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.

Bankruptcy Court’s Decision: http://www.mnb.uscourts.gov/Newsite/Judge_Office/Opinions/DDO/hartwick.ddo.pdf

To read the District Court's Decision click here.   

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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

RECENT VICTORIES

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 Bower, District of Minnesota, 09-43815

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 to rid themselves of all of their unsecured debt.  After extensive document requests by the trustee and an audit requesting additional documents, the debtors overcame the U.S. Trustee’s statement of presumed abuse, and the auditor found no material misstatements on the part of the debtors.  The debtors received their discharge and a clean slate.

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.