From the Editor – Attorneys and Fees • NACTT Academy

From the Editor – Attorneys and Fees

By The Honorable William Houston Brown (Retired)

Debtor did not require court approval of special counsel. Under §§ 1303 and 1306(b), the Chapter 13 debtor had possession of state-law cause of action against a creditor for wrongful repossession. The debtor and the Chapter 13 trustee have concurrent authority over estate property, subject to § 363’s exclusive authority to the debtor to use, sell or lease property. A debtor is not a “trustee” for purposes of § 327, and the debtor was not required to seek court approval of employment of special counsel; however, such counsel must . . .

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The no man's land between the mortgage due date and late payment is a persistent trouble spot for Chapter 13 practitioners. Are there arrears when the case is filed during the grace period and the payment made before it was late? In Borre, Judge Ronald Sargis of ED CA said no. He held that the payment was not in default...

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By Beverly M. Burden, Standing Chapter 13 Trustee (Lexington, KY) An unscheduled creditor without notice of the bankruptcy case was denied an extension of time to file a proof of claim pursuant to Bankruptcy Rule 3002(c)(6)(A) in a recent opinion from the Eastern District of Kentucky. In the case of In re Fryman,1 the debtor did not include creditor Kentucky...

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M. Jonathan Hayes

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Bankruptcy Court in Texas awards sanctions of $825,940.55 for bad faith filing and prosecution of a proof of claim. (Yes it’s an 11 but still, $825k!)

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ABI Commission on Consumer Bankruptcy – Collateral Repossessed Pre-Petition

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By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) One of the most difficult situations faced by a debtor and debtors’ counsel is the repossession of important collateral securing a debt owed to a creditor. These items, such as automobiles, furniture, boats, and mowers which have been pledged to a creditor are important – often critical – to...

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Henry E. Hildebrand, III

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Where a Chapter 7 debtor fails to disclose the location of his Mercedes which he intended to surrender, fails to produce documents relating to the ownership of his property, and invokes his Fifth Amendment rights against self-incrimination, the Court appropriately denied the debtor a discharge. (Preston) In re Appleby, 2021 WL 5121854 (Bankr. S.D. Ohio, Nov. 3, 2021) Case Summary...

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The Effect of “Success” (or the Lack of It) on Attorneys’ Fees – Part 1: Judicial and Legislative Background

Lawrence R. Ahern, III

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Introduction In In re Village Apothecary, Inc.,1 the Sixth Circuit last month reduced an attorney's fees by half, where the professional's services were not "successful." The results obtained (or, actually, the lack of results) justified cutting the fees of attorneys for a Chapter 7 trustee by 50%. Why It Matters to Chapter 13 People This analysis of the implications of...

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From the Editor – Debtor’s Attorney

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By The Honorable William Houston Brown (Retired) No attorney fees for Chapter 7 work in converted case. In a case that began as Chapter 7 and converted to Chapter 13, the debtor’s attorney sought fees for work in the Chapter 7 phase under § 330(a)(4)(B) rather than § 330(a)(1). The Court found the better interpretation of § 330(a)(4)(B)’s language “in...

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How To Manage Incompetent, Unprepared, and Negligent Bankruptcy Counsel

The NACTT Emeritus Trustees

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Previously the Emeritus Trustees (“ETC”) were asked to comment on “How to Manage Unprofessional and Discourteous Attorneys”. We now turn to ETC to share their collective wisdom when addressing the issues raised by incompetent, unprepared, and negligent bankruptcy counsel. Chapter 13 Trustees are required to administer cases in accordance with the duties set forth in 11 U.S.C. Sec. 1302 and...

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Critical Case Comment– Absolute Right to Dismiss But Not the End of the Story

Henry E. Hildebrand, III

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Although a Chapter 13 debtor has the absolute right to voluntarily dismiss her Chapter 13 case, even after a motion to convert is filed, the Court retains the rights to impose restrictions on the dismissal. (Waites) In re Brittany Frances Minogue, 2021 WL 4453589 (Bankr. D. S.C. September 29, 2021) Summary Brittany Minogue filed a voluntary petition under Chapter 13...

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