The debtor in this case is a feedlot set up as an LLC. The bankruptcy trustee filed a preference avoidance action against one of the LLC's members to recover payments made to him when his cattle were sold. This court initially granted summary judgment to the trustee, but on appeal the district court remanded the matter for the court to focus on the issue of whether the funds transferred were actually property of the debtor and to specifically consider the issues of bailment and constructive trust. After a trial, the bankruptcy court found that the proceeds transferred to the defendant were not held in bailment and were indeed property of the debtor. The defendant in his membership capacity had participated in granting the debtor's lender a security interest in the debtor's deposit accounts, which included the account into which the proceeds of his cattle sales were deposited and paid out to him, so his consent removed the bailment protection he might otherwise have had. The defendant did not establish an "ordinary course of business" defense, so judgment was entered in the trustee's favor.
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An unsecured junior lien on the debtor's residential real estate may be avoided after the debtor completes Chapter 13 plan payments. The case law in the Eighth Circuit permits wholly unsecured liens to be stripped off.
After trial, the court granted the debtor's request to discharge her student loans. She has a stable job, although not in her field of study, but has been unable to find a better-paying job in the Lincoln area and is unlikely to earn significantly more in the future. Her monthly expenses are modest and reasonable. The stress of financial problems, including repayment of these student loans, has had an impact on the debtor's emotional health and caused difficulties in her personal relationships. The totality of the circumstances indicates that repayment of the student loans would be an undue hardship for the debtor.
After trial, the court granted the debtor's request to discharge her student loans. She has a stable job, although not in her field of study, but has been unable to find a better-paying job in the Lincoln area and is unlikely to earn significantly more in the future. Her monthly expenses are modest and reasonable. The stress of financial problems, including repayment of these student loans, has had an impact on the debtor's emotional health and caused difficulties in her personal relationships. The totality of the circumstances indicates that repayment of the student loans would be an undue hardship for the debtor.
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.
An unsecured junior lien on the debtor's residential real estate may be avoided after the debtor completes 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.
On remand, with no party requesting the court to recall witnesses for further testimony, the bankruptcy court reviewed the transcript and recordings of the original trial and concluded that the funds at issue were property of the debtor's bankruptcy estate rather than simply held in trust for a group of investors. The funds fall within the scope of a lender's security agreement, so the lender's claim is entitled to priority over the claim of the bankruptcy estate's unsecured creditors.
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.
The court granted the debtors' motion for contempt against a mortgage servicer who continued to contact the debtors about collecting on the loan for more than three years after a discharge was granted. The court awarded the debtors their attorneys' fees, $2,500 in actual damages, and $10,000 in punitive damages for these violations of the discharge injunction.