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Ransom v. MBNA (In re Ransom), 577 F.3d 1026 (9th Cir. 2009), cert. granted, 2010 WL 333672 (April 19, 2010). In calculating "projected disposable income" for a chapter 13 plan, debtor may not claim an ownership expense for an automobile owned free and clear of liens, because that expense is not "applicable, which is somehow distinct from "actual." Contra, Tate v. Bolen (In re Tate), 571 F.3d 423 (5th Cir. 2009); Ross-Tousey v. Neary (In re Toss-Tousey), 549 F.3d1148 (7th Cir. 2008).
United Student Aid Funds v. Espinosa, 2010 WL 1027825 (March 23, 2010). Unanimous affirmance of Ninth Circuit holding that order confirming a plan that discharged a student loan was not void despite lack of either an adversary proceeding or a finding of undue hardship, which are not jurisdictional requirements. But Ninth Circuit opinion went "a step too far" in holding that bankruptcy court must confirm the plan in the absence of creditor objection. To the contrary, bnkruptcy courts have the "obligation to direct a debtor to conform his plan to the requirements of §§ 1328(a)(2) and 523(a)(8)," and to comply with § 523(a)(8) "the bankruptcy court must make an independent determination of undue hardship before a plan is confirmed, even if the creditor fails to object or appear in an adversay proceeding." And the "specter of such penalties" as under Rule 9011 should "deter bad-faith attempts to discharge student loan debt without the under hardship finding." Note there does not appear to be any requirement that the finding of undue hardship be made in an adversary proceeding, although the opinion notes the lender could have objected that it was not served with a summons and complaint. Already one court has applied Espinosa to deny confirmation of a strip down plan despite creditor's failure to object, ignoring that § 1325 contemplates creditor's acceptance of plan, unlike §§ 523(a)(8) and 1328(a)(2). In re Loban, 2010 WL 1292787 (Bankr. D. Minn. April 21, 2010).
Milavetz, Gallop & Milavetz v. United States, 2010 WL 757616 (March 8, 2010). Court unanimously holds attorneys are "debt relief agencies;" the § 526(a)(4) prohibition on advising clients to incur more debt in contemplation of bankruptcy does not violate the First Amendment because "in contemplation of bankruptcy" effectively means "with intent to abuse bankruptcy" (and advice to refinance to reduce interest rates or to borrow buy groceries and pay medical bills is OK); and § 528's advertising disclosure requirements are not unconstitutional.
Hamilton v. Lanning, 545 F.3d 1269 (10th Cir. 2009) (chapter 13 means test)(argued March 22, 2010). Cert was limited to "whether, in calculating the debtor's 'projected disposable income,' the bankruptcy court may consider evidence suggesting that the debtor's income or expenses during that period are likely to be different from her income or expenses during the pre-filing period." 130 S. Ct. 487 (Nov. 2, 2009).
©2010 Randolph J. Haines
