Court: United States Bankruptcy Court, W.D. Michigan; November 17, 2017; Us Bankruptcy; United States Bankruptcy Court
The court, led by Judge Scott W. Dales, held an evidentiary hearing on August 17, 2017, regarding a chapter 13 confirmation objection from creditor Lawrence W. Newmeyer against debtor Darcy A. Hager. The court denied the initial confirmation and indicated that the case would be dismissed unless the Debtor filed a timely notice to convert, motion to dismiss, or a substantially revised repayment plan. Subsequently, the Debtor submitted a Revised Plan and a motion to confirm it, which the chapter 13 trustee, Barbara P. Foley, supported, while Mr. Newmeyer continued to object.
During a hearing on November 16, 2017, the court expressed its intention to confirm the Revised Plan, contingent upon addressing feasibility concerns raised by the court and Mr. Newmeyer. The Debtor responded by increasing the dividend to unsecured creditors from $2,000 to $30,000, extending the plan term to 60 months with annual increases, and securing additional contributions from her ex-husband.
The court noted that Mr. Newmeyer's objections were primarily focused on the plan's feasibility, particularly the reliance on the ex-husband's monthly contribution and the suggestion that the Debtor should surrender her condominium. However, the Trustee's counsel affirmed that the plan payments were current and recommended confirmation, supporting the Debtor's claim of feasibility. The Debtor's ex-husband provided an affidavit affirming his ability to contribute financially.
The court proposed a provision for expedited dismissal in case of default under the Revised Plan, which the Debtor accepted, ensuring she would not fall more than one month behind. The court found the Revised Plan feasible, emphasizing a practical approach to the Debtor's living expenses, which were reduced by her ex-husband's contributions. The court criticized the creditor's stance as punitive, reaffirming that the purpose of chapter 13 is to help debtors maintain their homes while balancing creditor interests.
Mr. Newmeyer is seeking further concessions regarding the Revised Plan, referencing previously considered facts, particularly Mr. Hager's past reluctance to pay child support. The court, having reviewed the established record and without new evidence from Mr. Newmeyer, decided against a second evidentiary hearing to avoid unnecessary delays and costs. The court is ready to confirm the Revised Plan, which incorporates significant pro-creditor adjustments, including an increased dividend to unsecured creditors and a higher monthly contribution from Mr. Hager. The court's earlier hesitations about feasibility have been alleviated by improved payment history and the implementation of a strict "drop dead" provision. The court is confident that the Debtor will continue to meet her payment obligations, backed by the Trustee's positive report. Should the Debtor default, the court has outlined protective measures for affected parties. Furthermore, the court will require proper fee applications instead of a no-look fee due to prior counsel involvement. The Motion to confirm the Revised Plan is granted, with stipulations for case dismissal upon default notification. The court affirms that confirmation requirements under 1325(a) are satisfied, emphasizing the burden of proof lies with the objecting party during the hearing, while the debtor must prove compliance with confirmation standards.
