BANKRUPTCY DECISIONS

Marrama v. Citizens Bank of Massachusetts , 127 S.Ct. 1105 (Feb. 21, 2007).

The Supreme Court held that a chapter 7 debtor does not have an absolute right to convert his case to chapter 13. The 5-4 majority concluded that a chapter 7 debtor whose case could be converted or dismissed for cause under 11 U.S.C. Section 1307(c) had forfeited the right to proceed under chapter 13.

In re: Pyatt , 486 F.3d 423 (C.A.8 May 23, 2007).

The Court of Appeals held that:
(1) funds that were in debtor's checking account at time he filed for chapter 7 relief, and that were removed from account only postpetition, when debtor's bank honored checks which he had written prepetition, were included in "property of the estate";
(2) debtor had "control" over funds, of kind sufficient for trustee to compel turn over of these funds by debtor; but
(3) debtor, having lost all control over money that was removed from his checking account when his prepetition checks were honored postpetition, could not be subject of turnover motion.

In re Kibbe , 361 B.R. 302 (1 ^st Cir. BAP Feb. 20, 2007).

The Bankruptcy Appellate Panel of the First Circuit affirmed the denial of confirmation and held that the starting point for projecting disposable income was not current monthly income, as defined by the Code, but rather current income, as reflected on Schedule I, less amounts specifically excluded from the statutory definition of current monthly income, such as social security.

In re Osborn , 363 B.R. 72 (8 ^th Cir. BAP Feb. 23, 2007).

The Bankruptcy Appellate Panel of the Eighth Circuit considered whether debtors may surrender 910-vehicles in full satisfaction of the creditor's claim. The Court held that the "hanging paragraph" precluded bifurcation of purchase-money motor vehicle lender's claim, not only in cramdown context so as to prevent debtors from cramming down plan by paying creditor only the value of motor vehicle securing its claim, but also in event that debtors elected to surrender motor vehicle securing creditor's purchase-money claim.