Debtor caused a vehicular collision while driving under the influence, killing the victim. At the time of the accident, two insurance policies covered the Debtor, and neither policy was fully able to settle with the decedent's estate. A lawsuit resulted in a judgment in favor of the estate, upon which the estate was unable to collect. The estate and the decedent's wife then filed an involuntary petition, placing the Debtor into Chapter 7 bankruptcy. An order for relief was entered, and special counsel was appointed to pursue potential first party claims against the insurer relating to their conduct in representing the Debtor prepetition. One of the insurance carriers moved to dismiss the case, asserting that the case had been filed in bad faith as an attempt to bring third party claims against the carriers, which is not allowed under North Carolina law. The court determined that, as no adversary proceeding had yet been filed, and as the carrier was not otherwise parties in interest, it lacked standing to make a motion to dismiss. Further, even if the carrier had standing, the types of claims contemplated by the Trustee would have alone been insufficient for a finding of bad faith. Motion denied.

Debtors sought to reopen their Chapter 13 after completing their plan and receiving their discharge almost three years prior, to challenge the validity of their mortgagor's Deed of Trust. During the case, the Debtors never objected to the mortgagor's proof of claim, the mortgage was paid through the plan, and the Debtors relied on the mortgage to lien strip a junior mortgage. Since the plan was closed, the mortgagor has made several attempts at foreclosure, leading to substantial state and federal litigation and administrative actions. The court ruled that the mortgagor would be prejudiced by reopening the case, that laches applied in precluding the reopening of the case, and that state court was the appropriate forum to address the Debtors' claims. Motion denied.

Former business associate of the Debtor obtained a default judgment against the Debtor in Connecticut state court prior to the petition date, and filed an adversary proceeding to assert nondischargeability pursuant 523(a)(2)(A) and 523(a)(4). The Debtor failed to answer or otherwise plead, and after re-issuing summons, the plaintiff obtained a default judgment in the proceeding. The Debtor motioned to vacate the default judgment and entry of default pursuant to Rule 60(b)(4) and (6) on the grounds that the Debtor was never served despite plaintiff's attempts. The Court ruled that the Debtor's Motion was timely; that the Debtor could assert meritorious defenses, and that the Connecticut judgment was did not collaterally estop the Debtor from opposing the claims in the current proceeding; that no party was unfairly prejudiced by vacating the default judgment; that the Debtor was never properly served pursuant to Bankruptcy Rule 7004; and that entry of default could be set aside.

Chapter 13 Trustee and creditor who failed to properly perfect a vehicle covered under the hanging paragraph of 1325(a) reached a settlement with the Debtor on the Trustee's 549 avoidance action. The Consent Order found the value of the avoidance was equal to the creditor's fully secured claim, and the order further directed that the equity be preserved for unsecured general claims. The Trustee brought a Motion to Modify Plan to incorporate that requirement into the Plan, and the Debtor objected, arguing that only the collateral's value need be paid into the Plan, as in addition to the claim being voidable under 549, it was also void ab initio.  In ruling for the Trustee, the Court declined to answer whether the claim was void, as the Consent Order already established the lien's status as avoidable.