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