Movant sold a parcel of land to Debtors through an owner financing agreement which involved a final balloon payment at the end of the one year term. After the balloon payment became due but before payment was made, Debtors filed their Chapter 13 petition. Although Debtors proposed to pay Movant in full over the life of the plan, Movant objected to confirmation. Overruling Movant’s objection, the court held that § 1322(c)(2) allows for the payment of a prepetition matured balloon over the life of the plan.
Opinions
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Judge John T. Laney, III
During Debtor’s Chapter 13 case, a educational loan creditor’s claim was disallowed to which the creditor did not object. Upon completion of the plan, Debtor received a general discharge. Creditor subsequently intercepted Debtor’s tax refund in payment of the school loan debt. Debtor filed a motion for contempt against the educational loan creditor alleging violation of the discharge injunction. The court held the disallowance of a claim does not necessarily discharge that claim. This is especially true given that educational loans are presumptively nondischargeable under § 523(a)(8) and the discharge order specifically excepted school loans from the discharge.
Analyzing Defendant’s motion for reconsideration of a default judgment as a motion to set aside an entry of default, the court failed to find "good cause" under Rule 55(c) of the Federal Rules of Bankruptcy Procedure. Therefore, the court held that the entry of default would not be set aside. Because the court also failed to find "excusable neglect" under Rule 60(b), the court denied Defendant’s motion to set aside the default judgment.
Section 1322(c)(2) allows certain short-term mortgages, which would otherwise be covered by the section 1322(b)(2) prohibition of modification, to be crammed down to value and paid at a market rate of interest.
In this chapter 12 case, the court ruled that the creditor did not carry its burden of proof to establish nondischargeability under § 523(a)(2)(A), (4), or (6) of the Code. The court also ruled that language in a consent order, which allowed Debtor's late-filed answer to the counterclaim, did not entitle the creditor to a default judgment, and that collateral estoppel did not apply to bar Debtor from contesting the nondischargeability complaint.
The court grants Trustee relief from his stipulation, and from an order incorporating that stipulation, under Rule 60(b)(5) and under Eleventh Circuit case law. It would work an injustice if Trustee were held to his stipulation now that the order upon which the stipulation was based has been reversed.
The court sustains Debtor's objection to McLane Company, Inc.'s proof of claim. The court finds that McLane Company, Inc. has not established the elements necessary for a reclamation claim under § 546(c) of the Code.
Creditor (Piggly Wiggly) is held in contempt for willfully violating the automatic stay based on its having issued a warrant postpetition for Debtor's arrest based on a worthless check written prepetition. Debtor carried her burden and satisfied both prongs of the test established in Barnette v. Evans, 673 F.2d 1250 (11th Cir. 1982), so that having the criminal warrant issued was stayed by the bankruptcy filing.