If a creditor objects to chapter 13 eligibility in good faith, the court may look behind the debtor’s schedules to decide whether the debt exceeds the cap.
Permanently reducing the claim by the appraised value without a backstop means the creditor isn’t receiving the ‘indubitable equivalent,’ BAP says.
Ninth Circuit assumed that transferred property must remain property of the estate after conversion from ‘13’ to ‘7’ before the chapter 7 trustee can avoid an unauthorized transfer under Section 549.
Taggart left open the question of whether the ‘no objectively reasonable basis’ standard for discharge violations also applies to contempt of the automatic stay.
Even the dissenter in the Ninth Circuit would not let a debt buyer off the hook if the complaint were properly pleaded.
The creditor was guilty of an automatic stay violation, but Taggart insulated the creditor from liability for a discharge violation for continuation of the same conduct.
Dissenter in the Ninth Circuit says that utilizing provisions in the Bankruptcy Code is not bad faith barring confirmation.
The Ninth Circuit may be backing off from Ybarra, a case that waives discharge for attorneys’ fees if the debtor ‘returns to the fray.’
The Ninth Circuit BAP closed a loophole that would have allowed a recipient of public assistance benefits to discharge a debt for overpayment.
Trustees in chapter 12 fare better than chapter 13 trustees if a case is dismissed before confirmation.