Recent Victories

PUBLISHED CASES:

The following are the cases Lamey Law Firm litigated, which became published opinions:

In re Hartwick
District of Minnesota
06-31241

The debtor filed a chapter 7 bankruptcy petition. She indicated in her petition that she intended to surrender her homestead which had two liens against it. The trustee brought a motion to dismiss the debtor's chapter 7 case for abuse based upon the argument that the debtor should not be permitted to take means test deductions for the first and second mortgage payments on secured property which she is intending to surrender. Also, the trustee objected to the debtor deducting an "operating expense" for a vehicle which did not have a lien against it. The trustee argued that without these expenses, the debtor would have disposable income with which to pay back her unsecured creditors, and as such should have to file a chapter 13. The bankruptcy court denied the trustee's motion to dismiss and the trustee appealed to the United States District Court for the District of Minnesota.

The District Court held that the trustee was correct with regard to the operating expense for the debtor's vehicle. She could not take the deduction for the operating expense for a vehicle she owned free and clear of any liens. On the issue of means test deductions for mortgage payments where the debtor indicates an intention to surrender the home, the court held that, the plain language of the statute coupled with the debtor's existent contractual obligation to make the payments on the home resulted in the holding that the debtor was permitted to take the deductions for the mortgage payments on the home she intended to surrender.

As a result of Lamey Law Firm's litigation of this case the debtor's bar has more guidance with respect to what deductions can be taken on the means test and as such which clients qualify to file a Chapter 7 bankruptcy as opposed to a Chapter 13.

To read the Bankruptcy Court's Decision click here.

To read the District Court's Decision click here.

In re Carlson
District of Minnesota
08-6013

The debtors filed a joint chapter 7 bankruptcy petition. They exempted their entire 2007 Federal and State income tax refunds. The trustee objected to their exemption on the grounds that the majority of the refund belonged solely to Mr. Carlson who worked outside the home, while none of it belonged to Mrs. Carlson who was primarily a homemaker during the 2007 tax year. The lower court found in favor of the trustee, so the debtors appealed. The Bankruptcy Appellate Panel for the 8th Circuit agreed with the lower court.

This decision has made the task of allocating and exempting tax returns easier for the debtors bar. Because there is now precedent on the issue, debtor's attorneys do not have to speculate as to what might happen to clients' refunds. This opinion especially helps debtors in a case where only one spouse files and the non-filing spouse is the sole bread winner. In such a situation, the trustee cannot take any of the tax refund because based on In re Carlson, it does not belong to the spouse who filed.

http://www.ca8.uscourts.gov/opndir/08/09/086013P.pdf

In re Johnson
District of Minnesota
04-43221

The bankruptcy trustee objected to the debtors' claimed exemption in their homestead. The debtors resided on a 5 acre tract of land which contained their homestead. The matter went to trial. The debtors stood to lose over $130,000 in equity in their homestead. Lamey Law Firm prevailed. The homestead was exempt from attachment by creditors and debtors were granted their discharge.

In re Anderson
District of Minnesota
07-41556

The debtors filed a Chapter 7 bankruptcy. The debtors' means test showed their median income to be under the required median income for their household size. Nonetheless, the United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors. Specifically, the trustee needed proof of income for the debtor's self employment and from a trust which paid out to one of the debtors. The debtors provided the trustee with documents supporting the expenses claimed, and the trustee revised their Statement of Abuse to a Statement of No Abuse. The debtors received their chapter 7 discharge.

In re Johnson
District of Minnesota
07-42535

The debtor filed a Chapter 13 bankruptcy and was forced to convert her case to a Chapter 7 because of lost income. In the converted petition and schedules, the debtor's means test showed her median income to be $23,000 more per year than the required median income for her household size. The United States Trustee filed a Statement of Presumed Abuse. After document production and communication with the attorney for the U.S. Trustee, they instead filed a statement indicating that a Motion to Dismiss was not appropriate. The debtor received her Chapter 7 discharge.

In re Stanley
District of Minnesota
07-33144

The debtor's means test showed his median income to be $6,000 more per year than the required median income for their household size. The debtor filed a Chapter 7 bankruptcy. The United States Trustee found his case to be abusive and brought a motion to dismiss his Chapter 7 case citing many of the debtor's expenses as excessive and indicated bad faith on the part of the debtor. After responding to the motion and attaching many months worth of the debtor's bills which showed that his expenses were indeed what he claimed they were in his bankruptcy petition, the United States Trustee withdrew its motion. The debtor received his Chapter 7 discharge.

In re Stellmach
District of Minnesota
07-44482

The debtors filed a Chapter 7 bankruptcy. The debtors' means test showed their median income to be under the required median income for their household size. Nonetheless, the United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors. Specifically, the trustee needed proof of income for the debtor's self employment and proof of the amount of support payments one of the debtors was entitled to from a previous marriage. The debtors provided the trustee with documents supporting the expenses claimed, and the trustee revised their Statement of Abuse to a Statement of No Abuse. The debtors received their chapter 7 discharge.

In re Berg
District of Minnesota
07-34710

The debtors' means test showed their median income to be $1,800 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors, specifically, the trustee wanted documents which supported the medical expenses claimed by the debtors on their means test, which were higher than allotted by the IRS standards. The debtors provided the trustee with documents supporting the expenses claimed, and the trustee revised their Statement of Abuse to a Statement of No Abuse. The debtors received their chapter 7 discharge.

Kent Hrbek, Robert Lurtsema, James W. Lupient, Anthony Parker and Robert Paul vs. Nicholas G. Grammas and SRB, Inc.
District of Minnesota
Adversary Number 08-04051

Lamey Law Firm represented a group of individuals including former Minnesota Twin Kent Hrbek and former Minnesota Viking "Benchwarmer Bob" Lurtsema in bankruptcy court to exclude from discharge over $650,000.00 in debt allegedly owed from Mr. Grammas. The parties reached a confidential settlement to resolve this matter before trial.

Roberts et al vs. Collen Wallin
District of Minnesota
Adversary Number 08-04244

Lamey Law Firm represented a group of individuals and investment companies that were defrauded in a real estate transaction. Lamey Law Firm, on behalf of this group, sued Ms. Wallin in bankruptcy court for fraud and sought to protect from discharge the amount owed to the group. Lamey Law Firm obtained a ruling for its clients that protected from discharge over one million dollars that was owed by Ms. Wallin.

In re Given
District of Minnesota
08-31664

The debtors' means test showed their median income to be $8,000 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors, specifically, the trustee needed pay stubs to verify income and documentation showing the debtor's child support payments were accurate. The debtors provided the trustee with documents supporting the expenses claimed, and the trustee revised their Statement of Abuse to a Statement of No Abuse. The debtors received their chapter 7 discharge.

In re Timmers
District of Minnesota
08-34076

The debtors' means test showed their median income to be $2,200 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee requested numerous documents of the debtors and then filed a Motion to Dismiss their Chapter 7 bankruptcy. The trustee's motion was based on the fact that the debtors took certain deductions for their vehicles on the means test which the trustee believed to be improper. The debtors and Lamey Law Firm filed a response to the trustee's motion along with supporting documentation. The trustee withdrew his motion and the debtors received their chapter 7 discharge.

In re Stoffels
District of Minnesota
08-45691

The debtors' means test showed their median income to be $2,200 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee requested numerous documents of the debtors, which the debtors provided. The trustee then filed a Motion to Dismiss the debtors' case for abuse. The debtors filed a response to the trustee's motion, which included pertinent documents and the trustee withdrew his motion. The debtors received their Chapter 7 discharge.

In re Feist
District of Minnesota
08-35932

The debtor filed a Chapter 7 bankruptcy. The debtor's means test showed his median income to be under the required median income for his household size. However, after factoring in the non-filing spouse, the couple were over the median income by $30,000.00. The United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors and non-filing spouse. The debtor provided the trustee with documents supporting the argument that both spouses kept separate finances, and the trustee revised his Statement of Abuse to a Statement of No Abuse. The debtor received his chapter 7 discharge.

In re Henderson
District of Minnesota
09-30142

The debtors were not required to file a means test in their Chapter 7 bankruptcy case due to the fact that more than half of their debt could be characterized as "non-consumer" debt. However, as is required by the bankruptcy judges in Minnesota, the debtors did fill out a portion of the means test which showed their median income to be $32,000 more per year than the median income for their household size. The trustee brought a motion to dismiss the debtors' case citing abuse because the trustee was of the opinion that the debt which could be considered "non-consumer" did not make up more than half their total debt, despite debtors' contention otherwise. After responding to the trustee's motion, providing supporting documentation, and appearing in front of the bankruptcy judge on the motion, the trustee withdrew its motion to dismiss and debtors received their discharge.

In re Olson
District of Minnesota
09-31788

The debtors' means test showed their median income to be $15,000 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee filed a Statement of Presumed Abuse and requested numerous documents of the debtors, specifically, the trustee wanted documents which supported the medical expenses claimed by the debtors on their means test, which were higher than allotted by the IRS standards. The debtors provided the trustee with documents supporting the expenses claimed, and the trustee revised their Statement of Abuse to a Statement of No Abuse. The debtors received their chapter 7 discharge.

In re Kouble
District of Minnesota
09-32249

The debtors' means test showed their median income to be $7,000 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee requested numerous documents of the debtors and then filed a Motion to Dismiss their Chapter 7 bankruptcy. The trustee's motion was based on incorrect information as the trustee mistook a deduction from the debtor's paycheck for a garnishment, which cannot be deducted from the means test, when in actuality it was a deduction for child support, which can be deducted from the means test. The debtors and Lamey Law Firm filed a response to the trustee's motion along with supporting documentation. The trustee withdrew his motion and the debtors received their chapter 7 discharge.

In re Muellner
District of Minnesota
09-32288

The debtors' means test showed their median income to be $18,000 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee found their case to be abusive and brought a motion to dismiss their Chapter 7 case. Lamey Law Firm responded to the trustee's motion to dismiss and the trustee withdrew his motion based upon the response and the supporting documents filed by the debtors and Lamey Law Firm.

In re Gezunterman
District of Minnesota
09-43653

Creditor brought an adversary lawsuit to have over $100,000 of debt determined non-dischargeable in debtor's bankruptcy. Lamey Law Firm brought a motion to dismiss the lawsuit for failing to state a claim and prevailed. The bankruptcy judge dismissed the lawsuit.

In re Wallick
District of Minnesota
09-34781

The debtors' means test showed their median income to be $18,000 more per year than the required median income for their household size. The debtors filed a Chapter 7 bankruptcy. The United States Trustee requested numerous documents of the debtors and filed a Statement of Presumed Abuse. After further document production and communication with the trustee, he amended the statement to one of No Abuse, and the debtors received their discharge.

In re Maples
District of Minnesota
09-35034

The debtor's means test showed her median income to be $15,500 more per year than the required median income for her household size. The debtor filed a Chapter 7 bankruptcy. The United States Trustee requested numerous documents from the debtor, which the debtor provided. The trustee brought a motion to dismiss the debtor's Chapter 7 case. The debtor and Lamey Law Firm responded to the trustee's motion with a legal memorandum as well as additional documents to support the numbers which the debtor entered on her means test and her budget and the trustee withdrew his motion.

In re Smith
District of Minnesota
09-36660

Creditor, Discover Bank, brought an adversary lawsuit in the debtors' chapter 7 bankruptcy asking that nearly $8,000 owed to them not be discharged in their bankruptcy. After documentation was provided to the Creditor's attorney showing all of the funds were spent on daily living and other necessary expenses, the creditor's attorneys dismissed the adversary lawsuit and the $8,000 was discharged in the debtors' Chapter 7 bankruptcy.

In re Knipp
District of Minnesota
09-39111

The debtor filed a Chapter 7 bankruptcy and after being provided with requested documents, the United States Trustee filed a Statement of Presumed Abuse. The trustee believed that debtor may have been entitled to bonuses on a regular basis which would have enabled him to make meaningful payments to his creditors in a chapter 13. After responding to further inquiries on the part of the trustee and providing supporting documentation, the trustee withdrew his Statement of Presumed Abuse and the debtor received his discharge.

Oman vs. D.E.B.T. Financial Services, Inc.
District of Minnesota
Adversary Number 10-03001

The debtor had funds in a checking account which had been frozen by one of his creditors. When the debtor filed bankruptcy the funds were still being held in the account and had not yet been released to the creditor. After the bankruptcy filing, while the automatic stay was still in effect, the bank released the funds to the creditor. Lamey Law Firm filed an adversary on behalf of the debtor for violation of the automatic stay. The creditor offered to return the funds in their entirety as settlement for the lawsuit, which the debtor accepted. He was returned all of the funds which had been taken.

In re Lee
District of Minnesota
10-38464

The debtors filed a Chapter 13 bankruptcy which proposed to strip off the second mortgage lien recorded against their homestead. Upon filing, the value of the debtors' homestead was less than the balance on their first mortgage. The debtors were able to reach an agreement with their second mortgage company whereby they will pay only a small portion of what they owe on their second mortgage through their bankruptcy plan. The remaining balance on the second mortgage would then be considered unsecured and would be paid pro-rata with the debtors' other unsecured creditors. The agreement between the debtor and the second mortgage lender also provided that if the debtors completed their entire Chapter 13 plan and made all of the payments under the plan, the second lien would be considered satisfied and the lender would file a satisfaction of the mortgage with the county recorder's office upon completion of the debtors' plan. As such, when the debtors complete their Chapter 13 plan payments, only the first mortgage lien will remain on their property.

In re Czyxczynski
District of Minnesota
10-34296

The debtors filed a Chapter 13 bankruptcy which proposed to strip off the second mortgage lien recorded against their homestead. Upon filing, the value of the debtors' homestead was less than the balance on their first mortgage. The debtors were able to reach an agreement with their second mortgage company whereby they will pay only a small portion of what they owe on their second mortgage through their bankruptcy plan. The remaining balance on the second mortgage would then be considered unsecured and would be paid pro-rata with the debtors' other unsecured creditors.

Despite the agreement that had been reached by the debtors and their second mortgage lender, the bankruptcy judge assigned to the case required the debtors to write a legal brief on the issue of the legality of stripping off the second mortgage and the issue of whether it would prejudice the other unsecured creditors to have the remainder of the second mortgage included in with their unsecured claims. Based upon the debtors' brief, the judge held that the second mortgage could be modified in the manner agreed upon by the debtors and the second mortgage lender, and ordered that the plan could include the agreement reached between the parties.

The agreement between the debtor and the second mortgage lender provided that if the debtors completed their entire Chapter 13 plan and made all of the payments under the plan, the second lien would be considered satisfied and the lender would file a satisfaction of the mortgage with the county recorder's office upon completion of the debtors' plan. As such, when the debtors complete their Chapter 13 plan payments, only the first mortgage lien will remain on their property.

In re Vanderhei
Western District of Wisconsin
1-10-14944TSU

The bankruptcy trustee objected to the debtor's claimed exemption in his homestead, which he owned jointly with his spouse who did not join in his bankruptcy filing. The trustee objected on the basis that debtor could not exempt all of the equity in his homestead because half of it belonged to his wife, who did not file and therefore could not exempt her equity. Lamey Law Firm argued that the debtor had an indivisible interest in the property under Wisconsin's community property laws, and therefore could exempt all of the equity under the statute. The debtor and his non-filing spouse stood to lose over $70,000 in equity in their homestead. The judge agreed with Lamey Law Firm and the debtor prevailed. The homestead was exempt from attachment by creditors and debtor was granted their discharge.

In re Jones, District of Minnesota 13-31040

The debtors file a Chapter 7 bankruptcy which fell under scrutiny by the United States Trustee.  After successfully overcoming the presumption of abuse with regard to the debtors' income, the U.S. Trustee still sought dismissal of their Chatper 7 bankruptcy solely because the Trustee believed the debtors' mortgage payments were too high and as such they were not entitled to Chatper 7 relief.

Lamey Law Firm responded to the Trustee's motion with evidence that the debtors' mortgage expense included the expense of running their business out of their home, and argued this fact in front of the judge at oral arguments on the motion.  The debtors prevailed and the U.S. Trustee's moiton to dismiss the debtors Chapter 7 bankruptcy case was denied outright by the judge following oral arguments from both sides.