In re Vetter, No. 11-03988-dd, 2012 WL 1597378, at *1–*2 (Bankr. D.S.C. May 7, 2012) (Duncan)

At death of debtor, counsel should have given notice to court and sought designation of representative before converting case to Chapter 7. “Fed. R. Bankr.P. 1016 provides that when a chapter 13 debtor dies, the ‘case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred.’ Rule 1016 further provides that in a chapter 7 context, the death of a debtor ‘shall not abate a liquidation case’ and that the case, so far as possible, should continue as if the death had not occurred. Although the debtor died during the chapter 13 portion of the case following confirmation of the debtor’s plan, the debtor’s counsel made no request to the Court for the debtor’s personal probate estate representative to assume debtor’s duties under the Bankruptcy Code. It further appears that creditors, the chapter 13 trustee, and other parties in interest were not provided notice of the debtor’s death. . . . Rules 1016 and 1017(f) do not permit the debtor’s chapter 13 case to be converted to one under chapter 7 under the facts of this case. . . . The Court recognizes that a chapter 7 or chapter 13 case could be at the stage where notice of the debtor’s death and recognition of the authority of a personal representative would be less important than in this case. However, in most cases pleadings, amended schedules, reports, or an amended plan may be required. Parties in interest may well have service of process questions. Counsel for a deceased debtor needs direction concerning the authority of another party to act for the debtor. Finally, creditors and parties in interest may need to reevaluate their positions in a case based upon a debtor’s death such as deciding whether to prosecute a motion for stay relief or a discharge or dischargeability action or a motion to dismiss or to convert a case to another chapter. For these reasons, upon the death of a debtor, counsel for a deceased debtor should ordinarily promptly notify the Court of the debtor’s death and file a motion for designation of an appropriate person to act on the debtor’s behalf. The failure of the debtor’s counsel to take these actions in this case and his failure to respond to the motion to dismiss constitute cause for dismissal of this case. § 707(a).”

No Author Biography has been linked to this Article.

Related Articles

June 30, 2019
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) Over the past twenty years, the judicial estoppel doctrine has had a significant impact on people who file bankruptcy. Judicial estoppel has grown to be a significant issue within the consumer bankruptcy system. The Commission was asked to address it. Judicial estoppel is a doctrine created to protect the...
Members
August 25, 2019
On 8/22/19 the IRSe and its Security Summit partners warned taxpayers and tax professionals about a new IRS impersonation scam campaign spreading nationally on email. Remember: the IRS does not send unsolicited emails and never emails taxpayers about the status of refunds. The IRS detected this new scam as taxpayers began notifying phis[email protected] about unsolicited emails from IRS imposters. The...
Copy of Hildebrand-2016
September 25, 2022
Where a debtor and debtor’s counsel initiated a Chapter 13 petition in an effort to halt a foreclosure against property held by the debtor’s LLC, and where the debtor took no steps to correct the filing, sanctions would be imposed against debtor’s counsel. (Grabill) In re Scaccia, 2022 WL 1216284 (Bankr. E.D. La. April 25, 2022) Case Summary Scaccia owned...
Members
Copy of Hildebrand-2016
Chapter 13 plan cannot be modified to treat a priority claim as general unsecured after the time for reconsideration of the order has passed. (Easterbrook) Matter of Terrell, 39 F.4th 888 (7th Cir. July 12, 2022) Case Summary The Terrells’ Chapter 13 plan proposed a classification to pay the State of Wisconsin in full as a priority claim because, they...
Members
May 3, 2020
By Hon. Brian Lynch, United States Bankruptcy Judge, Western District of Washington, Tacoma Division When the Supreme Court issued United Student Aid Funds, Inc. v. Espinosa1 on March 23, 2010, commentators were perplexed.2 On the one hand, the Court upheld the 9th Circuit’s ruling allowing a hardship discharge of student loans in a chapter 13 plan. The Court held that...
Members
February 14, 2021
By Jan Sensenich, Chapter 13 Standing Trustee for the District of Vermont I think it was in junior high school when I first started wearing glasses. I remember not liking the idea of having to wear glasses. I thought I could see just fine. As far as I knew, I was seeing what I needed to see. But I also...
June 23, 2019
Nearly 2 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2019 as the IRS continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year. “We urge taxpayers with expiring ITINs to take action and renew the number as soon as possible. Renewing before the end of the...
February 24, 2019
By Cathy Moran, Esq. (Redwood City, CA) We all get sucked in, at some time, to try and rescue a Chapter 13 bankruptcy case gone bad. Make sure that you don’t let a bad situation get worse. Get your arms around §109(g). When only a do-over will do, don’t wait around. No Payments for Months The debtor came to me...
Members
rebeccaherr
April 23, 2023
In recent years, a handful of cases have discussed the issue of what happens to the trustee’s percentage fee, collected from debtor plan payments, upon the dismissal or conversion of a case prior to confirmation. This is an emerging area of law, with decisions on both sides.  However, with this new issue, there appears to be at least some confusion...
Members
March 24, 2019
By Lawrence R. Ahern III, Brown & Ahern (Nashville, TN) PART IV: What's an Attorney to Do? Considerations for Counsel on all Sides of the Arbitration Question Click here for Part I Click here for Part II
Members