The summaries on this website are summaries of the opinions issued by the judges of the Bankruptcy Court for the Western District of Virginia from October 2004 to date. The opinions may be searched by year, judge, category and chapter. For a more detailed search, enter a keyword in the search box above. This opinion bank, however, is not an exhaustive list of opinions issued by the judges of the Western District. These summaries are not intended to replace other research methods, but may be used as a starting point for your research. These summaries do not contain information as to whether an opinion has been published, appealed or the disposition of any such appeal, or otherwise overruled or affected by subsequent case law or statute. These summaries have been prepared for the convenience of the researcher and in no way constitute an interpretation by the Court of the opinion summarized. Please rely on the opinion not the summary. Please contact Judge Connelly's chambers or Judge Black's chambers regarding any questions or errors.
The Court denied a motion for summary judgment in favor of creditors that purchased real property of the estate, where the creditors argued that purchasing the real property extinguished liability to the estate for unpaid rent.
The Plaintiff filed a Complaint to determine that its claim was excepted from discharge under 11 U.S.C. § 523(a)(6). Pursuant to Section 523(a)(6), debts for willful and malicious injury by the debtor to the property or person of another are nondischargeable. Under Kawaauhau v. Geiger, 523 U.S. 57 (1998), in order to satisfy the requirements of Section 523(a)(6), a plaintiff must plead and prove that the debtor engaged in acts that caused an injury to the plaintiff, and (a) that the debtor acted willfully, with actual intent, objective or subjective, to cause injury to the plaintiff, where the harm was not merely the result of negligent or reckless acts of the debtor, and (b) that the debtor acted with malice. Under this standard, the Plaintiff in this case failed to prove by a preponderance of the evidence that the debtor acted with actual objective or subjective intent to cause injury to the Plaintiff when the debtor liquidated the collateral and spent half of the cash receipts from the sale on business operations.
The court denied the Debtor's requested waiver of the requirement to obtain credit counseling prior to filing based on exigent circumstances and dismissed the case without prejudice at the Debtor's request.
The court denied the Debtors' motion to reopen their Chapter 7 bankruptcy case and file an adversary proceeding to avoid judgment liens recorded against their real property within ninety days of the original filing, because the Debtors did not claim that the liens impaired their exempt property. The court also highlighted its previous holding that such a motion requires payment of the standard reopening fee.
The court denied the joint-filing Debtors' application for waiver of the Chapter 7 filing fee after determining that their combined monthly income did not exceed 150% of the poverty line for family of four, because the Debtors received a tax return that would have enabled them to pay the fee and they could afford to pay in installments. Despite the fact that the Debtors were separated and maintained separate households, child support paid to a joint debtor should not be listed as a monthly expense of the payor spouse or as monthly income of the payee spouse.
The court declined to enter a proposed consent order that provided an undersecured creditor with an unsecured claim for post-petition attorneys' fees and costs because 11 U.S.C. § 506 only authorizes contractually authorized attorneys' fees for fully secured claims.
The court reconverted the case to one under Chapter 7 upon a creditor's motion to dismiss when the court determined that proposed Chapter 13 plan was not feasible, because the court found that conversion, rather than dismissal, better served the interest of all creditors.
The court held that the Debtor's potential recovery from a loss of consortium claim pending in Kentucky state court was properly claimed exempt as a cause of action for personal injury.
The Court declared a wholly unsecured second priority lien on the Chapter 13 Debtor's real property an unsecured claim for the pendency of the case, but declined to declare the lien void until the Debtor received a discharge.
The Debtor filed a Complaint against the U.S. Department of Housing and Urban Development ("HUD") to turnover his 2003 federal income tax refund which HUD set off against the debtor's pre-petition debt owed to HUD for a foreclosed home pursuant to 26 U.S.C. § 6402 (Federal Intercept Statute). The setoff occurred one day after the debtor filed his bankruptcy petition. In addition, the debtor sought a determination that HUD violated the automatic stay of 11 U.S.C. § 362. HUD moved for retroactive, or nunc pro tunc, relief from stay by annulment of the stay. The Bankruptcy Code preserves the right to setoff that exists under nonbankruptcy law, and Section 6402 allows the I.R.S. to offset a tax refund against any debt which the taxpayer may owe to a federal agency. See 26 U.S.C. § 6402(d). Nevertheless, regardless of any established rights to conduct a setoff, postpetition acts to conduct a setoff are prohibited by the automatic stay under Section 362. Further, prepetition creditors generally may not execute a postpetition setoff on property which the debtor has exempted. The Court found that annulment of the automatic stay would be contrary to the intent of Congress and the Commonwealth of Virginia. Accordingly, the Court concluded that the government's post-petition setoff of the debtor's tax refund to prepetition debt was a violation of the automatic stay, and therefore ordered that HUD turn the debtor's tax refunds over to the trustee to administer because it is property of the estate. Nevertheless, the Court found that HUD's actions were not willful, and therefore did not issue sanctions against HUD for violating the automatic stay.