Court Rulings * 214bankruptcy.com

The numerous omissions on a Chapter 7 debtor’s statement of financial affairs, including his failure to list his interest in various companies that he acknowledged owning within six years of the petition date, his sale of residential property to his daughter for less than its appraised value within two years of the petition date, and his failure to list the property as one of his former addresses, were sufficient to warrant a denial of the debtor’s discharge based on his false oaths. The debtor was a mature and experienced businessman, who never attempted to amend his statement to correct these errors, and who offered no plausible explanation for omitting so much pertinent information from the statement of financial affairs.

The mere fact that a creditor’s judgment was recorded, and became a lien against the judgment debtor’s residence, before the New York legislature amended the state homestead exemption to increase the amount of the exemption from $10,000 to $50,000 did not affect the debtor’s right to claim a full $50,000 homestead exemption for purpose of filing a motion to avoid the judgment creditor’s lien in Chapter 7 as allegedly impairing the New York homestead exemption to which he would otherwise be entitled. The creditor’s judgment lien was not a vested property right that could not constitutionally be taken away, in the context of a motion to avoid the judgment lien on exemption-impairment grounds, by retroactive application of the increased homestead exemption.

Chapter 7 debtors were not prevented from complying with a bankruptcy statute that required them to timely provide the trustee with a copy of their federal tax returns due to circumstances beyond their control, rather than due to culpable neglect. Therefore, the bankruptcy court was required to dismiss their case, as requested by the trustee. In so holding, the bankruptcy court noted that the debtors’ conduct was particularly egregious, since they had been required to provide a copy of their tax returns to the Chapter 13 trustee prior to the conversion of their case to one under Chapter 7, and had failed to do so. Given the strict timeframes imposed by the statute, the court explained, Congress did not intend for trustees to spend inordinate amounts of time chasing down tax returns from debtors seeking relief in bankruptcy.

Where the dallas tx debtors’ Chapter 13 plan proposed to surrender the “910- car” in which the creditor held a properly perfected security interest, the “hanging paragraph” added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) did not eliminate the creditor’s post-surrender, post-sale deficiency claim, the Eighth Circuit Court of Appeals held. Rather, because Arkansas law allowed the creditor a deficiency judgment, the creditor was entitled to a general unsecured deficiency claim in the amount of the difference between the debt owed at the time of filing and the amount received from liquidation of its collateral, minus reasonable sales expenses.