“Clogged” Conduit – Cannot Constitute Relief from Stay

November 29, 2017


  • Debtor Filed a Chapter 13 Bankruptcy Petition.
  • Plan provided for payments to the Trustee for the Mortgage pre-petition arrearages.
  • Trustee would act as a conduit to make the payments to the Lender.
  • Lender filed post-petition relief from the automatic stay since the Debtor was $11,500 in post- petition arrearages.
  • Debtor learned of this when served with bank’s motion.
  • Debtor objected to the bank’s motion since she provided proof that all her payments were timely to the Trustee and the documents support her weekly payroll deductions and payments to the Trustee’s office.
  • Trustee’s office confirmed that the Debtor was current on all plan payments. The timing and amounts of disbursements were based on the Trustees’ offices administration of conduit plans.

Court Ruling

  • Debtor’s plan was a “conduit plan” and only needed to satisfy her obligation under the plan for automatic stay protection.
  • Court found that the lender made a prima facie case for the stay relief, but the debtor prevailed because the delinquency was not her fault.
  • It is reasonable for the Debtor to assume that the payment to the mortgagee under the terms of the Plan.
  • No ruling was made on the Trustees’ offices for customary practices of timing of payments.


We Need Support When Going through Financial Hardships – Dogs Help

October 26, 2017

Although I can always be reached by my clients, sometimes extra comfort can come from pets.

We are a dog friendly office.

As you can see in this picture, one of my clients is very close to his dog and his friend comes everywhere with him.

So, he came to the office to make his owner feel more comfortable.    As you can see, the dog was listening carefully but got board toward the end.   He was right on top of the situation on my conference room table.

Pets are wonderful – Remember my office is dog friendly.

Pro se Debtor Still Working on His 8th Amended Chapter 13 Plan

October 15, 2017


  • Debtor committed and was head strong to go it alone and  not utilize an attorney for file his Chapter 13 Plan.
  • Filed for relief in September of 2014.
  • Trustee objected to the Debtor’s 8th amended Plan.
  • Debtor’s Plan was a zero payment; with gross income of $117,269.00.

Continue reading…

Debtor Cannot Reopen Case After 8 Years

October 5, 2017


  • The Bankruptcy Law requires all Chapter 7 and Chapter 13 Debtors to take 2 counseling courses before your debts can be discharged: (either on-line or over the phone).
  • Pre-filing counseling must be taken before your petition is filed; .
  • Post-filing education must be taken before you obtain your discharge.

Continue reading…

Court – Gets Tough on Willful Violations of Automatic Stay – Car Impounded Twice

September 25, 2017


Debtor Filed a Chapter 13 petition and listed  parking fines in the bankruptcy petition.

Parking Authority impounded the Debtor’s car for unpaid parking fines.

Parking Authority impounded the debtor’s car a second time.

Continue reading…

IRA Withdrawn After Chapter 7 Filed – Trustee Could Not Claw-back

September 10, 2017


Retirement accounts are exempt when you file bankruptcy.

You are able to keep your retirement accounts and protect your future.

Debtor filed for Chapter 7 Bankruptcy

Debtor withdrew $130,000.00 from his IRA (did not rollover the funds into another Retirement Account) after petition was filed but before case was closed.

Trustee filed an action to recover the withdrawn funds.

Continue reading…

Home with Value to Homeowners but Trustee Wants to Take – The Court Decides

September 8, 2017


  • Couple/Debtors filed for Chapter 7 Bankruptcy.
  • Debtors state their home was worth $108,000; they owed $91,581.
  • Trustee argued that he wanted to sell the home and evict the homeowners.
  • Trustee presented appraisal; and a realtor who said the property was worth $204,000 and felt the damages and the need for repairs were overstated.
  • Debtors presented appraisal: $185,000 after making repairs costing $60,000.00:   $171,000 after repairs of $63,000 were made

Continue reading…

Who Receives the Money Held By The Trustee When a Case is Dismissed?

August 29, 2017

Who Receives the Money Held By The Trustee When a Case is Dismissed?

Unfortunately, some Chapter 13 Bankruptcy cases are dismissed after they are confirmed/approved. This could be for various reasons, e.g. Debtor did not pay the Trustee Fees.

The Trustee holds moneys he/she receives to pay creditors in a separate account earmarked for Creditor payments throughout the case as well as Trustee fees and Administrative Claims.  When a case is dismissed and there are moneys left in the Trustee’s account for this case, the Debtor must be refunded this money.

The Trustee cannot disburse the remaining funds to anyone but the debtor.

Back to top

Submit your Feedback