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Confirmation Might Not Always Superceed A Stipulation Entered

In Taumoepeau v. Manufactures & Traders Trust Company, et. al. the 10th Circuit Court of appeals had to decide if a drop dead order or stipulation entered before confirmation concerning strictly post-petition house payments (which did not in fact concern the abt pre-ptition payments) on a residential mortgage was superseded in a way as to make the drop dead order or stipulation non-enforcible after confirmation.

The 10th Circuit, like the Bankruptcy Court and the BAP before it, found that both the drop dead stipulation and the confirmed plan could be read harmoniously and the automatic stay was not in effect to stop the lender's actions in selling the house at foreclosure even though the stipulation was not referred to or included in the confirmed plan.

Most of the decision issued by the 10th Circuit deals with a complicated issue of whether the Court had the jurisdiction to hear the appeal given its late filing.  If found it did, but that in no way impacted on its decision concerning the drop dead stipulation entered in this case.

The relevant facts are that in February 2003 (before BAPCPA) the Debtors filed Chapter 13 bankruptcy and a plan addressing their pre-petition mortgage arrearage.  Their amended plan in July 2003 continued this treatment s to the pre-petition arrearage only.  After filing, but before confirmation, however, the Debtors fell approximately $10,000.00 behind in mortgage payments post-petition.  It has to be assumed that they were required to make these payments on their home directly.  To resolve this post-petition arrearage only, the Debtors and the Creditor entered into a stipulation, which allowed for the automatic stay to lift and the lender to foreclose on the Debtors' home if the Debtors failed in making future payments and other considerations.   Four days after entering into this stipulation the Bankruptcy Court confirmed the Debtors' plan, which provided for the pre-petition arrearage, but made no reference to the stipulation or the post-petition payments.  The Debtors eventually defaulted on the stipulation, the stay was lifted, and the lender proceeded with foreclosure, and in fact did foreclose.  The Debtors then brought an action to stop their eviction from the house claiming that the confirmation superseded the stipulation.

The Bankruptcy Court disagreed with the Debtors.  It was appealed to the BAP and it disagreed with the Debtors as well.  The 10th Circuit found that indeed the post-petition payments missed were nowhere addressed in the order of confirmation.  However, the Court found that the stipulation in no way dealt with the issue of the lenders pre-petition claim for missed payments, and as such the documents were somehow mutually exclusive.  To state it as the Court did, "Like the bankruptcy court in interpreting its own orders, and like the BAP in affirming that interpretation, we conclude that the stipulation and amended plan can be read harmoniously, each addressing a separate debt owed."

In short, the final decision of the 10th Circuit fell on the interpretation of the orders of the Bankruptcy Court.  It is important to note that there exist decisions that disagree with the conclusion reached by the 10 Circuit, and it is concerning that the 10th Circuit would reach this decision without citing to one case or Bankruptcy Code provision, or text, that supports its findings.  It is rare to find such a decision devoid of all such references, and I am not sure what credence that can be given to this decision for this very reason.

A Better Way To Market Your Bankruptcy Practice?

Upcoming NACBA Elections - Ask The Candidates!

Jay Fleischman over at Bankruptcy Practice Pro is not only encouraging more bankruptcy attorneys to vote in the upcoming NACBA elections but, believing that many do not vote because they are not informed, is providing you an opportunity to know the candidates.  Read his post by CLICKING HERE.

As he points out, each year only about 400 of the 3,000 members of the National Association of Consumer Bankruptcy Attorneys vote in these elections.  As a result, your decision and opinion might not be represented.  As Jay points out, "[w]ithout your input, NACBA is nothing more than a wast of space and time".  Yet, it seems that the organization is best to represent you and your interest in lobbying, technology, office management and more.  So, you need to get involved by voting.

Jay has, therefore, issued a challenge to the NACBA candidates.  It is called "30 Questions".  Each candidate will chose 10 questins for the other candidate to answer.  The members of NACBA will submit an additional 10 questions.  Jay has proposed 10 questions.  No holding back.  All serious questions will be considered.  Jay will then call each candidate seperately and ask the questions, and the entire conversation will be recorded, and then you will be able to listen to the questions and answers online via mp3 audio.

Send your questions to Jay by email at bankruptcy@gmail.com.  The questions need to be submitted before Friday, April 11, 2008 at 5:00 EST.

British Paper Declares USA 2008 Great Depression

The British paper The Independent has declared the USA is headed for the Great Depression of 2008.

Shocking?  Yes.  But, to them none of the economic indicators appear sound, especially in the area of jobs and the need for food stamps.

The paper declares that things are not only bad on Wall Street, but that they are worse on Main Street, stating that as official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

Emblematic of the downturn until now has been the parades of houses seized in foreclosure all across the country, and myriad families separated from their homes. But now the crisis is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet. As a barometer of the country's economic health, food stamp usage may not be perfect, but can certainly tell a story.

Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months.  And the next monthly job numbers, to be released this Friday, are likely to show 50,000 more jobs were lost nationwide in March, and the unemployment rate is up to perhaps 5 per cent.