOR PUBLICATION
Creditor with unrecorded judgment has rights under Georgia law to perfect the lien of the judgment on nonexempt property that survive the debtor's Chapter 7 bankruptcy case when the trustee does not administer the property. Because the debtor has not exempted the property, the lien is not avoidable under section 522(f).
Court denies application of secured creditor in Chapter 13 case for unclaimed funds because it does not show present entitlement to funds.
Creditor repossessed debtor's car prior to the filing of the petition, refused to return it, and sold it. Court awarded actual damages of $1,559, attorney's fees of $4,325, and punitive damages of $17,890. Court observes that creditor who repossesses car prior to bankruptcy filing cannot condition the turnover of the vehicle on the provision of adequate protection, such as proof of insurance, unless the creditor moves promptly for relief in the bankruptcy court.
The Plan Trustee sought to recover, as fraudulent transfers under Georgia law, "fictitious profits" Defendants received on their investments in a Ponzi scheme. Defendants asserted that Louisiana law applied and that the applicable limitations period barred the action. The Court concluded that the choice of law rules of the forum state apply and that Georgia law governed the issues under Georgia's choice of law rules.
The pro se Creditor contended that, in a pre-petition garnishment action, the garnishment court ordered disbursement of garnished funds to the Debtor unless the Creditor objected. The Creditor further claimed that, upon filing the objection, the garnishment court directed the Creditor to seek relief from the bankruptcy court. The Creditor then filed, in the bankruptcy court, an objection to disbursement of the funds. The Creditor did not seek relief from the automatic stay. The Debtor had not disclosed the garnishment action, did not schedule the garnished funds as an asset, and had not moved to avoid the lien under § 522(f).
The Court declined to direct disbursement of the funds in the garnishment court because it is not appropriate for a bankruptcy court to tell another court what to do. The Court ruled that the funds should be deemed to be scheduled so that:(1) they will be abandoned under § 554(c) if the Trustee does not administer them; and (2) the automatic stay will therefore terminate upon closing of the case.