Flint Bankruptcy Lawyer posts on Bankruptcy and Divorce 810-235-1970

Types of Bankruptcy

There are   four different types of bankruptcy are available to individuals—namely Chapters 7, 11, 12, and 13.

Posted here by Flint Bankruptcy Attorney Terry Bankert 235-1970. See Http://www.attorneybankert.com
There are two ways a bankruptcy may be started,voluntarily and involuntarily—and both forms of commencement invoke the automatic stay. See 11 USC 362(a) discussed in §17.11. In a voluntary bankruptcy, the debtor files the bankruptcy petition. In an involuntary bankruptcy, the statutory number of creditors file the bankruptcy against the debtor under 11 USC 303. An involuntary case against an individual may only be commenced under Chapters 7 or 11 of the Bankruptcy Code. Only a debtor may voluntarily file a case under Chapters 12 and 13.

A brief overview of the attributes and eligibility requirements of these four chapters is as follows:

Chapter 7—Liquidation: In this bankruptcy proceeding, the debtor turns over all nonexempt property to the Chapter 7 trustee, whose job it is to sell or liquidate the property and distribute the proceeds to creditors pro rata, usually in a one-time payment once all of the assets have been administered. The Chapter 7 trustee will also investigate the debtor’s financial affairs to determine the location of any nonexempt property (including causes of action) that can be turned into cash for distribution to creditors. The debtor will be released (i.e., discharged) from the unpaid portion of most types of debts. However, DSOs (defined in 11 USC 101(14A)) and debts owing to a spouse, former spouse, or child of the debtor and arising out of a divorce or separation are nondischargeable. See 11 USC 523(a)(5), (15). See §§17.16 and 17.17. The Chapter 7 trustee is always appointed by the U.S. trustee and is usually a member of a panel of trustees.
Chapter 11—Reorganization: The purpose of this bankruptcy proceeding is to allow the debtor a breathing spell from creditors and enable the debtor to reorganize his or her financial affairs. The debtor retains control of all of his or her property unless a Chapter 11 trustee is appointed for cause. Chapter 11 is the most expensive and complicated type of bankruptcy and can last for several years. The debtor proposes a plan of reorganization that is subject to the vote of the creditors. Individuals with debts exceeding the dollar limits in 11 USC 109(e) are eligible to file Chapter 11.
Chapter 12—Family farmer bankruptcy: This type of bankruptcy may be filed only voluntarily and only by a family farmer with regular annual income. This proceeding is similar to a Chapter 13, described below, but the debt limits in Chapter 13 do not apply to Chapter 12.

Chapter 13—Adjustment of debts: This type of bankruptcy may be filed only voluntarily and only by individuals with regular income (filing with or without a spouse) and with debts that fall within the statutory limits for secured debt and unsecured debt. Those debt limits are adjusted at three-year intervals pursuant to 11 USC 104. As of July 2010, the most recent adjustment was effective April 1, 2010, and it provides that only an individual with regular income and unsecured debts of less than $336,900 and secured debts of less than $1,010,650 is eligible to be a debtor under Chapter 13. Soon after a Chapter 13 case starts, the debtor must propose a plan but, unlike a Chapter 11, the creditors of a Chapter 13 debtor do not get the opportunity to vote on it. Instead, the bankruptcy court and the Chapter 13 trustee review the plan and must approve it as fitting within the strict requirements for a plan under Chapter 13. See 11 USC 1325. In the Chapter 13 plan, the debtor commits to pay the Chapter 13 trustee an appropriate part of his or her income or other property for a period of time (generally three to five years). A Chapter 13 trustee is appointed in each Chapter 13 case to distribute the debtor’s payments to the creditors in accordance with a confirmed Chapter 13 plan. Once the debtor has completed all payments due under a confirmed Chapter 13 plan, the debtor receives a broader discharge than individuals receive in a Chapter 7 liquidation. Priority debts must be paid in full, see 11 USC 1322(a)(2), and, pursuant to 11 USC 507(a)(1), a debt for a DSO is a priority unsecured claim. See §§17.16 and 17.17.

The main reason why an individual files bankruptcy is to try to secure a discharge from his or her debts. 11 USC 727 provides that all individual debtors are eligible to receive a discharge unless he or she has committed one of the “bad acts” described in 11 USC 727. However, even if a debtor is entitled to a discharge, 11 USC 523 provides that certain types of debt are nondischargeable. 11 USC 523 represents a legislative decision that some debts (including DSOs and other debts arising out of divorce or separation proceedings) must be paid even by a debtor who has otherwise been discharged of his or her other obligations.

As one of several incentives in the Bankruptcy Code to encourage debtors to elect Chapter 13 rather than Chapter 7 bankruptcy, Congress gives Chapter 13 debtors who fully comply with their plans a discharge of a wider variety of debts. See 11 USC 1328(a). Chapter 13 debtors who do not complete their plans (due to circumstances not of their own making) might get a hardship discharge under 11 USC 1328(b), which is the same discharge that is given to debtors in Chapters 7 or 11. See §17.14.

Michigan Family Law ch 17 (Hon. Marilyn J. Kelly et al eds, ICLE 7th ed 2011), at
http://www.icle.org/modules/books/chapter.aspx/?lib=family&book=2011553510&chapter=17

(last updated 12/16/2011).

FLINT BANKRUPTCY ATTORNEY 235-1970 TERRY BANKERT

FLINT BANKRUPTCY ATTORNEY TERRY BANKERT (810) 235-1970

III. CONCLUSION

The facts of this case indicate that (1) Debtor enjoys a stable source of future income, (2) He is eligible for Chapter 13 relief, and (3) he is capable of significantly reducing his expenses without depriving himself and his dependents of food, clothing, shelter, or other necessities. While Debtor’s apparent desire to continue to support current or prior family members beyond
his legal obligation to do so is commendable, it should not be at his creditors’ expense. For the foregoing reasons, the UST’s Motion to Dismiss is granted unless, within 20 days from the entry of the order effectuating this Opinion, the Debtor converts to a Chapter 13 proceeding. The UST shall present an appropriate order.

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OPINION GRANTING UNITED STATES TRUSTEE’S MOTION
TO DISMISS CASE PURSUANT TO 11 U.S.C. § 707(b)(3)

The matter before the Court is the United States Trustee’s Motion to Dismiss Chapter 7 Case Under 11 U.S.C. § 707(b)(3) (Docket No. 13). The Court held a hearing on the matter and requested post-hearing briefs. The Court also requested additional information from the Debtor regarding the end date of certain liabilities. Those materials have been submitted and reviewed
by the Court, and this is the Court’s opinion.

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I. BACKGROUND

David Difazio (“Debtor”) filed his Chapter 7 bankruptcy petition on November 12, 2010.
He is 50 years old and works as a pharmacist at Walgreens. He has held that position forapproximately eleven years and earns approximately $128,205 annually. He is divorced and has three sons, ages 21, 23, and 24. Debtor’s ex-wife and two of his sons live with him in a home owned by his former mother-in-law. His 23 year old son lives in Chicago and is recently employed. His 24 year old son, who lives with him, recently returned to work in June, after
being laid off at the end of last year. His 21 year old son, who lives with him, is a student and is unemployed.

Debtor and his ex-wife divorced in February 2009.

Pursuant to the Judgment of Divorce, Debtor is required to pay alimony in the amount of $1,200 per month for 48 months.
That 48-month obligation began in September 2009 (the selling of their marital home was a condition precedent to the start of the alimony obligation), and that obligation has approximately 28 months remaining.

Debtor testified that, in lieu of paying his ex-wife $1,200 per month, he
and his ex-wife came to an agreement whereby they would live in the same residence and he would pay certain monthly household expenses on her behalf, as well as payments for certain expenses for their sons.

At this time, Debtor pays the following expenses for the benefit of
himself, his ex-wife, and his children, to wit: mortgage ($1,149); utilities ($313); water and sewer ($55); telephone ($275); cable/internet ($230); a car payments for two vehicles, both of which are owned by Debtor’s mother and which Debtor and his son are given permission to drive ($250 and $320); a payment for a Harley Davidson motorcycle ($326); insurance for the
vehicles owned by Debtor’s mother, Debtor’s ex-wife’s vehicle, and the motorcycle ($181, $213, and $56.16); student loan payment for his son ($150); and a “payment for dependent,” which is money given to his son currently living in Chicago ($110).1 Debtor’s ongoing debts include:

(1) tax debt owed to the Internal Revenue Service in the amount of approximately $160,000; Debtor currently pays $1,424 per month (that payment increased from $856 in September 2011) and he will likely be required to pay that obligation for the remainder of his working career; Debtor’s ex-wife does not contribute to the repayment of this debt;

(2) income tax debt owed to the State of Michigan in the amount of $3,042, with estimated interest and penalties of 31-35%; Debtor currently pays $190 per month and that obligation is estimated to be paid off between 1.9 – 2.4 years; Debtor’s ex-wife does not contribute to the repayment of this debt; and

(3) stock loan plan debt in the amount of $3,381.51; Debtor currently pays
$247.78 per month and that obligation is estimated to be paid off in October 2012.
In addition to those continuing debt payments, Debtor contributes $213.67 per month to his 401K, which has a balance of approximately $29,000.

For Help-Bankruptcy, 810-235-1970, Flint, Bay CIty, Saginaw, Owosso, and Burton. Genesee Flint Lawyer / Attorney also Family Law and Divorce
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II. DISCUSSION

Section 707(b)(1) provides, in part,
After notice and a hearing, the court, on its own motion or on a motion by the
United States trustee, trustee (or bankruptcy administrator, if any), or any party in interest, may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts, or, with the debtor’s consent, convert such a case to a case under chapter 11 or 13 of this title, if it finds that the granting of relief would be an abuse of the provisions of this chapter.

FOOTNOTE 1 These enumerated payments consist of all of the regular household expenses for himself and his ex-wife and his
two adult children who are living with him. It is clear, however, that Debtor would be required to pay most of those expenses, such as mortgage/rent, utilities, and food if he were living on his own. Accordingly, the Court will only
attribute a portion of those total expenses as being payments made for his wife’s benefit in exchange for the alimony payments.

In determining whether this case constitutes an “abuse” under § 707(b)(3), the Court must examine the totality of the circumstances and determine whether the Debtor is “honest” and “needy”. In re Krohn, 886 F.2d 123, 126 (6th Cir. 1989); In re Behlke, 358 F.3d 429, 434 (6thCir. 2004). “’[H]onest,’ in the sense that [Debtor’s] relationship with his [or her] creditors has
been marked by essentially honorable and undeceptive dealings, and […] ‘needy’ in the sense that his [or her] financial predicament warrants the discharge of his [or her] debts in exchange for liquidation of his [or her] assets.” Krohn, 886 F.2d at 126.

There is no allegation or indication that the Debtor has been anything other than honest in his relationship with his creditors, and therefore the inquiry is limited solely to whether the Debtor is “needy” of a chapter 7 discharge. In making determinations as to neediness, courts have looked to the following non-exclusive factors:

(a) whether the Debtor has the ability to repay his debts out of future earnings;

(b)whether the Debtor enjoys a stable source of future income;

 (c) whether the  Debtor is eligible for chapter 13 relief;

(d) whether there are state remedies with the potential to ease the Debtor’s financial predicament;

 (e) whether relief may be obtained through private negotiations with creditors; and

(f) whether expenses can  be reduced significantly without depriving the Debtor of adequate food, clothing,shelter and other necessities.
In re Beckerman, 381 B.R. at 845 (citing In re Krohn, 886 F. 2d at 126-27).

In this case, Debtor enjoys a stable source of future income and is eligible for Chapter 13 relief. The factor most applicable to the Court’s analysis in this particular case is (f), i.e.: whether the Debtor’s expenses can be significantly reduced without depriving him or his dependents with adequate food, clothing, shelter, and other necessities.
The UST argues that Debtor can easily reduce his monthly expenses without depriving himself or his dependents of adequate shelter, food, or clothing and that he has the ability to pay his debts out of future earnings in a Chapter 13 case. Specifically, the UST argues that Debtor could immediately trim his budget by $1,467.34 by: discontinuing his 401K contribution for the
period of a Chapter 13 plan ($213.67), eliminating the payments for his sons’ cell phones and  eliminating premium television channels ($150), eliminating the payments for his son’s vehicle and insurance ($411.50), eliminating the motorcycle payment and insurance ($382.16), and
eliminating the payments for his son’s student loan and the “payment to dependent” ($260). The UST further argues that when some of the above listed ongoing debts are paid off, Debtor will
have additional income he can contribute to a Chapter 13 plan to pay unsecured creditors.
Debtor argues that, given his ongoing support obligations for his ex-wife and his significant tax debt, even if he could reduce his monthly expenses, he would not have sufficient income to contribute toward a Chapter 13 plan.

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B. Payments in Lieu of Alimony Obligation

As noted, Debtor has a monthly alimony obligation to his ex-wife. As noted, he and his ex-wife came to an agreement whereby Debtor would pay the ex-wife’s portion of the mortgage payment, her car insurance, household utilities, and certain expenses for their sons instead of paying the monthly alimony obligation to her. Debtor argues that he is currently paying the
following expenses in lieu of that alimony obligation:

(1) his ex-wife’s share of the mortgage
payment ($575), automobile insurance for his wife’s vehicle ($106), a car payment for his son’s vehicle ($306), student loan payment for the eldest son ($150), and a “payment for dependent” ($110). Those expenses add up to $1,247.

 

 However, Debtor is clearly paying expenses above  and beyond those amounts on his ex-wife’s behalf. Specifically, he is also paying $313 for
utilities; $55 for water and sewer; $230 for cable/internet; and $298.76 for his ex-wife’s insurance expenses. Taking into consideration the portion of those expenses attributable to Debtor’s ex-wife, it appears that he is paying at least an additional $598 per month for his exwife’s expenses.

 

It is also unclear whether the $1,100 monthly food expense listed on Debtor’s
Schedule J includes food expenses for his ex-wife. It is clear in this case that Debtor is paying much more than $1,200 on his ex-wife’s behalf on a monthly basis. For that reason, the Court will consider the car payment for his son’s vehicle, student loan payment for his other son, and
the “payment for dependent” as being separate from the alimony obligation.

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C. Reduction of Expenses
A review of Debtor’s schedules show that his expenses are somewhat excessive and additional belt tightening is not out of question. To be sure, some expenses are what they are in no small part because he is financially supporting his ex-wife and three adult children. Two of his adult children are working and are able to either support themselves or to contribute to the household expenses or to their own expenses. See In re Beckerman, 381 B.R. at 852 (citing In re Siemen, 294 B.R. 276, 279 (Bankr. E.D. Mich. 2003). Further, Debtor’s payment of expenses for his ex-wife is clearly in significant excess of his $1,200 monthly alimony obligation and thatexcess is not likely legally required. Debtor’s expenses can clearly be reduced by a minimum of:
$150 for cable/internet/phones, $411.50 for the payments for his son’s vehicle and insurance,$382.16 for the motorcycle payment and insurance, and $260 for the payments for his son’sstudent loan and the “payment to dependent.” Eliminating or reducing those expenses alone adds up to $1,203.66. Adding in Debtor’s monthly net income of $159.80, Debtor could pay a
total of $1,363.46 per month to his unsecured creditors in a Chapter 13 plan.

Even taking into consideration the recent increase in Debtor’s tax obligation, from $856 to $1,424, Debtor could  make a significant monthly payment toward a Chapter 13 plan. Further, the amount Debtor can
contribute to a Chapter 13 plan would at some point increase as the Michigan tax debt, alimony obligation (which will end in September 2013), and stock loan plan debt are paid off during the  period of a five year plan.

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UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION – DETROIT
In re:
Case No. 10-74441
David M. Difazio, Chapter 7
Hon. Walter Shapero
Debtor.
___________________________________/
OPINION GRANTING UNITED STATES TRUSTEE’S MOTION
TO DISMISS CASE PURSUANT TO 11 U.S.C. § 707(b)(3)

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Posted Here by Terry Bankert www.attorneybankert.com

 

BAY CITY BANKRUTPCY DEBTORS WITH THE MEANS MUST FILE CHAPTER 13

Did you know that Congress in 2005 legislated that higher income people with primarily consumer debts should file a Bay City Bankruptcy in the Chapter 13 when possible. The Bankruptcy Court will look to see is their income and expenses give them the means to repay some of their debt.

IS YOUR CASE IN THE EASTERN DISTRICT OF MICHIGAN BANKRUPTCY COURT? BANKRUPTCY FLINT / BAY CITY ,ATTORNEY POSTING BY Flint / Bay City Bankruptcy Attorney Terry R. Bankert 810-235-1970.

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BANKRUPTCY DEBTOR LOST ATTEMPT TO KEEP AUTOMATIC STAY

FLINT BANKRUPTCY ATTORNEY POSTS ORDER DENYING MOTION FOR RECONSIDERATION OF ORDER DENYING DEBTOR’S MOTION TO ENFORCE THE AUTOMATIC STAY

Flint Bankruptcy Lawyer Terry R. Bankert 810-235-1970 presents  a recent bankrutpcy opinion.  Bankerts comments are CAP headlines or cited [trb]. This bankruptcy issue presented in SEO style.

DEBTOR WANTS  BANKRUPTCY AUTOMATIC STAY TO STOP A DOMESTIC  ORDER
On January 28, 2011, the Debtor filed this Chapter 13 case. Early in the case, the Debtor
filed a motion to enforce the automatic stay. The motion alleged that the Debtor and Antonietta DiNardo were parties to a child custody dispute in the Wayne County Circuit Court, and that the Wayne County Circuit Court had entered an order on February 14, 2011 after the Debtor’s bankruptcy case was filed.

_________________________________/

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION ,In re: Chapter 13,Patrick A. Rugiero, Case No. 11-42088-PJS
Debtor. Hon. Phillip J. Shefferly,Signed on March 28, 2011

_________________________________/

THE DOMESTIC ORDER CONCERNED ATTORNEY FEES
That order determined that attorney fees that were previously awarded
by the Wayne County Circuit Court against the Debtor and in favor of DiNardo constituted a non-dischargeable debt in the Debtor’s bankruptcy case under § 523(a)(5) of the Bankruptcy Code.

DEBTOR WANTS STAY ENFORCED
The Debtor’s motion requested that the Court find that the order entered by the Wayne County Circuit Court on February 14, 2011 violated the automatic stay of § 362(a) of the Bankruptcy Code and, therefore, must be voided. DiNardo responded by asserting, inter alia, that an exception to the automatic stay contained in § 362(b)(2)(A)(ii) of the Bankruptcy Code applies because the proceeding in the Wayne County Circuit Court is a civil action or proceeding for the establishment or modification of an order for a domestic support obligation. DiNardo further argued that because this exception to the automatic stay applies, the Wayne County Circuit Court was free to proceed to exercise its concurrent jurisdiction to determine that the attorney fees that it had previously
awarded are non-dischargeable in the Debtor’s bankruptcy case under § 523(a)(5) of the Bankruptcy Code. On March 4, 2011, the Court held a hearing and determined to deny the Debtor’s motion.
The Court explained its reasons on the record, including that it adopted the reasoning in Moxon v. Findling (In re Moxon), No. 05-74864, 2006 WL 846960 (E.D. Mich. Mar. 31, 2006). Basically, the Court agreed with DiNardo that the exception to the automatic stay under § 362(b)(2)(A)(ii) of the Bankruptcy Code applies in this case, and that the Wayne County Circuit Court properly exercised its concurrent jurisdiction to determine the awarded attorney fees to be non-dischargeable under § 523(a)(5) of the Bankruptcy Code. Finally, the Court concluded that the Rooker-Feldman doctrine prevents this Court from reviewing the decision of the Wayne County Circuit Court finding the debt to be non-dischargeable under § 523(a)(5) of the Bankruptcy Code. On March 4, 2011, the
Court entered an order denying the Debtor’s motion to enforce the automatic stay.
On March 18, 2011, the Debtor filed a motion for reconsideration.

The Debtor’s motion makes four arguments.

First, the Debtor argues that DiNardo does not have standing as a creditor
in the Debtor’s bankruptcy case because, the Debtor argues, the Wayne County Circuit Court directed the Debtor to pay the awarded attorney fees directly to DiNardo’s law firm, Jaffe, Raitt, Heuer & Weiss. However, a review of the Wayne County Circuit Court orders demonstrates that the Debtor is mistaken.

The May 24, 2010 order of the Wayne County Circuit Court plainly stated
that the Debtor must “pay an additional $20,000.00 of Defendant’s interim attorney fees . . . to the law firm of Jaffe, Raitt, Heuer & Weiss” (emphasis added). The November 30, 2010 order of the Wayne County Circuit Court again directed the Debtor to “pay the further amount of $80,000.00 to Defendant’s attorney for Defendant’s attorney fees and costs” (emphasis added). The February 14, 2011 order of the Wayne County Circuit Court, which held the attorney fees to be non-dischargeablein the Debtor’s bankruptcy case under § 523(a)(5) of the Bankruptcy Code, clearly described the
prior Wayne County Circuit Court orders as “awarding attorney fees to Defendant by Plaintiff” (emphasis added).

It is beyond dispute that the Wayne County Circuit Court awarded attorney fees
to DiNardo, even though the language of the orders may also have required the Debtor to make the payments directly to the law firm of Jaffe, Raitt, Heuer & Weiss for application to DiNardo’s attorney fees incurred with that law firm.

The Court rejects the Debtor’s argument that DiNardo lacks standing as a creditor in the Debtor’s bankruptcy case.
The Debtor’s second argument is that Judge Kathleen M. McCarthy, the Wayne County
Circuit Court judge presiding in the child custody action between DiNardo and the Debtor, should be disqualified from that action because of some perceived conflict.

The Debtor has already raised this argument unsuccessfully in the Wayne County Circuit Court. If the Debtor believes that the Wayne County Circuit Court’s decision to deny the motion to disqualify was made in error, the Debtor’s remedy is to appeal to the Michigan Court of Appeals, not to seek this Court’s review.

The Rooker-Feldman doctrine prevents this Court from reviewing that decision.
Third, the Debtor argues that the attorney fees awarded by the Wayne County Circuit Court are neither owed to DiNardo nor recoverable by DiNardo. This is an important issue because the exception to the automatic stay under § 362(b)(2)(A)(ii) of the Bankruptcy Code only applies to civil actions or proceedings for the establishment or modification of an order for domestic support obligations.

The Court explained on the record on March 4, 2011 why the Court views the orders
of the Wayne County Circuit Court as a domestic support obligation. The Court noted that a review of those orders shows that the attorney fees awarded are owed to and recoverable by DiNardo.

 This is an essential element of a domestic support obligation under § 101(14A)(A) of the Bankruptcy Code.

Similar to the Debtor’s argument that DiNardo lacks standing as a creditor in the Debtor’s
bankruptcy case, the Debtor now argues that the attorney fees awarded by the Wayne County Circuit Court are neither owed to nor recoverable by DiNardo.

Again, the Debtor is mistaken. The orders of the Wayne County Circuit Court could not be more clear. The attorney fees were awarded to DiNardo, even though the orders also required the Debtor to make payments of the awarded attorney fees directly to DiNardo’s law firm, Jaffe, Raitt, Heuer & Weiss.

The fact that the payments were required to be made by the Debtor directly to the law firm does not mean that these attorney fees are not owed to or recoverable by DiNardo.

Finally, the Debtor argues that the attorney fees awarded by the Wayne County Circuit Court are not in the nature of support. The consequence, according to the Debtor, is that the awarded attorney fees are not a domestic support obligation as defined in § 101(14A) of the Bankruptcy Court and, therefore, the exception to the automatic stay under § 362(b)(2)(A)(ii) of the Bankruptcy Code does not apply.

The Court is not persuaded. At the hearing on March 4, 2011, the Court explained why the Court views the awarded attorney fees as a domestic support obligation under
§ 101(14A) of the Bankruptcy Code and why the Wayne County Circuit Court action regarding the attorney fees is within the exception to the automatic stay of § 362(b)(2)(A)(ii) of the Bankruptcy Code.

In reaching its decision, the Court carefully reviewed the opinions entered by the Wayne
County Circuit Court on March 24, 2010 and November 30, 2010. Those opinions demonstrate that the Wayne County Circuit Court considered both the ability of DiNardo to pay the attorney fees incurred by her in the Wayne County Circuit Court action and the ability of the Debtor to pay the attorney fees incurred.

The Wayne County Circuit Court expressly considered the financial
resources of both of those parties. Further, the Wayne County Circuit Court cited to case law in Michigan that supports an award of attorney fees if necessary to enable a party to prosecute or defend a domestic relations action.

The cases cited by the Wayne County Circuit Court in its opinions persuade the Court that the awarded attorney fees are in the nature of support and, therefore, constitute a domestic support obligation in the Debtor’s bankruptcy case.
Local Bankruptcy Rule 9024-1(a)(3) sets forth the criteria for this Court to apply to a motion for reconsideration.

That rule provides that a motion for reconsideration that merely presents the
same issues ruled upon by the Court, either expressly or by reasonable implication, will not be granted.

The rule further provides that the moving party must demonstrate that a palpable defect
has occurred by which the Court and the parties have been misled, and that a different disposition of a case must result from a correction of that defect. The Debtor’s motion for reconsideration in this case does not meet that standard. None of the arguments advanced by the Debtor demonstrate a palpable defect. At the hearing on March 4, 2011, the Court found that the attorney fees awarded by the Wayne County Circuit Court constitute a domestic support obligation under § 101(14A) of the Bankruptcy Code. The orders of the Wayne County Circuit make clear that the attorney fees are owed to or recoverable by DiNardo. DiNardo is a parent of a child of the Debtor.

The attorney fees awarded are in the nature of support (see Goans v. Goans (In re Goans), 271 B.R. 528, 534 (Bankr. E.D. Mich. 2001)). The awarded attorney fees are established by an order of the Wayne County Circuit Court.

All of the elements of a domestic support obligation under § 101(14A) of the
Bankruptcy Code are present. Therefore, the exception to the automatic stay set forth in
§ 362(b)(2)(A)(ii) of the Bankruptcy Code applies. The Wayne County Circuit Court has concurrent jurisdiction to determine whether or not the automatic stay exception of § 362(b)(2)(A)(ii) of the Bankruptcy Code applies to the proceeding before it. See Chao v. Hospital Staffing Services, Inc.,270 F.3d 374, 383-84 (6th Cir. 2001).

Once the Wayne County Circuit Court made the determination that the automatic stay did not apply to the proceeding before it, and that the exception under § 362(b)(2)(A)(ii) of the Bankruptcy Code is applicable, the Wayne County Circuit Court had concurrent jurisdiction to determine whether or not the attorney fees that it had awarded against the Debtor and in favor of DiNardo constitute a non-dischargeable debt under § 523(a)(5)
of the Bankruptcy Code in the Debtor’s bankruptcy case.

The Wayne County Circuit Court’s order of February 14, 2011 did just that. The Rooker-Feldman doctrine prevents the Debtor from now seeking review of that determination in this Court. See Johnson v. Grandy, 512 U.S. 997, 1005-06 (1994) (citing District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983) and
Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923)) (“[A] party losing in state court is barred from seeking what in substance would be appellate review of the state judgment in a United States district court, based on the losing party’s claim that the state judgment itself violates the loser’s federal rights.”).
If the Debtor does not agree with the decision of the Wayne County Circuit Court on
February 14, 2011, the Debtor’s remedy is to appeal that decision to the Michigan Court of Appeals, not to seek review of that decision in the Bankruptcy Court.

The Debtor’s motion for reconsideration does not meet the standard of L.B.R. 9024-1(a)(3). Accordingly,
IT IS HEREBY ORDERED that the Debtor’s motion for reconsideration (docket entry no. 46) is denied.
.

BANKRUPTCY BANKRUPTCY FLINT BANKRUPTCY FLINT BANKRUPTCY ATTORNEY FLINT BANKRUPTCY LAWYER CREDIT CARD DEBTS, MEDICAL DEBTS AND ATTORNEY FEES

FLINT BANKRUPTCY  810-235-1970:The automatic stay created when you file for bankruptcy stops all collection on debt from credit cards, medical debts, attorney fees, debts arising from breach of contract, or legal judgements against you. The exceptions are child support and alimony.

FLINT BANKRUPCY:When you file for bankruptcy your creditors cannot:
a. file a lawsuit or proceed with a lawsuit already filed against you.
b. Your creditors cannot record leins against you.
c. Your creditor cannot report your debt to a credit bureau.
d.your creditor cannot seize your property or income, such as money in the bank account or you paycheck.
Contact Terry R. Bankert 810-235-1970 for answers to more of your bankruptcy questions. HTTP://WWW.ATTORNEYBANKERT.COM

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