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 descending Summary Case Number PDF

In re: Lisa and Daniel Garrett 17-40064

Summary: Creditor filed a motion to set off a potential award in debtors' favor in District Court litigation against creditor's claim in debtors' chapter 7 bankruptcy proceeding. Debtors objected on the basis that the creditor could not set off its potential debt to debtors against a debt that was discharged in bankruptcy. The Court held that debtors lacked standing to object. The Court further held that even assuming debtors had standing, setoff was appropriate. Debtors’ counter claims and third party claims in the District Court litigation became an asset of the bankruptcy estate, and the creditor had a right to set off its claim in the bankruptcy case against any recovery the estate might receive in the District Court litigation.

17-40064 View

In re: Tenholder et al v. United States of America, Internal Revenue Service

Summary: At issue was whether the Debtors’/Plaintiffs’ income tax debt for tax year 2011 was dischargeable under 11 U.S.C. § 507(a)(8), which provides that a tax for which a return is last due after three years before the date of the filing of a bankruptcy petition is dischargeable. However, located at the end of §507(a)(8) is the so called “flush language,” which tolls the three year period for any period during which a governmental unit is prohibited under applicable non-bankruptcy law from collecting a tax as a result of a request by the debtor for a hearing and an appeal of any collection action taken or proposed against the debtor, plus 90 days. Both parties were in agreement that if the three year period was tolled, then the debt was non-dischargeable. They also agreed on the opposite. The Debtors/Defendants requested a collection due process hearing pursuant to 26 U.S.C. § 6330 to determine their tax liability, which prohibited the Defendant from collecting this tax by levy during the pendency of the collection due process hearing. The Debtors/Plaintiffs argued that the Defendant must be completely prohibited from collecting the tax in order to invoke the “flush language” of § 507(a)(8). However, the Court held that the Defendant’s inability to collect the tax by levy was enough to toll the three year time period for determining dischargeability, and therefore the debt to the Internal Revenue Service for the Debtors’/Plaintiffs’ 2011 income tax is non-dischargeable.

17-03021 View

In re: Delagrange v. TrustBank

Summary: A chapter 7 pro se debtor filed a complaint against a mortgage creditor seeking to obtain clear title to his residence. The creditor had obtained a foreclosure judgment on the property prior to the filing of the bankruptcy case. Debtor alleged that the foreclosure judgment was null and void because it was obtained without due process. Creditor filed a motion for summary judgment. The Court found that under the Rooker-Feldman doctrine, it had no authority to review the state court judgment. Summary judgment was granted and the complaint was dismissed.

17-04016 View

In re: Michael S and Alicia F Eubanks

Summary: Chapter 13 debtors filed a five-year plan that proposed to pay general unsecured creditors 100% of their claims.  Trustee objected to confirmation because the plan payments did not include all of the debtors’ disposable income.  The trustee argued that for the plan to be confirmed, the debtors must agree that in post confirmation modifications of the plan, they would provide a minimum pool to unsecured creditors in an amount equal to the difference between their disposable income at confirmation and their actual plan payment, multiplied by the number of months that passed as of the effective date of the modification.   The trustee argued that the court could require such a pledge pursuant to the good faith provision of §1325(a)(3), or through the equitable powers granted to bankruptcy courts by §105(a).  The trustee also argued that if debtors refused such a pledge, then their plan payment must be increased to include the full amount of their disposable income.  Finally, the trustee argued that if debtors would not contribute all disposable income to their plan, general unsecured creditors would be entitled to interest on their allowed claims.   The court found that the plan complied with the requirements set forth in §1325(b)(1), that the plan was filed in good faith and that the debtors were not required to pay interest under §1325(b)(1)(A).

17-40227 View

In re: First Financial Bank, N.A. et al v. Blake et al

Summary: In this chapter 12 case, First Financial Bank asserted a secured interest in debtors’ crops, farm equipment and general intangibles, including payments under the Agricultural Risk Coverage Program (ARC). The Bank filed a complaint to determine the validity, priority and extent of its lien in the ARC payments. Debtors filed a counterclaim seeking to avoid any lien asserted by the Bank as a preference under 11 U.S.C. §547. The sole issue before the court was this: When did the debtors acquire rights in the ARC payments to trigger a transfer as required by §547(e)(3)? The Court found that debtors acquired contractual rights to the 2015 and 2016 crop year payments on the date that they enrolled in the ARC program for those years, which was well outside of the 90-day preference period. Judgment was entered in favor of the Bank and the debtors’ counterclaim was denied.

17-06006 View

In re: Karl A and Jenna K Blake 16-60425

Summary: Creditors First Financial Bank and Bunker Hill Supply Company objected to the debtors’ amended Chapter 12 plan on the grounds that it failed to comply with the confirmation requirements set forth in 11 U.S.C. §§ 1225(a)(4), (5) and (6). After hearing extensive testimony regarding the debtors’ projected income, projected expenses and personal property/equipment values, the Court concluded that the plan could not be confirmed. The plan failed to pay secured creditor First Financial the present value of its claim in violation of § 1225(a)(5)(B). It also failed to satisfy the “best interests of creditors” test of § 1225(a)(4) as unsecured creditors were not being paid the amount that they would have otherwise received in a Chapter 7 liquidation. Finally, because the debtors’ debt service payments and other expenses greatly exceeded their income, the Court found that they had insufficient cash flow to “make all of the payments under the plan and comply with the plan” as required by § 1225(a)(6).

16-60425 View

In re: Gary E Jones 17-40497

Summary: This matter was before the Court upon the Trustee’s Objection to Confirmation of the Debtor’s Second Amended Chapter 13 Plan. The Debtor’s plan proposed to pay $3,000.00 in attorney fees, the Trustee’s fees, and $550.00 to the Debtor’s general unsecured creditors over a forty month duration. The Debtor was ineligible to file this case under Chapter 7 due to a Chapter 7 case filed seven years prior. The Trustee asserted that the plan was not filed in good faith as a result of the proposal to pay $3,000.00 in attorney fees and only $550.00 to general unsecured creditors. The Debtor was judgment proof, but chose to file this Chapter 13 case in an effort to avoid the time and expense of defending multiple collections actions in state court. Whether a Chapter 13 Plan is proposed in good faith is a determination made on a case by case basis. The Trustee’s Objection was overruled. Given the facts of this case, the Court held that if the Debtor and his attorney were complying with the provisions of the Bankruptcy Code and Rules and holdings of the Bankruptcy Court for the Southern District of Illinois, the Court could not find bad faith.

17-40497 View

In re: Connie L Melching 15-31947

Summary: The issue in this case was whether a chapter 7 debtor may claim two separate exemptions, each in the amount of $15,000.00, for payment received on account of personal bodily injury.  Debtor sought to exempt $15,000.00 for personal bodily injury arising from a pre-petition automobile accident, as well as $15,000.00 for injuries related to a pre-petition products liability claim.  The Court held that under the Illinois exemption statute governing payment for personal bodily injury, Debtor was limited to a maximum exemption of $15,000.00.

15-31947 View

In re: Villa Marie Winery 18-30163

Summary: In this chapter 11 proceeding, the primary secured creditor, First Mid-Illinois Bank and Trust, moved to enforce a settlement agreement with the Debtors.  According to the Bank, the settlement terms were fully set forth in a Forbearance Agreement that was attached to an email sent by Bank’s counsel to Debtors’ counsel.  The Bank contended that the Agreement was confirmed and accepted by Debtors’ counsel in a later email.  Debtors disputed the existence of a valid settlement agreement, arguing in particular that the Debtors never agreed to certain release language contained in the Forbearance Agreement.  The Court found that the Bank failed to prove that the Debtors expressly authorized their attorney to agree to the release language.  The motion to enforce settlement was denied.

18-30163 View

In re: Simon v. Finley, III et al

Summary: The debtors’ chapter 13 confirmed plan provided that debtors would make direct payments to their mortgage creditor. In their motion for a chapter 13 discharge under § 1328(a), the debtors represented that they had made all payments required by the plan. After the motion was filed, but before entry of the discharge order, the mortgage creditor filed a response to the chapter 13 trustee’s Notice of Final Cure Payment. The creditor’s response indicated that the debtors were delinquent in post-petition mortgage payments in the amount of $70,869.24. No objections to the motion for discharge were filed and an order of discharge was entered. Approximately three weeks after entry of the discharge order, the trustee filed a complaint to revoke the debtors’ discharge under §1328(e) of the Bankruptcy Code. The complaint alleged that the debtors obtained their discharge by falsely and fraudulently stating (in their motion for discharge) that they had made all payments required by the plan. The debtors moved to dismiss the complaint for failure to state a claim on two grounds: (1) payments made directly to the mortgage creditor are not “payments under the plan,” and (2) the trustee had notice of their failure to make post-petition mortgage payments in plenty of time to file an objection to their motion for discharge. The court found that direct payments to the mortgage creditor were payments under the plan as contemplated by § 1328(a). The court further found that § 1328(e)(2) barred the trustee’s action to revoke debtors’ discharge because he had notice of their failure to make post-petition mortgage payments in ample time to object to their motion for discharge. The debtors’ motion to dismiss the complaint was granted.

18-04011 View