Opinions"Scheduled as contractually due" for purposes of § 707(b)(2)(A)(iii) means due under the contract between the debtor and secured creditor. The determination is to be made as of the date of the Chapter 7 petition, for purposes of the "presumption of abuse" in § 707(b)(2)(A)(i), and debtor's intent not to reaffirm is not relevant, as long as debtor is contractually obligated to make the payments on the date of the petition. For purposes of § 707(b)(3), more than the ability to pay some of the debt in a chapter 13 plan is needed to show an abuse under the "totality of the circumstances" test. In re Art Unlimited, Case No. 02-23992, Neil McKloskey, Trustee v. Galva Foundry Co., et al., Adversary No. 04-2098 Published: In re Art Unlimited, LLC, 356 B.R. 700 (December 2006) -- Judge M.D. McGarity Chapter 7 trustee brought an adversary proceeding to set aside alleged fraudulent transfers. The debtor's principal was found liable for avoided transfer, but bank that structured the complex prepetition sales transaction was not. In re McCormick, 2006 WL 3499226 (December 2006) -- Judge S.V. Kelley Till applies to 910 claims, and interest needs to be paid on such claims. In this case, given the very low risk of default, no additional interest was required to be added to the prime rate. In re Grunert, 353 B.R. 591 (November 2006) -- Judge S.V. Kelley Above-median debtors could take Local Standard expense deduction for vehicle ownership/lease expense, even though they owned their vehicle free and clear of liens. In re Turkowitch, 355 B.R. 120 (November 2006) -- Judge S.V. Kelley Surrender of collateral in complete satisfaction of 910-car creditor's claim is permitted by hanging paragraph of § 1325(a). Case -v- Wells Fargo Bank, NA (In re Case), Johnson -v- US Bank Nat’l Ass’n (In re Johnson), Herrera -v- JPMorgan Chase Bank (In re Herrera), Oven -v- Universal Savings Bank (In re Oven), Newsom -v- Bank of America Corp. (In re Newsom), Jendusa -v- No (October 2006) -- Judge J.E. Shapiro Chapter 13 debtor-mortgagors sued defendant-mortgagees for violating 11 U.S.C. § 1322(e) by wrongfully receiving interest-on-interest on their claims. The debtor-mortgagors sought disgorgement of the wrongfully paid interest-on-interest pursuant to 11 U.S.C. §§ 502(j) and 1322(e), and claimed abuse of process under 11 U.S.C. § 105(a). The court found that plaintiffs had standing to pursue this action on behalf of the Chapter 13 estate pursuant to Bankruptcy Rule 6009. Nonetheless, the court dismissed these actions, finding that the actions were procedurally deficient. The court reasoned that the parties were required to invoke Bankruptcy Rule 3008 and proceed by means of a motion to reconsider and only if then successful seek further relief. *Note- reversed and remanded. Maxwell, Trustee -v- Michigan Fidelity Acceptance Corp. (In re Maestas) (October 2006) -- Judge J.E. Shapiro The trustee successfully avoided the defendant's mortgage and preserved it for the benefit of the estate pursuant to 11 U.S.C. §§ 547 and 551. The trustee then brought a second action to recover a money judgment on the avoided transfer pursuant to 11 U.S.C. § 550. The court found that even though res judicata appeared to bar the second action, the "statutory scheme" exception to res judicata was applicable and allowed the trustee to bring a separate action to recover the value of the avoided transfer under 11 U.S.C. § 550. Consequently, the court found that the second action was properly brought and denied the defendant's motion to dismiss or, in the alternative, for judgment on the pleadings. Case -v- Wells Fargo Bank, NA (In re Case), Johnson -v- US Bank Nat’l Ass’n (In re Johnson), Herrera -v- JPMorgan Chase Bank (In re Herrera), Oven -v- Universal Savings Bank (In re Oven), Newsom -v- Bank of America Corp. (In re Newsom), Jendusa -v- No (October 2006) -- Judge J.E. Shapiro Chapter 13 debtor-mortgagors sued defendant-mortgagees in seven adversary proceedings, which were consolidated, for violating 11 U.S.C. § 1322(e) by wrongfully receiving interest-on-interest on their claims. The debtor-mortgagors sought disgorgement of the wrongfully paid interest-on-interest pursuant to 11 U.S.C. §§ 502(j) and 1322(e), and claimed abuse of process under 11 U.S.C. § 105(a). On remand, the court determined that the adversary proceedings were not moot as to those debtors who received discharges. The debtors conceded that § 105 did not create a private right of action, and the court dismissed that count. The court found that none of the equitable defenses of judicial estoppel, waiver, or laches raised by the defendants warranted dismissal. However, the court held that the confirmed plans proposed by the debtors are entitled to res judicata effect pursuant to § 1327(a). The court also held that § 1322(e) is a discretionary provision which did not render the orders confirming the plans in each of the adversary proceedings nugatory. As a result, the court dismissed all of the adversary proceedings. Aff'd on appeal. In Re Kowalewski 06-20774 (October 2006) -- Judge P. Pepper In In re Balcerowski, the Court held that a debtor must subtract his actual tax expense from his Schedule I income to determine projected disposable income for Chapter 13 purposes. In this matter, the Court declines to dictate to the parties the method they should use to determine the actual tax expense. Debtors must make a good-faith effort, under the circumstances of their particular cases, to determine what their actual tax expenses will be. In Re Balcerowski, 06-21695 (October 2006) -- Judge P. Pepper The appropriate expense for the purpose of determining disposable income under section 1325(b)(1)(B) of BAPCPA is for the debtor to estimate, and subtract from his income, the actual tax he will incur, not the amount he has withheld from his wages. The debtor should calculate this actual tax based on his income at the time he filed his petition, and not solely upon his historical, "current monthly income" income figure. |