New Mexico

What Are ‘7’ Trustees Paid When the Case Converts to ‘13’ Before Distributions?

Courts have at least six theories about compensation for chapter 7 trustees for valuable services rendered when the case converts to chapter 13 before the trustee has made any distributions.

IRS Standard Deduction for Housing Can Be Taken Without Mortgage or Rent Expense

Official Form 122C-2 could be read to deprive a chapter 13 debtor of the IRS standard housing deduction when the statute permits the deduction.

Properly Written, a Divorce Decree Doesn’t Create a Debtor/Creditor Relationship

A properly written divorce decree can create a separate property interest that won’t be part of the bankruptcy estate of a bankrupt spouse.

The Standard for Enlarging the Time to File a Subchapter V Plan

Judge Jacobvitz of New Mexico follows Judge Harner of Maryland in developing a standard for deciding whether a Subchapter V debtor may extend the time for filing a plan.

State Court Is the ‘More Appropriate Forum’ to Divide Marital Property

The bankruptcy court can divide marital property, but just because it can doesn’t mean it should, Judge Thuma says.

Survivor’s Benefits Under a Pension Plan Might Not Become Estate Property

Unlike Clark v. Rameker, where an inherited IRA wasn’t exempt, the inheritance of benefits under a pension plan might not become estate property under Section 541(c)(2).

A DIP’s Lawyer Can Later Become Adverse to a Chapter 11 Liquidating Trust

Judge David Thuma explains why a chapter 11 debtor in possession and a subsequent liquidating trust are different clients for the purpose of a conflict analysis, at least when the committee has confirmed a liquidating plan.

Defamation and IIED Claims Are Not ‘Personal Injury Torts’

Section 157(b)(5) does not bar the bankruptcy court from trying defamation and IIED claims, Judge Thuma says, siding with Judge Bernstein.

Majority of Courts Use Confirmation Date to Value a Lender’s Collateral in Cramdown

Courts are split when it comes to deciding whether the confirmation date or the filing date should be used to value a secured lender’s collateral in cramdown.

Judge Tells ‘13’ Debtors’ Counsel How to Write their Retention Agreements

Judge Jacobvitz told counsel for chapter 13 debtors how to write their engagement agreements to ensure being paid from funds held by the trustee if the case converts to chapter 7 before confirmation.