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 held that a debt arising from a divorce decree is non-dischargeable under 11 U.S.C. § 523(a)(15) because the Debtor had the ability to pay before filing his petition and has not incurred any subsequent detrimental changes in finances.
The Court granted the debtor's Motion for Default Judgment, classifying a creditor's claim as a wholly unsecured fourth priority lien, but deferred final judgment as to voiding the lien until the debtor's discharge.
The Court denied the U.S. Trustee's Motion to Dismiss for Substantial Abuse because, looking at the totality of the circumstances, the debtor conducted her finances in a very reasonable manner and she only experienced financial difficulty when she suffered a loss of income and became liable on a co-signed note.
The matter before the Court is the Debtor's Motion to Sell pursuant to 11 U.S.C. § 363(f), in which the Debtor seeks permission to sell certain tracts of real estate free and clear of liens and use the proceeds to pay down the balance on her second deed of trust. The lienholder on the first deed of trust filed an objection. The first lienholder maintains that the effect of the sale would be to deprive it of adequate protection of its interest and to limit its right to avoid confirmation of a plan that impairs its interest secured by the residence of the Debtor. The Debtor asserts that because the first lienholder is oversecured, it has no grounds to object to the sale.
Section 363(f) permits the sale of property free and clear of all liens against it in only five situations, none of which are applicable here. Therefore, the sale of the property free and clear of liens under Section 363(f) is impermissible in this case. Further, the Court held that the Debtor could not modify the first lienholder's rights by releasing part of its collateral over its objection and paying the sale proceeds to a junior lien creditor.
The Debtor seeks to avoid a lien as a preferential transfer under 11 U.S.C. § 547 and § 522(f)(1) because it was recorded within 90 days prior to the petition date. The Court found that a judicial lien qualifies as a preference but the Debtor can only avoid the lien to the extent that it impairs the Debtor's exemption in the property under Section 522(f)(1). A debtor may bring an action to avoid a transfer of property of the debtor, to the extent that the property is properly claimed exempt by the debtor, if (1) the transfer was involuntary; (2) the debtor did not conceal the property; (3) the trustee could avoid the transfer, but does not attempt to do so; and (4) the debtor has exempted the transferred property. See 11 U.S.C. § 522(g)(1) and (h). Applying Section 522(f)(2), the Court held that the judicial lien may only be partially avoided.
The Court granted the United States Trustee’s motion to dismiss this case for substantial abuse because the debtor could pay some small amount in a Chapter 13 plan, experienced no financial trauma, maintained excessive vehicle payments, and filed inaccurate schedules; nevertheless, the Court granted the debtor leave to voluntarily convert to a case under Chapter 13.
Under section 362(b)(2)(B), the automatic stay does not apply to the collection of alimony, maintenance or support from property that is not property of the estate. Looking to federal law, the Court held that a portion of the award of attorney's fees to debtor's former spouse was in the nature of support based on the disparity of the parties' monthly incomes and its collection from the debtor's 401(k) plan was not affected by the automatic stay. The remainder of the award was in the nature of a sanction (and not support); former spouse did not demonstrate good cause to modify automatic stay to pursue collection of such award.
The Court denied the U.S. Trustee's request for entry of default because the affidavit in support was procedurally deficient; it was not signed and contained imprecise details regarding service.
The Court declined granting a "hardship discharge" and dismissed the case when the debtor died within a few months of confirming a Chapter 13 plan because of the debtor's lack of dependents and the plan's lack of distribution to creditors.
The Court denied a creditor's Petition for Approval of an Administrative Expense because the creditor filed a proof of secured claim that in no way indicated an intention to seek administrative expenses treatment on the Court Official Form 10 which states on its face that it is not for administrative expenses, the creditor recognized the claim of another creditor on the property at issue, and the creditor was too late.