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Fourth Annual Frank W. Koger Bankruptcy Symposium

Friday, May 13, 2011

Program Materials

Professor Laurie L. Levenson

The Ten Trickiest Ethical Issues of Our Time

Laurie L. Levenson is a professor of law, William M. Rains fellow and the David W. Burcham chair in Ethical Advocacy at Loyola Law School. After graduation, she served as law clerk to the Hon. James Hunter III of the U.S. Court of Appeals for the 3rd Circuit. In 1981, she was appointed assistant U.S. Attorney, Criminal Section, in Los Angeles, where she was a trial and appellate lawyer for eight years, and attained the position of senior trial attorney and assistant division chief.


Hon. Eugene R. Wedoff

Means Testing after Lanning and Ransom & Other Fun for Consumer Practitioners

U.S. Bankruptcy Judge Eugene R. Wedoff has served in the Northern District of Illinois in Chicago for 17 years, and he also served as chief bankruptcy judge from 2002 through 2007. Judge Wedoff is a frequent lecturer, having presented papers on a variety of consumer and business issues. Judge Wedoff drafted the model Chapter 13 plan currently used in the Northern District of Illinois.


Question & Answer Dialogue

Under what circumstances is a non-debtor stay or post-confirmation non-debtor injunction appropriate in a Ch. 11 case?

11 U.S.C. § 105; Metromedia Fiber Network, Inc., 416 F.3d 136 (2d Cir. 2005) (non-debtor third party injunction and non-debtor release are properly included in a Chapter 11 plan only in rare cases); Continentalafa Dispensing Co., 403 B.R. 653 (Bankr. E. D. Mo. 2009) (extending stay to owners of debtor).

Chapter 7 cases, did the 2005 amendments close the "ride through" provision re. Debtor's intentions?

11 U.S.C. § 521(a)(2) (statement of intent and performance of intent, “if applicable” within 30 days); Ransom v. FIA Card Services, N.A., 131 S.Ct. 716 (2011) (utilizing ordinary, i.e., dictionary, definition of “applicable” in context of § 707(b)(2)(A)); In re Riggs, 2006 WL 2990218 (Bankr. W.D. Mo. Oct. 12, 2006) (holding that, in Missouri, ipso facto clauses in security agreements are not enforceable under Missouri law against a debtor who has attempted unsuccessfully to reaffirm the debt); In re Schmidt, 397 B.R. 481 (Bankr. W.D. Mo. 2008) (suggesting that, by adding § 362(h) and 521(a)(6) to BAPCPA, Congress may have eliminated the fourth option, but only as to personal property).

When, if ever, are I & J to be considered in determining the chapter 13 plan payment? Would grown family members be considered "household members" if she has returned (age 25) to attend nursing school, she has grants, but parents are counting her and her 2 minor children as members of household.

In re Townsend, 344 B.R. 915 (Bankr. W.D. Mo. 2006) (“head of family” can apply to same sex couple and their children); In re Swigart, 339 B.R. 724 (Bankr. W.D. Mo. 2006) (summarizing Missouri cases, holding that “family” can mean a lot of things – brothers, step-children, disabled sibling, etc.); U.S. v. Webster, 2008 WL 5191460 (W.D. Mo. 2008) (holding that, to constitute a “family” within the meaning of the homestead laws there must be two or more persons residing together under one head or manager, with the legal or moral obligation on the part of the person who occupies the position as head of the house or family to support one or more of the other members, and there must be a state of dependency, at least partial, on the part of the one receiving such support; the central thought underlying the family relation is that of dependence). Hamilton v. Lanning, 130 S.Ct. 2464 (2010) (holding that, when a bankruptcy court calculates a Chapter 13 debtor’s projected disposable income, the court may account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation).

To the Judges & the Chapter 13 Trustee: (1) Are work comp lump sum settlements or social security disability lump sum settlements exempt if received during the plan period in a Chapter 13 case? (2) If not exempt, are there any circumstances under which part or all of the funds can be retained by the Debtor?

Carpenter v. Ries (In re Carpenter), 408 B.R. 244 (B.A.P. 8th Cir. 2009) (holding that, in a Chapter 7 case, based on the broad language of 42 U.S.C. § 407, social security benefits, whether paid or payable, are not property of a bankruptcy estate to begin with, if they are still held by the debtor.”)

Please explain the hardship discharge for student loans.

In re Long, 322 F.3d 549 (8th Cir. 2003) (applying a totality of the circumstances test, which includes (1) past, present and reasonably reliable future financial resources; (2) debtor and dependents’ reasonable necessary living expenses; and (3) any other relevant facts and circumstances); In re Jesperson, 571 F.3d 775 (8th Cir. 2009) (holding that the availability of an ICRP or EBR is an important factor in the analysis); In re Walker, 427 B.R. 471 (B.A.P. 8th Cir. 2010) (mother of five children, two of which were autistic; court had authority to adjudicate dischargeability after entry of discharge order; not an improper collateral attack on general discharge order; court may consider circumstances existing at time of trial - not limited to time of discharge; court did not err in finding repaying loans would impose undue hardship, even though husband bought luxury vehicle and built screen porch); In re Sederlund,440 B.R. 168 (B.A.P. 8th Cir. 2010) (42-year-old woman was voluntarily underemployed; boyfriend’s contributions to household could be considered; debt not dischargeable).

Can a property settlement out of a divorce case be discharged in a Chapter 13 case?

Section 523(a)(15) is not listed among the debts which are nondischargeable in a Chapter 13 under § 1328(a)(2).

If an automobile has no loan against what it is the appropriate value to schedule "liquidation," actual market value or NADA used retail value?

In re Coleman, 373 B.R. 907, 913 (Bkrtcy.W.D.Mo.,2007) (“[T]o summarize, with regard to vehicles, valuation is determined by starting with the NADA ‘Retail Value,’ less the amount it would cost to put the vehicle into “clean” condition as defined by NADA, less 5%. If this formula is not appropriate under the circumstances of a particular case, the parties are free to submit further evidence of actual value.”) In re Cheatham, 2007 WL 2428046 (Bankr. W.D. Mo. June 19, 2007) (“A Clean Retail vehicle will be clean and without glaring defects. Tires and glass should be in good condition. The paint should match and have a good finish. The interior should have wear in relation to the age of the vehicle. Carpet and seat upholstery should be clean, and all power options should work. The mileage should be within the acceptable range for the model year.”

I would like a discussion regarding issues involving the non filing spouse.

In re Boatright, 414 B.R. 526 (Bankr. W.D. Mo. 2009) (holding that, in performing “means test” calculation, debtor-wife had to include earnings of her non-debtor-spouse on income side of equation only to extent that he contributed such earnings, on regular basis, for payment of household expenses, and (2) spouses' incomes would not be pooled, for purposes of conducting a “totality of the circumstances” analysis, but court would examine actual amounts that husband regularly contributed for household expenses of debtor and her dependents on case-by-case basis).