Consumer Bankruptcy Journal Winter 2016 - Page 48

NCBRC CASES IN REVIEW Chapter 13—Confirmation of plan—Claims treatable in plan: Resolving appeals in two cases raising the same issue, the district court held that, at the time the debtors filed their Chapter 13 petitions, after their prepetition pawn transactions had matured but before their right to redeem their pawned motor vehicles had expired, the debtors still had an ownership interest in the vehicles, so that the vehicles were included in property of the estate in each case, and the pawn shop had a secured claim for the payment of the contractual redemption amount that could be modified in the debtors' proposed Chapter 13 plans. Title Max v. Northington, 559 B.R. 542 (M.D. Ga. Oct. 27, 2016) (case nos. 4:16-cv-172, 4:16-cv-174). Chapter 13—Confirmation of plan—Treatment of unsecured claims—Unfair discrimination—Student loan debt: The separate classification of the Chapter 13 debtor’s student loan debts in her proposed Chapter 13 plan did not unfairly discriminate against other unsecured creditors, and therefore was permissible under Code § 1322(b)(1), where (1) there was a good-faith, rational basis for the proposed classification, with the reason being to cure the student loan default and to improve the debtor’s prospects for reemployment as a paralegal; (2) the separate classification was necessary to the debtor’s rehabilitation; and (3) there was a meaningful payment to the class discriminated against. In re Belton, Case No. 3:16-bk-3040 (Bankr. D. S.C., Oct. 13, 2016). Dischargeability of debt—Tax debt under Code § 523(a)(1): The Internal Revenue Service failed to prove by a preponderance of the evidence that the Chapter 7 debtor failed to file a tax return for 2006, and thus the debtor's tax debt for that year was discharged. While the debtor's 2006 return was not reflected on the debtor's tax transcript, the debtor provided a firsthand account of preparing and mailing her returns for five years, including 2006, to the address the IRS provided, the IRS never answered that testimony, and the debtor's testimony was credible. In re McGrew, --B.R. ----, 2016 WL 5947239 (Bankr. N.D. Iowa, Oct. 13, 2016) (adv. proc. no. 6:15ap-9024). Proof of claim—Timeliness: In a Chapter 13 case, a creditor must file a timely proof of claim in order to participate in the distribution of the debtor's assets, even if the debt was listed in the debtor's bankruptcy schedules. A debtor's acknowledgment of a debt in a bankruptcy schedule—whether or not that amounted to a judicial admission—does not satisfy a creditor's affirmative duty to file a proof of claim. Moreover, the deadline to file a proof of claim in a Chapter 13 proceeding is “rigid,” and the bankruptcy court lacks equitable power to extend this deadline after the fact. In re Barker, 839 F.3d 1189 (9th Cir., Oct. 27, 2016) (case no. 14-60028). Property of the estate—Exemptions: Regardless of the bankruptcy court's take on ©National Consumer Bankruptcy Rights Center www.ncbrc.org 48 CONSUMER BANKRUPTCY JOURNAL Winter 2016 National Association of Consumer Bankruptcy Attorneys