When there’s a joint bank account and a bankruptcy filing, good intentions can quickly go sour. The bankruptcy trustee sees a pile of money in the bank to which the debtor has access, even though the account also bears the name of someone not in bankruptcy. If the debtor can get the money, the trustee contends, so can a bankruptcy...

In re Galloway, 2022 WL 1017951 (Bankr. N.D. Ill. April 5, 2022) A Chapter 13 trustee’s final audit and notice of completion of payments is not necessary or a precondition to the court granting a discharge to a debtor who has satisfied the requirements of § 1328. (Judge Thorne) Case Summary Tara Galloway filed a Chapter 13 petition in May...

By John P. Gustafson, United States Bankruptcy Judge, Northern District of Ohio, Western Division (Toledo, OH) Click here for Part 1 Click here for Part 2 Click here for Part 3

The Fourth Circuit Court of Appeals held that a plan proposal to create an asbestos trust through Chapter 11 bankruptcy was “insurance neutral,” and the debtor’s insurer was not a party in interest under Code § 1109(b), which contains a noncomprehensive list of parties in interest to a Chapter 11 case. Whether the insurer was a party in interest determined whether...

Bankruptcy Judge (E.D. Washington) serves up classics with wooden tennis racket collection.

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...

By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of TN (Nashville) The automatic stay does not require a creditor pursuing a prepetition nonbankruptcy court action to dismiss that action once a bankruptcy case is filed; requesting continuances and attending status conferences do not constitute “continuation” of the prepetition action for purposes of the automatic stay....

By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of Tennessee (Nashville) While in personam liability of a junior mortgage on the debtor’s residence is discharged by a Chapter 7, the lien survives and constitutes an allowed unsecured claim in the debtor’s subsequent Chapter 13 case. In re Hopper, 2021 WL 3435445 (Bankr. E.D. N.Y. Aug....