CASES IN REVIEW
Cases in Review March , 2017
“ Cases in Review ” highlights recent cases that may be of particular interest to consumer bankruptcy practitioners . It is brought to you by Consumer Bankruptcy Abstracts & Research ( www . cbar . pro ) and the National Consumer Bankruptcy Rights Center ( www . ncbrc . org ).
Chapter 7 — Allowance of trustee ’ s commission : Disallowing in full the Chapter 7 trustee ' s applications for compensation in two cases , the court reasoned that the services rendered by the trustee were not necessary to the administration of the estates , were not reasonably likely to benefit the estates , and could work a substantial harm on the debtors if they were approved , where the trustee attempted to sell the debtors ' residences , which were encumbered by liens in amounts that exceeded the properties ' values and were properly exempted by the debtors , through negotiation of carve-out agreements with the IRS , which held a tax lien on both residences . These types of arrangements between trustees and the IRS , the court declared , had the potential to cause " devastating " consequences for Chapter 7 debtors . In re Christensen , 561 B . R . 195 ( Bankr . D . Utah , Dec . 14 , 2016 ) ( case nos . 2:15-bk-29783 , 2:15-bk- 29783 ), appeal filed , Jubber v . Bird , Case No . 16-39 ( 10th Cir . B . A . P ., filed Dec . 28 , 2016 ).
Chapter 13 — Co-debtor stay : Consumer debt owed by the Chapter 13 debtor ' s nonfiling spouse was not “ consumer debt of the debtor ” protected by the codebtor stay even though Wisconsin law allowed the debt to be satisfied from marital property in which the debtor had an interest . Such debt was not debt " of the debtor ," and in any event a creditor ' s attempting to collect a judgment from the spouses ' marital property would likely violate the automatic stay that already protected the debtor . Smith v . Capital One Bank , 845 F . 3d 256 ( 7th Cir ., Dec . 22 , 2016 ) ( case nos . 16-1422 , 16-1423 ).
Chapter 13 — Confirmation of plan — Standing to object : A city that had sold real property owned by the Chapter 13 debtor in a prepetition tax sale lacked standing to object to a provision in the debtor ' s proposed Chapter 13 plan permitting the debtor
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National Association of Consumer Bankruptcy Attorneys Spring 2017 CONSUMER BANKRUPTCY JOURNAL 37