Central District Consumer Bankruptcy Attorney's Association

Beezley& Nielson are"no asset" no bar date Chapter7 cases.
Not sure whether verbally renouncing a personal guarantee has any legal affect, probably not.
1328 is limited to debts provided for in the plan or disallowed under 502. claimsand should haverequestedcourt to estimationcontingent claimunder 502(c).
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
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________________________________
To: cdcbaa@yahoogroups.com
Sent: Tue, May 11, 2010 2:07:28 PM
Subject: [cdcbaa] Personal Guaranty - Discharge - Case Reopening
Facts: Before client files bankruptcy he is an owner of a family owned business in which he signed personal guaranties. Prior to filing a chapter 13 he sells off his shares in the family business, but takes no written action to give notice to the guarantees that he renounces the guaranty or that he longer has an ownership interest. He does so verbally. There are no claims against him at the time he files his bankruptcy case. He is aware that the creditors/guarantee s continue to do business with the family owned business. Client files and receives a discharge from 100% chapter 13 plan. Case closed. Post discharge and post closure the family owned business is unable to pay the creditors, including those vendors that are guarantees. Suit is brought, and notice is given to each of the above facts. State court counsel proceeds. Beezely letter sent, although it is a chapter 13, but nevertheless a discharge was entered on debt incurred at the time of filing.
Issue: Where there is evidence that vendors knew of the above facts, especially client's separation from family owned business and his bankruptcy: (1) is there cause to reopen the chapter 13 to list the debt; (2) where there was no debt, would discharge discharge guaranty obligation; (3) are there grounds for sanctions for violation of discharge injunction after creditors are notified of bankruptcy; and (4) where family owned business files, are there claims for indemnification?
Research: No case has been found on point for a chapter 13 case. Beezely and progeny control in a chapter 7 case.
Thanks. Lou Esbin
Beezley & Nielson are "no asset" no bar date Chapter 7 cases.

Not sure whether verbally renouncing a personal guarantee has any legal affect, probably not.

1328 is limited to debts provided for in the plan or disallowed under 502. The debtor had duty to schedule for notice of bar date for claims and should have requested court to estimation contingent claim under 502(c). Peter M. Lively, JD/MBALaw Office of Peter M. Lively * Personal Financial Law Center I11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462 A-Bankruptcy-Attorney.comPersonal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: californiadebtreliefagency <Esbinlaw@sbcglobal.net>To: cdcbaa@yahoogroups.comSent: Tue, May 11, 2010 2:07:28 PMSubject: [cdcbaa] Personal Guaranty - Discharge - Case Reopening
Facts: Before client files bankruptcy he is an owner of a family owned business in which he signed personal guaranties. Prior to filing a chapter 13 he sells off his shares in the family business, but takes no written action to give notice to the guarantees that he renounces the guaranty or that he longer has an ownership interest. He does so verbally. There are no claims against him at the time he files his bankruptcy case. He is aware that the creditors/guarantee s continue to do business with the family owned business. Client files and receives a discharge from 100% chapter 13 plan. Case closed. Post discharge and post closure the family owned business is unable to pay the creditors, including those vendors that are guarantees. Suit is brought, and notice is given to each of the above facts. State court counsel proceeds. Beezely letter sent, although it is a chapter 13, but nevertheless a discharge was entered on debt incurred at the time of
filing.Issue: Where there is evidence that vendors knew of the above facts, especially client's separation from family owned business and his bankruptcy: (1) is there cause to reopen the chapter 13 to list the debt; (2) where there was no debt, would discharge discharge guaranty obligation; (3) are there grounds for sanctions for violation of discharge injunction after creditors are notified of bankruptcy; and (4) where family owned business files, are there claims for indemnification?Research: No case has been found on point for a chapter 13 case. Beezely and progeny control in a chapter 7 case.Thanks. Lou Esbin

The post was migrated from Yahoo.

Lou:
Beezley wouldn't apply in Chapter 13 cases since it is limited to no-asset Chapter 7 cases where the issue is "no harm-no foul" because if the creditor had known about the case it wouldn't have mattered since there were no assets to be distributed which it could have shared in. In a Chapter 13 case, a creditor without notice would not have had the opportunity to file a proof of claim - so Section 523(a)(3) (A) would be on point to deny discharge. But now you have a factual question under 523(a)(3)(A) of whether the creditors had "notice or actual knowledge of the case in time for such timely filing [of a proof of claim]". If so, I believe the debt would be discharged without the need to reopen the case.
Jim
James R. Selth
Weintraub & Selth, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF THE TRANSMISSION AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN-E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.

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Facts: Before client files bankruptcy he is an owner of a family owned business in which he signed personal guaranties. Prior to filing a chapter 13 he sells off his shares in the family business, but takes no written action to give notice to the guarantees that he renounces the guaranty or that he longer has an ownership interest. He does so verbally. There are no claims against him at the time he files his bankruptcy case. He is aware that the creditors/guarantees continue to do business with the family owned business. Client files and receives a discharge from 100% chapter 13 plan. Case closed. Post discharge and post closure the family owned business is unable to pay the creditors, including those vendors that are guarantees. Suit is brought, and notice is given to each of the above facts. State court counsel proceeds. Beezely letter sent, although it is a chapter 13, but nevertheless a discharge was entered on debt incurred at the time of filing.
Issue: Where there is evidence that vendors knew of the above facts, especially client's separation from family owned business and his bankruptcy: (1) is there cause to reopen the chapter 13 to list the debt; (2) where there was no debt, would discharge discharge guaranty obligation; (3) are there grounds for sanctions for violation of discharge injunction after creditors are notified of bankruptcy; and (4) where family owned business files, are there claims for indemnification?
Research: No case has been found on point for a chapter 13 case. Beezely and progeny control in a chapter 7 case.
Thanks. Lou Esbin

The post was migrated from Yahoo.