In re Renz, No. 11-73471-ast, 2012 WL 3200874, at *3–*5 (Bankr. E.D.N.Y. Aug. 1, 2012) (Trust)

Neither Bankruptcy Rule 3004 nor Rule 3006 permits Chapter 13 debtor to withdraw proof of claim filed on behalf of wholly unsecured junior mortgage creditor when that proof of claim formed basis for adversary proceeding that voided lien. Debtors were ineligible for discharge under § 1328(f). Before the bar date for nongovernmental claims, debtors filed proof of claim on behalf of wholly unsecured junior mortgage holder. Debtors then filed an adversary proceeding in which they succeeded at declaring the junior mortgage wholly unsecured. The judgment also recited that the junior lienholder’s claim was a wholly unsecured claim and that the lien would be declared null and void upon completion of the Chapter 13 plan. Counsel then filed a letter purporting to withdraw the claim the debtors filed on behalf of the junior lienholder. Counsel also filed a plan that provided 100% distribution only to unsecured creditors who timely filed proofs of claim—not including the avoided junior lienholder. “[E]ven if the Chase Claim had been properly filed under Rule 3004, Rule 3006 provides the only express mechanism for withdrawal of such a claim . . . . Rule 3006 does not specifically reference debtor- or trustee-filed claims . . . . [W]hile Rules 3004 and 3006 would appear to permit Chase to withdraw the claim filed by Debtors on its behalf without court approval before an objection or adversary proceeding is filed, the plain language of Bankruptcy Rules 3004 and 3006 does not explicitly permit Debtors to withdraw the Chase Claim, particularly in light of the fact that a complaint was filed by Debtors against Chase in the Adversary relating to the Chase Claim. . . . Debtors clearly filed the Chase Claim so that they could initiate the Adversary for the express purpose of avoiding the Chase Mortgage and reclassifying the Chase Claim as unsecured. Now that the Judgment has been entered declaring the Chase Mortgage to be wholly unsecured, Debtors are seeking to withdraw the very claim that formed the basis for such a declaration . . . . [E]ven if the Chase Claim was properly filed under Rule 3004, this Court finds no cognizable basis for Debtors to withdraw the Chase Claim.”

No Author Biography has been linked to this Article.

Related Articles

Copy of Hildebrand-2016
June 12, 2022
A new day is coming to high debt borrowers seeking to file Chapter 13 but confounded by the debt limits imposed by 11 U.S.C. § 109(e). Although debt limits have been increasing since the effective date of the Code in 1979, consumer debts have been increasing at a far more rapid rate. Starting in 2009, when the housing crisis first...
Members
rummler
May 21, 2023
(The DuPage County Bar Association grants permission to reprint all or part of this article, Chapter 13 Saves the World! by Arthur Rummler, Volume 29, Issue 9, May 2017 edition of the DCBA Brief. Copyright 2017, DCBA Brief, All Rights Reserved.) We are pleased to reprint an article referred to recently by Director Twomey of the Executive Office for United...
November 7, 2021
By Lawrence R. Ahern III, Brown & Ahern (Nashville, TN) Introduction This year's changes in the Rules of Bankruptcy Procedure are summarized below. They will be followed, in Part 2, by a digest of selected judicial decisions in the past year of interest for their procedural implications. December 1, 2021, Amendments to Bankruptcy Rules 2005, 3007, 7007.1 and 9036 On...
Members
April 11, 2021
By Kara K. Gendron, Esquire, Mott & Gendron Law (Harrisburg, PA) If a Chapter 13 Debtor has adopted a child who is eligible for assistance under Title IV-E of the Social Security Act, should those funds which were received in the six months prior to filing the petition be included in the Official Form 122C–1 Chapter 13 Statement of Current...
Members
M Joseph Photo 2-1-22
August 28, 2022
An attorney meets with a potential client about a recent auto accident personal injury claim. The client suffered severe injuries and may be entitled to a large award. The client fails to mention that he is a debtor in an active bankruptcy. The client also has failed to advise his bankruptcy attorney about the personal injury claim. The debtor/client does...
August 2, 2020
By The Honorable William Houston Brown (Retired) Chapter 13 debtor had absolute right to dismiss. Facing a contested confirmation hearing, the debtor moved to dismiss the case, and his estranged spouse objected. Concluding that § 1307(b) provides an absolute right to dismiss a case that had not been previously converted, the court posed questions about whether there should be limits...
Members
January 24, 2021
By Cathy Moran, Esq. (Redwood City, CA) Bankruptcy debtors with delinquent utility bills got a measure of protection from interruption in their service under an amendment to the Bankruptcy Code in the omnibus spending bill enacted December 27,2020. Individual debtors cannot have their utilities disconnected as long as they make some payment for service provided promptly after the commencement of...
Members
August 9, 2020
By The Honorable William Houston Brown (Retired) Separate classification and preferential treatment of student loan debt. The Chapter 13 trustee and debtors’ attorney attempted to change the traditional approach in the District, seeking approval of a permissible fair discrimination in favor of student loan debt in plans so long as the preferential treatment and discrimination was no more than 20%....
Members
October 3, 2021
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) Administrative fees and claims existing when Chapter 13 plan was confirmed would reduce the amounts received by unsecured creditors in a Chapter 7 under the “best interests of creditors test;” unsecured creditors, expected to receive payments over three years, must be paid the “present value” of that stream of...
Members
June 2, 2019
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of Tennessee If a Chapter 13 debtor does not list a creditor on the creditor matrix when filing the petition and makes no effort to provide supplemental notice to the creditor, the provisions of Rule 3002 allow the extension of time for the creditor to file a...
Members

Looking to Become a Member?

ConsiderChapter13.org offers a forum to advance continuing education of consumer bankruptcy via access to insightful articles, informative webinars, and the latest industry news. Join now to benefit from expert resources and stay informed.

Webinars

These informative sessions are led by industry experts and cover a range of consumer bankruptcy topics.

Member Articles

Written by industry experts, these articles provide in-depth analysis and practical guidance on consumer bankruptcy topics.

Industry News

The Academy is the go-to source for the latest news and analysis in the Chapter 13 bankruptcy industry.

To get started, please let us know which of these best fits your current position: