The Southern District of Illinois offers a database of opinions. These opinions were entered between the period of 2/1987 and the present. To conduct a detailed search, enter a keyword or case number in the search box to the right.


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Date Filedsort ascending Summary Case Number PDF

In re: Kerri Lynn Sierra Scott

Summary: Debtor is represented by a local attorney of UpRight Law, LLC (“UpRight”). In reviewing the debtor’s schedules, the Court noticed that the local attorney was charging significantly more filing as a partner for UpRight than he typically does when filing under his own practice. Further review showed that the debtor’s case was not filed until ten months after he had initially retained UpRight. These concerns led the U.S. Trustee to file Motions for 2004 Examinations of the debtor and her attorney, which were granted. Even though the Examinations had not yet taken place, UpRight filed Motions to Close the case, arguing that the Court was required to close the case pursuant to 11 U.S.C. §350. In denying the Motions to Close, the Court held that not only was it not required to close the case at that time, but the Court has an independent statutory duty to review attorneys’ fees pursuant to 11 U.S.C. §329 and Federal Rule of Bankruptcy Procedure 2017. Although administratively the case was capable of being closed, the pending matters before the Court supported its decision to keep the case open.

19-30157 View

In re: Pamela Therese Miller

Summary: The question presented to the Court was whether the debtor must amend her confirmed Chapter 13 plan to increase her monthly plan payment after she lowered her mortgage payment through a mortgage modification. The debtor’s plan provided for the debtor to make her mortgage payment directly to the lender, or “outside the plan.” After confirmation, the debtor refinanced her mortgage to reduce the interest rate and lower her mortgage payment. The Trustee then filed a motion to compel, seeking to increase the debtor’s monthly plan payment by the amount that the mortgage payment had been reduced.

In denying the Trustee’s motion, the Court applied the standard set by the Seventh Circuit Court of Appeals in Germeraad v. Powers, 826 F.3d 962 (7th Cir. 2016) for considering requests to increase plan payments pursuant to 11 U.S.C. §1329. In Germeraad, the Seventh Circuit held that a bankruptcy court may exercise its discretion to require a plan modification under §1329, if the change in the debtor’s financial circumstances makes an increase in plan payments affordable. Here, the Court determined that the debtor’s mortgage modification had resulted in a monthly surplus of only $51.00, and given the debtor’s circumstances, that small surplus did not make an increase in plan payments affordable.

19-60113 View

In re: Kamille V Guthery

Summary: The issue before the Court was whether the Chapter 13 debtor could deduct expenses she was not presently incurring, but expected to incur in the future, when calculating her disposable income under 11 U.S.C §1325(b)(1)(B). The Trustee objected to the debtor’s Chapter 13 plan arguing that the debtor could not reduce her disposable income by health insurance and childcare costs that she was not actually incurring. The debtor had applied for health insurance for her children, but was awaiting acceptance of her application. The childcare expense had been temporarily suspended when the debtor’s childcare facility closed due to the coronavirus pandemic.

In overruling the Trustee’s objection, the Court applied the Supreme Court’s forward looking approach for evaluating “projected disposable income” under §1325(b) as set forth in Hamilton v. Lanning, 560 U.S. 505 (2010). In so doing, the Court found both the health insurance and childcare expenses to be both “reasonably necessary” expenses and expenses that were “known or virtually certain” to be expended at the time of confirmation. 

19-40641 View

In re: Keith Allen Pike

Summary: This case examines the effect of post-discharge conversion on unsecured claims. The debtor initially filed his case under Chapter 7 and received a discharge. After the entry of the discharge, the Trustee discovered previously undisclosed assets. Instead of turning the assets over to the Chapter 7 estate, the debtor converted his case to a proceeding under Chapter 13. He then objected to the unsecured claims of creditor Crown Asset Management LLC arguing that because creditor had failed to file claims in the Chapter 7, its claims were essentially extinguished upon the entry of the Chapter 7 discharge order and, therefore, were not entitled to payment in the Chapter 13.

In overruling the debtor’s objections to creditor’s claims, the Court explained that a discharge only eliminates a debtor’s personal liability for his debts--it does not eliminate the debts themselves. Upon conversion, a debtor’s debts remain obligations of the Chapter 13 estate. This approach not only reconciles a debtor’s right to convert with the discharge provisions of 11 U.S.C. § 524(a), but also deters unscrupulous debtors from concealing assets from the Chapter 7 Trustee and then “extinguishing” their debts in a subsequent Chapter 13 through conversion.

17-40736 View

In re: Katrina M Bridges

Summary: The question presented was whether the Debtor, whose Chapter 13 Plan was not yet confirmed, could avail herself of the newly enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which amended §1329 of the Bankruptcy Code to allow debtors to extend the term of their confirmed plans beyond five years. The Debtor filed a Chapter 13 Petition on July 30, 2019. The Debtor’s attempts to confirm a Chapter 13 Plan were met by objections from the Trustee that the Plan did not provide sufficient funding to complete within five years. On April 30, 2020, the Court held a hearing on the Trustee’s Objection to the Debtor’s Second Amended Plan. Debtor’s counsel argued that the Court should allow the Debtor to extend the term of her Plan beyond five years pursuant to the CARES Act, which had become effective on March 27, 2020. The CARES Act amended §1329 of the Bankruptcy Code, titled “Modification of plan after confirmation”, to allow certain debtors suffering hardships due to the corona virus pandemic to modify their confirmed Chapter 13 plans to extend the term of those plans to a period not more than seven years. The Court held that the plain language of the CARES Act limits that provision to debtors whose plans were already confirmed prior to the March 27, 2020, the effective date of the CARES Act. The Debtor’s Plan had not yet been confirmed as of March 27, 2020. Therefore, the Debtor could not take advantage of the CARES Act to extend the term of her Chapter 13 Plan beyond five years.

19-31012 View

In re: Bruegge v. Aker

Summary: At issue was whether the Plaintiff could avoid and recover two preferential transfers and a fraudulent conveyance under 11 U.S.C § 544, 547, 548, and 550. Plaintiff also sought the disallowance of any of the Defendant’s claims under U.S.C. § 502(d) and (j). The issues revolved around a two-part agreement involving the purchase of Defendant’s shares in the Debtor and the Defendant’s continued employment with the Debtor. Defendant recieved $200,000 for the shares and two payments totaling $24,248.82 under the employment agreement before the Debtor filed for bankruptcy on April 24, 2015. Plaintiff alleged that the $200,000 was avoidable and recoverable as a fraudulent conveyance and that the two payments of $24,248.82 were avoidable and recoverable as preferential transfers. Defendant argued that the preferential transfers were not avoidable because he received “new value” for the payments and that he was not the initial transferee or an intermediate transferee who did not take for value, in good faith, and without knowledge of the voidability.

The Court determined that both the preferential transfer and the fraudulent conveyance were avoidable but only the preferential transfers were recoverable. The Court also found that the Defendant’s claims were disallowed until the payment of the preferential transfers were made to the Plaintiff.

17-06009 View

In re: William Todd Steiner

Summary: This case presented the issue of whether, for purposes of a motion to dismiss pursuant to 11 U.S.C. § 707(b)(1), a debtor’s student loan obligations must be characterized as “consumer debt.”  The United States Trustee sought to dismiss or convert the debtor’s case, asserting that the debtor’s debts were comprised primarily of consumer debt and that the presumption of abuse as defined by § 707(b) had not been sufficiently rebutted by the debtor.  Alternatively, the United States Trustee argued that even if there was no presumption of abuse, the case should still be dismissed as an abusive filing pursuant to 11 U.S.C. § 707(b)(3).  In response, the debtor argued that because his student loans were business debts, his total consumer debt constituted less than 50% of his total debt and, therefore, § 707(b)(1) was inapplicable.

Although the Court granted the United States Trustee’s motion, it refused to adopt a per se rule that student loans always constitute consumer debt.  Similarly, the Court also rejected the pure “profit motive” approach advocated by the debtor. Instead, the Court determined that the appropriate way to determine whether a student loan constitutes consumer debt is to consider the totality of the circumstances on a case by case basis.  The Court opined that while a debtor’s motive for incurring a student loan may be a relevant consideration, the purpose of the loan should be determinative.  Here, although the debtor attended college, he never completed a degree.  He was not asked to attend college by an employer and there was no indication in the record as to what the debtor studied while he attended college.  Based on the scant facts provided, the Court was unable to discern any business purpose for incurring the loans. Consequently, the Court ruled that the student loans in this case should be characterized as consumer debt.

19-60062 View

In re: Jennifer Dawn McKay

Summary: The debtor’s first amended plan was confirmed on November 18, 2018, providing a pool to general unsecured creditors in the amount of $105,520.80. At all times the debtor was considered an above-median debtor. Eighteen days after confirmation, the debtor filed a third amended plan and subsequently, a fourth amended plan, which reduced the pool to unsecured creditors from $105,520.80 to $0, despite a minimal decrease in income on the amended schedules. The trustee objected to this plan on the basis of bad faith. The debtor’s position was that post confirmation, disposable income would be calculated using actual expenses on schedules I and J for a below median debtor, rather than utilizing IRS standard expenses on form 122C-2 for an above median debtor. The court sustained the Trustee’s objection, finding that the fourth amended plan was not filed in good faith. The Court determined that the debtor’s delayed amendment of her plan and schedules until after confirmation was an attempt to deviate from the standard means test on form 122C-2, equating to an unfair manipulation of the Bankruptcy Code.

18-31088 View

In re: Chad Robert Bullock

Summary: On March 1, 2019, the Court entered an order requiring the debtor to file an amended plan to provide for one-hundred percent repayment to his unsecured creditors. The amendment was precipitated by the debtor’s post-petition receipt of a substantial worker’s compensation settlement which he failed to immediately disclose. The debtor appealed and then sought a stay of the order—without bond—pending appeal. The Court denied the debtor’s motion finding that he had failed to establish (1) that he would likely succeed on appeal; (2) that he would suffer irreparable harm if a stay was not granted; (3) that other parties, particularly unsecured creditors would not be harmed; and (4) that imposing a stay would be in the public interest. In reaching its conclusion, the Court reiterated that plan modification is permitted where a debtor experiences a post-confirmation increase in income and, further, that this income may be considered in calculating a debtor’s disposable income—even if the income is otherwise exempt.

14-40875 View

In re: Richard Jones

Summary: Prior to filing, debtor withdrew $50,000 from his IRA and deposited $49,000.00 of the funds into his personal checking account.  Less than 60 days later, debtor purchased a $20,000 cashier’s check from his bank and deposited those funds into the same IRA.  Approximately four months later, debtor filed a chapter 7 bankruptcy petition.  Debtor claimed a $40,000.00 exemption in the IRA under 735 ILCS § 5/12-1006.  The trustee objected on the basis that $20,000 of the funds lost their exempt status once they were withdrawn from the IRA.  Debtor countered that the funds were reinvested into the same IRA within the 60-day rollover time frame allowed by the Internal Revenue Service regulations, and that the funds were in a protected retirement account on the date of filing bankruptcy.   The trustee did not raise any allegations of fraud nor did he argue that debtor improperly converted nonexempt property into exempt property. The Court overruled the trustee’s objection, finding that he failed to meet his burden of proving that the exemption was improperly claimed.

18-31532 View