An unsecured junior lien on the debtors' residential real estate may be avoided after the debtors complete Chapter 13 plan payments. The case law in the Eighth Circuit permits wholly unsecured liens to be stripped off.

The court denied the debtor’s motion for sanctions for violation of the automatic stay by a creditor who sent billing statements for medical expenses incurred by the debtor’s late wife. While the debtor argued that the bills were an attempt to collect the debt from him because a husband is liable for his wife’s medical expenses under Nebraska law, the court found no evidence either that the creditor knew the husband had filed bankruptcy or was in fact attempting to collect from the husband because the bills were addressed only to the non-debtor wife. The court held there was no willful violation of the automatic stay and sanctions were not warranted.

After a trial on the dischargeability of the debtor’s student loan indebtedness, the court ruled that the debt was excepted from discharge. The evidence indicated the debtor’s income is likely to increase in the foreseeable future, as a result of higher salaries as well as a reduction in expenses. Several of the monthly expenses listed by the debtor are relatively short-term obligations, such as repayment of some small loans and support for a child in college In addition, the debtor’s income tax withholding is higher than necessary and changing it would free up some cash as well. The debtor is also eligible for the income-based repayment plan and, as a public employee, the debtor is eligible for a public service loan forgiveness program, meaning she could complete payments in 10 years instead of 25, thereby averting the hardship of paying on student loans well past retirement age, and she may not be subject to an oppressive tax obligation for the forgiveness of the loan balance.

A party moved to recuse the bankruptcy judge assigned to the case from handling the matter on remand, asserting that the judge would be biased due to an inability to set aside impressions formed from the judge’s review of and familiarity with the trial testimony, evidence, and earlier rulings in the case. The court denied the motion, explaining that the scope of the disqualification statute does not  extend to knowledge gleaned and opinions formed in the course of judicial proceedings. Because the movant did not show the court’s previous decision was based on extrajudicial information, nor did the movant demonstrate the existence of “deep-seated favoritism or antagonism that would make fair judgment impossible,” recusal was unwarranted.