The Chapter 7 Trustee objected to the proof of a fully secured claim on the ground that the Trustee abandoned the property securing the claim and that Respondent should look to its collateral for satisfaction of its debt. Objection denied. The basic issue raised is not about disallowance under section 502 but about whether the claim is fully secured under section 506(a).
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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.
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Judge James E. Massey (Retired)
In this Chapter 13 case, Debtors objected to the proof of claim of the lender, stating that they disputed its “validity” and that the claim misstated the amount of the prepetition arrearage. The relief demanded was to direct the Trustee not to pay anything to the claimant until it amended its claim. Counsel then submitted a proposed order that would have disallowed the entire claim. Objection denied. Submitting an order provides for relief not requested in the motion is unprofessional. The claim as a whole was not in dispute, and hence disallowance was not permitted under section 502.
The Chapter 7 Trustee objected to and sought disallowance of a proof of a claim that asserted it was fully secured by a mechanics lien. The premise of the objection was that the claimant should look to its collateral. The Trustee held funds derived from another source as to which the claimant asserted no interest. Objection denied. Like the objection in the Bryant case above, this one also confuses disallowance under section 502, which says nothing disallowance due to collateral for a claim, and a determination under section 506(a) that the claimant has no unsecured claim. A Chapter 7 trustee only pays unsecured claims under section 726, and this claimant asserted neither an unsecured claim nor an interest in funds held by the Trustee.
Judge Joyce Bihary (Retired)
(Overpayment of Social Security disability payments; exhaustion of administrative remedies; jurisdiction of bankruptcy court; magistrate judges, not bankruptcy judges, have delegated authority to hear Social Security actions to review administrative determinations by the Social Security Administration. Debtor did not exhaust his administrative remedies with respect to a request for reconsideration of a determination with respect to overpayments. Once debtor receives a Chapter 7 discharge, it will discharge any overpayment claim by the Social Security Administration. The discharge will include any obligation by the debtor to the Social Security Administration for overpayments as of the date the bankruptcy was filed.)
(Summary judgment granted. Automatic stay did not go into effect upon filing of case. § 362(c)(4)(A).)
(Objections to mortgage claim, history of buydown agreement, bankruptcy of both creditor and debtor, facts set out for debtor to use in a submission to credit reporting agencies, and order to counsel to provide name and address of authorized agent that currently holds loan.)
Honorable Mary Grace Diehl (Recall)
Order granting Defendant’s partial motion for summary judgment and denying Plaintiff’s motion for summary judgment. The Court found that Defendant was entitled to judgment as to Plaintiff’s willful violation of the automatic stay claim and avoidance claim. The facts of the complaint involved an unauthorized sale of debtor’s residence. Defendant Deutsche Bank violated the automatic stay under § 362(a)(6) when it applied payoff funds to Debtor’s account and released its security deed. However, § 362(h)(1) was not eligible to recover under this statute because the Trustee demonstrated no injury to the bankruptcy estate and the Trustee did not qualify as an individual entitled to recover under the statute. Additionally, Defendant’s security deed complied with the Georgia recording statutes, and, therefore, the Trustee’s avoidance powers under § 544(a)(3) were inapplicable.
Order granting in part Plaintiff’s Motion for Default Judgment, holding the debtor’s debt to Plaintiff nondischargeable pursuant to 11 U.S.C. § 523(a)(6) when Plaintiff alleged that the debtor sold collateral, which was the subject of a security agreement, without Plaintiff’s authority as the creditor and without paying the proceeds to Plaintiff. The Court denied Plaintiff’s Motion to the extent that it sought to declare the debtor’s debt nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) when Plaintiff did not allege any facts indicating that Defendant had any fraudulent intent or otherwise acted to defraud Plaintiff at the time that the parties entered into their agreement.
Order granting in part Plaintiffs’ Motion for Default Judgment and stripping a second residential mortgage lien pursuant to 11 U.S.C. § 506(a) when Plaintiffs alleged sufficient facts to show that the second mortgage was wholly unsecured. The Court denied Plaintiffs’ Motion to the extent that it sought an award of legal fees, costs and expenses because Plaintiffs failed to identify any legal authority for granting such an award.
Honorable Paul W. Bonapfel
Debtors’ motion to redeem vehicle for $0 denied. Although the Debtors had paid the creditor’s claim in full pursuant to their chapter 13 plan prior to conversion to chapter 7, because they did not pay the contractual interest rate, the Debtors did not pay the “full amount of such claim determined under applicable nonbankruptcy law” and, thus, the creditor’s claim continued to be secured. See 11 USC 348(f)(1)(C).