By Helen M. Morris, Chapter 13 Trustee for the Northern and Southern Districts of West Virginia
I love a good story—like the one debtor’s counsel shared with me a couple of months ago.
A good-old-boy attorney, he called the day before the hearing on my motion to dismiss for failure to maintain plan payments. He was going to file a motion for moratorium for the next 6 months because the debtor, a disabled Iraqi veteran who is taking care of her elderly parents, is going for training which will enable her to get a better paying job and, of course, she will be able to complete her plan and save her house. But while in training, she won’t have any money for plan payments.
Now, it doesn’t take a crystal ball to see how this is going to play in court: Snidely Whiplash a/k/a Chapter 13 Trustee vs. Disabled American Vet with aged ill parents all of whom will be out on the street if the case is dismissed.
So, being an astute trustee, I suggested that since he was going to do the motion for moratorium anyway, he should include the months listed in my motion so that when the moratorium is over, the debtor is not faced with an immediate delinquency again since the moratorium he was going to seek would only cover the upcoming months. This, I thought, was a brilliant idea. I would look like I was being so cooperative while, at the same time, getting this case off my delinquency list for the 6 months of the moratorium and the following 2 months when she didn’t resume her payments. It was a win-win—at least for 8 months.
Debtor’s counsel agreed to my suggestion. Fortunately, I didn’t waste any time on a happy dance. The next day in court when the case was called, the debtor’s attorney proudly announced he had filed a motion for a moratorium—which, of course, did not include the two—now three—months in my motion to dismiss.
Good help is hard to find, he muttered as we were leaving the courtroom.
Find brick wall. Bang head against it.
Two attorneys, who practice in different divisions, came up with an ingenuous twist on the motion for moratorium in response to my motion to dismiss. The moratorium motion includes the months in the dismissal motion, but sets the “resumption” of payments at an amount less than the current plan payments. I don’t know if this is another example of debtor math (see previous article) or if they think I’m stupid. My self-esteem requires that I elect the former. In any event, both attorneys wondered why Hard Hearted Hannah wouldn’t sign the proposed orders they sent me.
Find brick wall. Bang head against it.
But the response to a motion to dismiss that takes the cake is an oral presentation at the continued hearing on my motion. I don’t know if counsel couldn’t bring himself to put this in writing, was too lazy to file a response, or didn’t do anything to prepare for the hearing until talking to the client before the case was called. In this landmark case, the employer has been transmitting less than the plan payment each month. After ascertaining that the shortage wasn’t due to the debtor being paid bi-weekly and the plan based on monthly payments, I filed a motion to dismiss.
By the time of the continued hearing, the default had increased. I advised the Court at the hearing that according to my calculations, the plan would be short about $6,750.00 each year at the present rate of payments.
Debtor’s counsel professed no idea how that could occur. He told the court that he had submitted a new wage withholding order reducing the plan payments to the amount he calculated the trustee needed to pay claims. (It probably goes without saying that no motion to modify the confirmed plan was filed.)
In response to the Judge’s inquiry, I listed the claims I was paying and then the ones I couldn’t pay because of the shortfall.
Debtor’s counsel immediately countered that the trustee didn’t need to pay the mortgage arrearage. Why? Because the debtor got a loan modification and the arrearage was taken out. The judge inquired if debtor’s counsel had sent the trustee a copy of the documentation. No, he didn’t have any of the paperwork.
So, the Judge asked very patiently, how do you know that the debtor has a loan modification on the mortgage? Because, counsel responded even more patiently, since the plan was confirmed, the monthly statements the debtor receives doesn’t include the arrearage.
Find brick wall. Bang head against it.
Note: For those seeking to utilize this technique, you may need to secure more than one brick wall. Some debtors’ attorneys have very hard heads.
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Helen M. Morris has been the Chapter 13 trustee for the Northern and Southern Districts of West Virginia since October 1, 1996. Prior to her appointment, she was in private practice in Huntington, WV, where she served as a Chapter 7 panel trustee in addition to representing both debtors and creditors in bankruptcy matters; but not in the same case. She has a Bachelor’s degree from Marshall University in Huntington, WV, and her law degree from Vanderbilt University School of Law in Nashville, TN.
