Considering all relevant facts and circumstances, including the debtor’s choice to only work part-time, the court found that debtor's ability to pay her student loan debt was entirely within her control. The court found the debt nondischargable under § 523(a)(8); the debtor had a budgetary surplus and agreed at trial that she could afford a payment of $30.00 a month, the current payment amount. The debtor has appealed the decision.
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Judge Ben T. Barry
In this opinion, the court found that the creditor/plaintiff did not have an agricultural lien in the debtors’ 2015 Arkansas crop proceeds because the debtors did not use any products sold or delivered by plaintiff in 2015. The court also found that a separate defendant held only an unsecured claim in the debtors’ case because a statutory landlord lien on crop proceeds had expired prior to the debtors’ filing their petition.
The court sustained the trustee's objection to exemptions, finding that the debtor had only a remainder interest in the real property at issue and, therefore, could not claim a homestead exemption under Arkansas law.
The debtor asked the court to declare that the Contract for Deed between her and a homeowner was an equitable mortgage. The court found that the contract was a contract that allowed the debtor to rent the property for one year while arranging alternative financing to purchase the property and that the sellers did not waive the forfeiture clause contained within the contract. The debtor also wanted the court to find that the sellers had breached the contract even though the debtor has remained in the house for almost twelve years after entering into the contract, eleven of which she has been in a bankruptcy case. The court denied all of the debtor’s requested relief.
In this opinion, the court resolved two legal issues: (1) whether a putative debtor is entitled to the protection of the automatic stay if it is later determined that such debtor was not eligible to be a debtor under § 109(h) and (2), if the stay does go into effect, should any action that is taken in violation of the stay be annulled after the Court determines that the debtor was not an eligible debtor under § 109(h).
The court granted the IRS’s motion for summary judgment finding that the debtor’s tax liability for post-petition interest and unpaid unsecured debt was not discharged under § 523(a)(1). The debtor argued that under Espinosa, the debtor’s tax liability was discharged because the IRS did not object to the debtor’s plan, which proposed to pay only the IRS’s priority debt and a pro rata amount of the IRS’s unsecured debt. The court distinguished Espinosa and found the Court’s holding in Espinosa was not applicable in this instance.
In a motion to prohibit the debtors' use of cash collateral, a creditor-bank alleged that the debtors defaulted on eight loans with the bank before filing their chapter 11 petition. The bank argued that the debtors' pre-petition default triggered an absolute assignment of rents that excluded the rents from the debtors' estate. Because the court found that no pre-petition default had occurred, the court denied the bank's motion without prejudice to the filing of an objection to a subsequent motion of the debtors' to use cash collateral under § 362(c).
In this opinion, the court confirmed the debtors’ modified plan that proposed to surrender collateral to a secured creditor and treat any deficiency as an unsecured claim. The court also explained its interpretation of the debtors’ motion for authority to incur a debt in the light of the trustee’s response that he “does not necessarily oppose the motion.”
Judge Richard D. Taylor
The provisions of a confirmed plan are binding on a creditor regardless of a contrary proof of claim when the confirmed plan provides for a specific treatment in derogation of the proof of claim.
Chief Judge Phyllis M. Jones
Trustee's objection to exemptions sustained. Real property could not be exempted as a residence used by the Debtors under Section 522(d)(1) where Debtors did not live on the property, the dwelling on property was uninhabitable, and where Debtors were neither physically nor financially able to repair the house or prepare the property to accommodate a travel trailer. In addition, Debtor and Joint Debtor could not exempt personal property owned solely by the other spouse. However, Debtor was found to have an inchoate curtesy interest in real property owned by Joint Debtor and may amend his exemptions to include the present value of that interest.