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U.S. Bankruptcy Court

Aug 30, 2023

Case dismissed with prejudice as sanction

Where the debtor had the benefit of the automatic stay for five years in his previous case but did not pay the mortgage on his property for four of those years, despite his representation to the court in his confirmed plan that he would do so, his second case was dismissed with prejudice for a […]

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Jul 3, 2023

Debtor’s fraud judgment nondischargeable

The Bankruptcy Court for the Eastern District of Virginia has refused a chapter 13 debtor’s request to discharge a debt of more than $165,000 arising from a state court’s judgment for fraud, conversion and breach of fiduciary duties. When the defendant filed bankruptcy after losing in the state court, the plaintiff filed an adversary action […]

Jun 1, 2023

Debtor can’t explain loss of millions of dollars

Where the U.S. Trustee showed there had been an unexplained loss of millions of dollars of assets to meet the debtor’s liabilities, and the debtor failed to provide a satisfactory explanation for the loss of the funds, the trustee prevailed on this claim. Background Bin Hao is an individual residing in Fairfax County. Through Qidian […]

Jun 1, 2023

Petition date determines eligibility for subchapter V

Where the debtors were eligible for proceeding under subchapter V of Chapter 11 at the time they filed their petition, the court could not consider eligibility based on events that occur postpetition (such as the later filing of a bankruptcy case by an affiliate of a debtor). Background On Feb. 7, 2023, Tommy and Anne […]

May 11, 2023

Trustee ordered to disgorge fees

Where a Chapter 7 panel trustee received a share of commissions from a realtor to whom he referred business, and that arrangement was not disclosed to the court, the trustee must disgorge his fees in this case. Background This matter was before the court for a hearing on the court’s order to show cause why […]

Apr 11, 2023

Proofs of claim survive challenge by debtor

Where a debt collection company filed two proofs of claim based upon credit card debt owed by the debtor, the debtor admitted she owed the debt to the credit card company and there was proof the debts were assigned, the debtor’s argument that she had no credit relationship with the assignee was insufficient to overcome […]

Mar 28, 2023

Rural pharmacy denied funds required for survival

Although the debtor is owed more than a million dollars by a pharmacy services administrative organization, which that organization refuses to transfer because of an alleged overpayment, and the debtor may have to go out of business without the funds, which would cause irreparable harm to the surrounding community, the debtor’s motion for injunctive relief […]

Mar 7, 2023

Debtors fail to show bank violated discharge injunction

Where debtors asserted that a bank violated the discharge injunction, but their arguments had already been rejected by courts, misapprehended the law or stated claims that were implausible, the bank was granted judgment on the pleadings. Background This case involves pro se debtors, James Andrew Hegedus and Virginia Ellen Hegedus, who have engaged in litigation […]

Feb 17, 2023

Debtors’ potential claim arose after petition date

Where one of the debtors believes that he might be entitled to compensation under the recently-passed Camp Lejeune Justice Act of 2022, his motion to reopen the bankruptcy in order to disclose the claim was denied. The cause of action did not come into existence until Aug. 10, 2022, the date the statute was passed, […]

Feb 1, 2023

Debt collectors must pay $25K after violating injunction

Where debt collectors sent debtors a payoff letter and offered a discounted payment for the judgment debt after the debtors filed for bankruptcy protection, the debt collectors violated the discharge injunction. They must pay $25,000 the debtors incurred in attorney’s fees remedying the violation. Background Morton Craig Skaggs and Laurie Lynn Skaggs are the bankruptcy […]

Feb 1, 2023

Bankruptcy court abstains from suit against debtor

Where the debtor sold her house, but the mortgage holder received no proceeds, and it then sued the debtor, purchasers and new mortgage holder in circuit court, the bankruptcy court will abstain from the suit. The circuit court can adjudicate the debtor’s affirmative defense of discharge. Background Dee Arnolds filed a Chapter 7 petition with […]

Jan 12, 2023

Liquidating trustee must pay quarterly fees

Where the confirmed plan made the liquidating trustee the party responsible for the quarterly fee payments in the stead of the debtors, directed the liquidating trustee to make the payments and the plan received creditor approval, the liquidating trustee was required to pay the quarterly fees to the US trustee. Background Richard Arrowsmith, in his […]

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