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Cases in Review December, 2016
“ 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— Denial of discharge: As there was no " case or controversy," the bankruptcy court lacked jurisdiction over a proceeding in which a creditor holding only a claim for a nondischargeable debt sought to deny the Chapter 7 debtor ' s discharge under Code § 727. Reed v. Blount, 2016 WL 6211691( E. D. Mich. Oct. 25, 2016)( case no. 2:16-cv-11777).
Chapter 7— Surrender of collateral for secured debt: Code § 521( a)( 2) requires a Chapter 7 debtor who files a statement of intention to surrender the property serving as collateral for a secured claim to surrender the property both to the Chapter 7 trustee and to the creditor. Even if the trustee abandons the property, the debtor ' s duty to surrender the property to the creditor remains. Moreover,“ surrender” requires a debtor to discontinue his opposition to a foreclosure action, and the bankruptcy court has the authority to order a debtor to cease his opposition. In re Failla, 838 F. 3d 1170( 11th Cir. Oct. 4, 2016)( case no. 15-15626).
Chapter 7— Surrender of collateral for secured debt: Explicitly disagreeing with In re Failla, 838 F. 3d 1170( 11th Cir. Oct. 4, 2016), above, the bankruptcy court held that surrender under Code § 521( a)( 2) does not require a Chapter 7 debtor to give up all rights to defend against a post-discharge foreclosure. Instead, the debtor ' s stated intent to surrender merely means that the debtor does not intend to reaffirm, redeem, or exempt the property. In re Ryan,--- B. R.----, 2016 WL 6102312( Bankr. D. Haw. Oct. 19, 2016)( case no. 1:09-bk-1604), appeal filed, Case No. 16-1391( 9th Cir. B. A. P., filed Nov. 4, 2016).
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