Opinions

The Middle District of Georgia offers opinions in PDF format, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.

Please note: These opinions are not a complete inventory of all judges' decisions and are not documents of record. Official court records are available at the clerk's office.

Chief Judge John T. Laney, III

Debtors filed a Motion to Abrogate the Administrative Order of January 3, 2005, which set forth the procedure for payment of debtors’ attorneys fees in Chapter 13 cases. After consideration of Debtors’ evidence of the increased burden on debtors’ counsel under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), the Court held that the Administrative Order should not be abrogated, but should be amended to allow the payment of $2,500 to debtors’ counsel in Chapter 13 cases without separate application or hearing (i.e., “no-look” fee). The Court is convinced that its modification of the Administrative Order will strike a much-needed balance between debtors’ interests in proposing and completing a successful Chapter 13 plan, secured creditors’ interests in recoupment despite oftentimes rapidly depreciating collateral, and bankruptcy attorneys’ interests in being fairly compensated for the vital service they provide to debtors. Along with an increase in the no-look fee, the Court amended the Administrative Order to increase the amount of the initial disbursement, the monthly payments, and the fee due in dismissed cases. Individuals should reference the Amended Administrative Order for specifics.

On June 16, 2006, Debtors’ filed a Motion to Reconsider the Memorandum Opinion issued by the Court on June 6, 2006 (see above). Debtors made four arguments in favor of their motion: (1) The language of § 1325(a)(*) does not prohibit “the stripping down of the lien or cram-down or bifurcation of the creditor’s claim”; (2) The Court’s reliance on In re Johnson, 337 B.R. 269 (Bankr. M.D.N.C. 2006), for the proposition that despite the purchase of items other than the vehicle, Nuvell still held a purchase money security interest in the vehicle, was improper being that the court in Johnson did not make that finding and that such an argument was not made; (3) The court did not consider the argument raised by Debtors at the April 4, 2006 hearing that the secured claim of Nuvell could still be bifurcated under the authority of § 1322, which states that a Chapter 13 plan may modify the rights of a secured creditor; and (4) Claims qualifying under § 1325(a)(*) are not entitled to the present value protection provided for in § 1325(a)(5)(B)(ii), such protection provided in the form of a “prime plus risk factor” interest rate as set forth by the United States Supreme Court in the case of Till v. SCS Credit Corp., 541 U.S. 465 (2004).

The Court held a hearing on Debtors’ motion to reconsider on July 18, 2006, and orally granted the motion, agreeing to reconsider a portion of the June 6 memorandum opinion. The Court revisited its discussion of whether Nuvell held a purchase money security interest. Considering many cases on O.C.G.A. § 11-9-103 (2002) and the statute itself, which defines “purchase money security interest” in Georgia, the Court confirmed that Nuvell does, in fact, hold a purchase money security interest in Debtors’ vehicle. The Court found no authority for the proposition that the purchase of an extended service contract, payment of a documentary fee, and payment of a governmental title fee, at the same time the collateral was purchased, disqualifies the creditor from holding a purchase money security interest in the collateral itself. The court held that the “transformation” rule, which is applicable in the Eleventh Circuit to situations involving refinancing or consolidation of past and present loans, was not applicable in the situation before the Court. The Court held that the extended service contract and the other fees were so inextricably related to the collateral itself, that the purchase of these items contemporaneous with the purchase of the collateral, could only mean that the cost of these items should be considered part of the purchase “price” of the collateral for purposes of applying O.C.G.A. § 11-9-103. The order issued with the June 6 Memorandum Opinion was, therefore, left unchanged.

Robert F. Hershner, Jr. (Retired)

The plaintiff allowed her sister, the debtor, to use her credit cards to make her house and car payments, and meet other obligations. The debtor promised to repay the loans by obtaining a home equity loan or by selling her residence. The debtor did not repay the loans and her applications to obtain a home equity loan were denied. The plaintiff contended the obligations were nondischargeable under Section 523(a)(2)(A). The court held that the plaintiff had not shown that the debtor had sufficient equity in her residence to honor her promise. The court concluded that the plaintiff knew the debtor was in severe financial distress but continued to make loans to the debtor. The court held that the debtor's obligation was dischargeable noting that the failure to perform a mere promise is not sufficient to make a debt nondischargeable.

The debtor filed for bankruptcy relief the day after the creditor foreclosed on the debtor's residence. The debtor contended that his interest in his residence was not terminated before he filed for bankruptcy relief. The court held that the language of the deed to secure debt provided that the debtor's right and equity would not terminate until the creditor gave the purchaser at foreclosure title to the debtor's residence.

A creditor filed an adversary proceeding contending that the Chapter 7 debtors' discharge shall be denied under 11 U.S.C.A. § 727(a). The debtors moved to convert the Chapter 7 case to a Chapter 13 case. The creditor objected. The creditor contended the debtors had shown a lack of good faith and a lack of candor by filing inaccurate bankruptcy schedules and an inaccurate statement of financial affairs. The court granted the debtors' motion to convert, noting that the plain language of Section 706(a) provides that the debtors had a right to convert their case.

Judge James D. Walker Jr. (Retired)

In a Chapter 13 plan, a 910 claim must receive the greater of (1) the full amount of the claim without interest, or (2) the amount the creditor would receive if the claim were crammed down with Till interest paid on the value of the collateral.

In a Chapter 13 plan, a 910 claim must receive the greater of (1) the full amount of the claim without interest, or (2) the amount the creditor would receive if the claim were crammed down with Till interest paid on the value of the collateral.

In a Chapter 13 plan, a 910 claim must receive the greater of (1) the full amount of the claim without interest, or (2) the amount the creditor would receive if the claim were crammed down with Till interest paid on the value of the collateral.

In a Chapter 13 plan, a 910 claim must receive the greater of (1) the full amount of the claim without interest, or (2) the amount the creditor would receive if the claim were crammed down with Till interest paid on the value of the collateral.

The debtors would not be denied discharge when the disappearance of certain business assets and business records occurred despite the debtor-wife’s efforts and intent to store them indefinitely. Furthermore, errors and omissions on the debtors’ schedules do not result in denial of discharge when those problems were caused by a combination of poor legal counsel and the debtors’ ignorance.

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