BANKRUPTCY CASE
LAW:
DEBTS NOT DISCHARGEABLE
The following
is for the exclusive use of attorneys.
This firm does not make any representations as to the accuracy or current status of any case cited herein.
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Most Complaints objecting to
dischargeability of a debt includes 523(a)(6) include a
"catchall" count. We've been successful in knocking out
that count in almost every case. Regarding intent
and how to prove it, the best advice I can offer is
to use
Kawaauhau v.
Geiger, 523
Collateral Estoppel principles: The Supreme Court has held that “collateral estoppel principles do indeed apply in discharge exception proceedings pursuant to §523(a).” Grogan v. Garner, 498 U.S. 279, 285 fn. 11, 111 S.Ct. 654 (1991). In the Ninth Circuit, collateral estoppel principles are applied in nondischargeability litigation to the extent that they would apply were the litigation being held in a court of the state where the original judgment was entered. In re Nourbakhsh, 67 F.3d 798, 800 (9th Cir. 1995), citing, Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985) This is true, in the Ninth Circuit, even in default cases. Nourbaksh, supra, 67 F.3d at 800.
It appears that most states find collateral estoppel should be applied where (1) there is indentity of the parties, (2) the issues are identical, and (3) the matter has been litigated to final conclusion. See, e.g., Trucking Employees of North Jersey Welfare Fund, Inc. v. Romano, 450 So.2d 843, 845 (Fla. 1984); Mobil Oil Corp. v. Shevin, 354 So.2d 372, 374 (Fla. 1977). Other states sometimes add that the issue must be "necessarily" decided in the prior litigation, and also be "decisive." See, e.g., Buechel v. Bain, 97 N.Y.2d 295, 303, 740 N.Y.S.2d 252, 766 N.E.2d 914 (2001).
Griffin v. Wardrobe, No. 07-16635
U.S. 9th Circuit Court of Appeals, March 16, 2009
In an action to declare a state judgment for fraud
non-dischargeable in bankruptcy, summary judgment for
Plaintiff is reversed, where the state court improperly
allowed Plaintiff to amend her complaint in violation of
the automatic stay under the Bankruptcy Code. The stay
had been lifted for the sole purpose of the Movant
pursuing the Debtor’s bond.
Lockerby v. Sierra, No. 06-15928
U.S. 9th Circuit Court of Appeals, August
07, 2008
In the bankruptcy context, an intentional breach of
contract cannot give rise to nondischargeability under
11 U.S.C. section 523(a)(6) unless it is accompanied by
conduct that constitutes a tort under state law.
Read more...
CREDITOR WITH NONDISCHARGEABLE DEBT CAN COLLECT INTEREST FOLLOWING CHAPTER 13 DISCHARGE In re Foster, ___ F.3d ___ (9th Cir. 2003) – Feb. 8, 2003 Debtor's chapter 13 plan provided for full payment of delinquent non-dischargeable child support. Debtor completed the plan and was granted a discharge. Subsequently, Ventura County District Attorney went after debtor for the accumulated interest that was not paid through the plan. Held, plan could not provide for payment of interest, and creditor could collect unpaid interest following discharge. This is the majority rule.
A claim for post-petition interest on a debt not dischargeable in Chapter 13 under 11 U.S.C. § 1328(a) is not part of the bankruptcy estate because such unmatured interest was not part of the debt as of the date of filing the petition. Thus, a creditor cannot insist on interest being paid through the plan. And, the Code does not explicitly prohibit collection of post-petition interest after a debtor completes a confirmed chapter 13 plan.
CRIMINAL RESTITUTION and CHAPTER 13: While criminal restitution is non-dischargeable under section 523, it is not one of the listed priority debts in section 507 (the same problem as with educational loans). Therefore, any attempt to pay that unsecured debt in full in the plan without the same percentage payback to other unsecured creditors would likely cause the trustee to object. Instead, try to get the agency to whom the restitution is owed to agree to a long term payback of the restitution--longer than the Ch 13 plan's duration . Then, using section 1322(b)(5), pay the restitution outside the plan as a budget expense.
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