A debtor who sought to declare a debt– secured by a Jaguar he purchased just beforeprior to filingdeclaring bankruptcy– might be a candidate for the “Chutzpah of the Year” award.
Looking for to declare was one thing, but asking the Texas court to reconsider its original unfavorable ruling may have been worse.
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According to the debtor’s motion, US Insolvency Judge Stacey G. Jernigan of the Northern District of Texas incorrectly concentrated on his bad faith rather than on his capability to make the car payments required in the arrangement.
Debtors in Chapter 7 personal bankruptcy cases might reaffirm financial obligations under specific situations.
When their monetary disclosures reveal their costs exceed their income, there is a presumption that permitting the financial obligation to be declared would result in unnecessary hardship.
In those circumstances the arrangement is not enforceable unless the court finds the debtor has actually gotten rid of the presumption.
That’s exactly what the debtor attempted to do in this case.
Judge Jernigan denied the motion to reconsider.
The judge stated she could only speculate that the debtor took concerndiffered with her remark that his reaffirmation demand was “downright offensive.” This may have led him to conclude that she was more concentrated on his bad faith than on his ability to pay.
“To be sure, the court had severe concerns about the debtors good faith (and excellentcommon sense) in acquiring a Jaguar nearly right away before filing for insolvency,” Judge Jernigan said in her denial.
“To be sure,” she continued, “the court occurred to discover– juxtaposed versus this eve-of-bankruptcy purchase– that the debtor has $1,247,209 of protected financial obligation set up, and more than 50 unsecured financial institutions (many of whose claims are arranged as ‘unknown’ in quantity– some customer and some organisation financial obligation)– none of whom are likely to receive a circulation through this personal bankruptcy case.
“To be sure, the court was bothered by authorizing reaffirmation of overall debt ($20,948.48) that was more than the existing market valuemarket price of the car ($20,125).
“To be sure, the court was pondering whether the $200 month-to-month expenditure quote for the debtor’s transport costs (consisting of gas and cars and truck upkeep), could potentially be practical or affordable on an 8-year-old foreign vehicle.
“And, to be sure, the court recognized that the debtor likely required a cars and truck in life and the car payment itself ($378 monthly), in isolation, doesn’t sound that offensive (although paying this much for an 8-year-old foreign luxury cars and truck seems a little bit various than paying this much for a newer mid-range cars and truck).”
The debtor could not conquer the anticipation of undue difficulty, Judge Jernigan concluded.
And, she added, “He merely can not manage this vehicle.”
In re Todd A. Grether, 2016 WL 3961268 (Bankr. ND Tex.
July 15, 2016).