§ 51.1     Can Debtor Sue and Be Sued?
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 51.1, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

There is no specific section of Chapter 13 authorizing the debtor to commence or continue lawsuits by or against the debtor. Section 323 of the Code applies in Chapter 13 cases and states, “The trustee in a case under this title has capacity to sue and be sued.”1 In Chapter 11 cases, § 1107(a) empowers a debtor-in-possession to exercise the rights and powers elsewhere granted to a trustee; there is a similar grant of authority to the debtor in Chapter 12,2 but no similar grant to the Chapter 13 debtor. Bankruptcy Rule 6009 provides that “the trustee or debtor-in-possession may prosecute or may enter an appearance and defend any pending action or proceeding by or against the debtor, or commence and prosecute any action or proceeding on behalf of the estate before any tribunal.”3 There is no similar rule with respect to debtors in Chapter 13 cases.4

[2]

11 U.S.C. § 1303 gives the debtor in a Chapter 13 case, exclusive of the trustee, the rights and powers of a trustee under several subsections of § 363.5 By this cross-reference, § 363(b) and (d) permit the debtor in a Chapter 13 case to use, sell or lease property of the estate. A debtor’s cause of action becomes property of the Chapter 13 estate under §§ 541 and 1306.6 It can be argued that the debtor’s right to use property of the estate includes prosecution of a cause of action that became property of the Chapter 13 estate. Although there is no cross-reference to § 323 in § 1303, one reported bankruptcy court decision finds support for a Chapter 13 debtor’s right to sue in the legislative history to § 1303.7

[3]

On several different theories, and sometimes without discussion, many reported decisions have permitted Chapter 13 debtors to commence or continue lawsuits alone or concurrently with the trustee.8 For example, in Olick v. Parker & Parsley Petroleum Co.,9 after the Chapter 13 petition, the debtor provided consulting services in litigation pending in another court. The debtor then sued to collect fees and expenses for that work. The debtor’s standing was challenged, and the U.S. Court of Appeals for the Second Circuit sustained the debtor’s standing to pursue the cause of action in his own name:

The Bankruptcy Code itself is silent as to whether a debtor retains the capacity to sue others when a cause of action belongs to the bankruptcy estate. . . . [W]e conclude that a Chapter 13 debtor, unlike a Chapter 7 debtor, has standing to litigate causes of action that are not part of a case under title 11. . . . The legislative history of § 1303, which sets out the exclusive rights of a Chapter 13 debtor, supports the holding that a Chapter 13 debtor’s standing is different. . . . [I]n Chapter 13 proceedings (unlike Chapter 7 proceedings) the creditors’ recovery is drawn from the debtor’s earnings, not from the assets of the bankruptcy estate; it is only the Chapter 13 debtor who stands to gain or lose from efforts to pursue a cause of action that is an asset of the bankruptcy estate. Accordingly, the trustee’s participation in such an action is generally not needed to protect the Chapter 13 creditors’ rights.10
[4]

On somewhat different logic, the U.S. Court of Appeals for the Seventh Circuit concluded in Cable v. Ivy Tech State College (In re Cable)11 that the Chapter 13 debtor has standing to file, prosecute and appeal an action under the Americans With Disabilities Act. In Cable, prior to conversion from Chapter 7, the debtor filed an ADA suit. The Chapter 7 trustee was a named party. Unhappy with the Chapter 7 trustee’s proposed settlement of the suit, the debtor converted to Chapter 13. The confirmation order required payment of proceeds from the lawsuit to creditors in the event of recovery. The Seventh Circuit found that Bankruptcy Rule 6009 gave the debtor authority to prosecute the action and the ADA suit was property of the Chapter 13 estate under § 1306(b). The Seventh Circuit explained:

Chapter 13 grants the debtor possession of the estate’s property . . . . The chose in action, here a discrimination case, belongs to the estate and was being prosecuted for the benefit of its creditors. It would frustrate the essential purpose of § 1306 to grant the debtor possession of the chose in action yet prohibit him from pursuing it for the benefit of the estate. . . .  While this Court stated [in Black v. United States Postal Service (In re Heath), 115 F.3d 521 (7th Cir. 1997),] that the trustee exercises exclusive authority to sue and be sued . . . we did not address the situation presented when a debtor-in-possession [sic] acts, pursuant to its statutory command, in the role of trustee. . . . To say that the trustee has “exclusive authority” does not mean that the debtor-in-possession [sic] cannot act as a trustee and therefore enjoy that same authority. . . . The Chapter 13 debtor has standing to bring claims that benefit the estate.12
[5]

In American General Finance, Inc. v. Tippins (In re Tippins),13 the debtor was a party in a lawsuit against several lenders for fraud, misrepresentation and conspiracy in connection with credit life insurance included in consumer loans. After confirmation, the debtor amended the statements and schedules to reveal the lawsuit and, without opposition, claimed the cause of action as exempt property. The debtor’s standing to continue the lawsuit was then challenged. The bankruptcy court acknowledged that capacity to sue and be sued belonged to the Chapter 13 trustee under § 323(b) and was not one of the rights or powers of a debtor under § 1303. However, because no party objected to the debtor’s exemption claim, the debtor “obtained a property right in the lawsuit and its proceeds. That property interest necessarily creates standing in the debtor.”14

[6]

Another court found that a Chapter 13 debtor’s standing to sue was an effect of confirmation of a plan. In Davis v. Victor Warren Properties, Inc. (In re Davis),15 the debtor’s complaint sought to set aside a foreclosure under state law. Citing § 323 of the Code, the bankruptcy court observed that the state law cause of action became property of the Chapter 13 estate and the Chapter 13 trustee was the estate’s representative to maintain that lawsuit. The court found no authority in the Bankruptcy Code for the debtor to bring a state law cause of action without the trustee as a necessary party. However, “if a plan and confirmation order result in revesting property of the estate in the debtor, then the debtor could prosecute a state law claim that, prior to confirmation, was property of the estate.”16

[7]

Perhaps the most substantial body of case law with respect to Chapter 13 debtors’ standing to sue comes out of the U.S. Bankruptcy Court for the Southern District of Alabama. In a series of actions and class actions by Chapter 13 debtors, creditors—NationsBanc Mortgage Corporation, HomeSide Lending, Inc., First Union Mortgage Corporation and Chrysler Financial Corporation—were sued for various practices in Chapter 13 cases, including the failure to disclose attorneys’ fees included in proofs of claim.17 In many reported and unreported opinions, Judge Mahoney determined that Chapter 13 debtors have standing to sue creditors, individually and (sometimes) as class representatives, with respect to the filing of proofs of claim. These decisions are a comprehensive archive of legal analysis of the strengths and problems with suits by Chapter 13 debtors. Unfortunately, some of these decisions are unreported and are only available through the Web site for the Bankruptcy Court for the Southern District of Alabama.18 In several of the Alabama actions, Chapter 13 debtors recovered damages, including punitive damages of $2 million.

[8]

Most of the time, the debtor will not desire to continue to sue or be sued; in fact, the filing of the Chapter 13 case is a welcomed relief from prepetition litigation. Chapter 13 debtors have been permitted to avoid transfers and recover property under the preference, fraudulent conveyance, strong-arm and other avoidance and recovery powers, though the Bankruptcy Code is ambiguous with respect to the debtor’s standing to do so.19

[9]

Chapter 13 debtors occasionally are personally involved enough to bring suit and to want to control litigation during the Chapter 13 case. Disputes involving consumer fraud, lending and collection practices and personal injury to the debtor have produced reported decisions in which Chapter 13 debtors have asserted control over litigation after filing the petition.20 One court held that a Chapter 13 debtor’s right to sue and be sued, though exercised concurrently with the trustee, is exclusively the debtor’s with respect to who “owns” a civil rights action in which the debtor is the plaintiff; thus, the debtor controls whether and on what terms to settle the lawsuit.21 This is a sensible outcome. The Chapter 13 debtor has the exclusive right to “use” the lawsuit under §§ 1303 and 363, and the debtor should control all aspects of the litigation, including settlement. The debtor would certainly have to notice any settlement to all creditors under Bankruptcy Rule 9019. The (nonexempt) proceeds of a lawsuit by the debtor will be property of the estate that must be valued for purposes of the best-interests-of-creditors test.22 The proceeds may be characterized as income for purposes of the disposable income test in § 1325(b).23

[10]

Chapter 13 trustees are reluctant to commence or continue litigation. This is especially true of domestic relations litigation involving the debtor, which is routinely allowed to proceed with only the debtor as a party.24 If other litigation has any substantial potential recovery, chances are the debtor will exempt as much as possible to dissuade involvement by the trustee. Compensation of the trustee or trustee’s counsel for litigation in a Chapter 13 case is problematic.25 One reported decision holds that only the Chapter 13 debtor has authority to retain counsel to prosecute a prepetition tort claim.26 Most of the time, the Chapter 13 debtor is the only party positioned to evaluate causes of action that belong to the estate and only the debtor can effectively continue to prosecute promising litigation. It would make sense for the Code to expressly authorize Chapter 13 debtors to sue and be sued.

[11]

Discussed in more detail elsewhere,27 the debtor’s right to sue becomes a two-edged sword when the debtor fails to schedule a cause of action during the Chapter 13 case and later tries to prosecute that action against a sophisticated defendant. Several reported decisions struggle with the question whether the debtor is judicially estopped to maintain an action that was property of a Chapter 13 estate but was not revealed to creditors during the Chapter 13 case.28


 

1  11 U.S.C. § 323(b) (emphasis added).

 

2  See 11 U.S.C. § 1203.

 

3  Fed. R. Bankr. P. 6009 (emphasis added).

 

4  “Debtor-in-possession” is a term of art applicable only in Chapter 11 cases. See 11 U.S.C. § 1101(1).

 

5  See § 44.1 [ Debtor Has Exclusive Control of Estate Property ] § 45.1  Debtor Has Exclusive Possession and Control of Estate Property.

 

6  See § 47.7 [ Causes of Action ] § 46.11  Causes of Action—Including Judicial Estoppel Issues.

 

7  See In re Bowker, 245 B.R. 192, 196 (Bankr. D.N.J. 2000) (“The legislative history of § 1303 of the Code . . . supports the conclusion that the chapter 13 debtor has the right to retain counsel to pursue litigation after filing bankruptcy. ‘Section 1303 of the House Amendment specifies rights and powers that the debtor has exclusive of the trustees. The section does not imply that the debtor does not also possess other powers concurrently with the trustee. For example, although section 1323 [sic, presumably 323] is not specified in section 1303, certainly it is intended that the debtor has the power to sue and be sued.’ 124 Cong. Rec. H. 11,106 (daily ed. Sept. 28, 1978); S. 17,423 (daily ed. Oct. 5, 1978).”).

 

8  See, e.g., Cable v. Ivy Tech State College (In re Cable), 200 F.3d 467 (7th Cir. 1999) (Citing Bankruptcy Rule 6009 and distinguishing In re Heath, 115 F.3d 521 (7th Cir. 1997), “debtor in possession” in a Chapter 13 case has standing to file, prosecute and appeal an action under the Americans With Disabilities Act.); Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998) (Debtor’s right to pursue an award of fees and expenses for consulting in class action litigation pending in district court is a cause of action that passed to the estate that the debtor can pursue in his own name during the Chapter 13 case.); Stansberry v. Uhlich Children’s Home, 264 F. Supp. 681 (N.D. Ill. 2003) (Citing Cable v. Ivy Tech State College, 200 F.3d 467 (7th Cir. 1999), Chapter 13 debtor has standing to sue former employer for wrongful termination and retaliation under ADA, FMLA and § 525.); Beasley v. Personal Fin. Corp. (In re Sanders), 279 B.R. 523, 528 & n.1 (S.D. Miss. 2002) (Chapter 13 debtor is not dismissed as plaintiff in a district court lawsuit because prepetition action remains in the possession and control of the debtor. “A Chapter 13 debtor does not lose his right to sue upon filing his petition for bankruptcy. . . . [A] Chapter 13 debtor ‘retains possession of and may use all the property of his estate, including his prepetition causes of action.’ . . . Sanders has standing to pursue the instant cause of action.” In a footnote, “as a practical matter, a Chapter 13 debtor and trustee share concurrent standing to sue.”); Campion v. Credit Bureau Servs., Inc., 206 F.R.D. 663, 669 (E.D. Wash. 2001) (Debtor has standing to bring class action against Credit Bureau Services for misrepresentations in connection with writs of garnishment. Citing 11 U.S.C. § 323(b), Fed. R. Bankr. P. 6009 and § 1306, “case law analogizes Chapter 13 debtors to Chapter 11 debtors and applies the ‘debtor in possession’ phrase used in Rule 6009 to Chapter 13 debtors. . . . If Mr. Campion prevails, his estate will be enlarged by his damage award. Accordingly, Mr. Campion has standing to sue Mr. Miller.”); Murray v. Board of Educ. of the City of N.Y., 248 B.R. 484 (S.D.N.Y. 2000) (Chapter 13 debtor has standing to maintain employment discrimination suit against City of New York.); Pettit v. Smith (In re Pettit), 241 B.R. 847 (E.D. Pa. 1999) (Affirms the dismissal on summary judgment of a Chapter 13 debtor’s legal malpractice action against his tax counsel on statute of limitations grounds.); Michael v. Forcier (In re Forcier), Nos. 02-10670, 02-1050, 2003 WL 22846359 (Bankr. D. Vt. Nov. 26, 2003) (unpublished) (Debtor has standing to bring adversary proceeding in former spouse’s Chapter 7 case to determine whether a debt is nondischargeable under § 523(a)(15).); Smith v. Fairbanks Capital Corp. (In re Smith), 299 B.R. 687 (Bankr. S.D. Ga. 2003) (Chapter 13 debtor has standing to bring class action against Fairbanks Capital, alleging improper assessment and collection of attorney fees because confirmed plan provided for direct payment to Fairbanks.); Quarles v. Wells Fargo Home Mortgage, Inc. (In re Quarles), 294 B.R. 729 (Bankr. E.D. Ark. 2003) (Chapter 13 debtor as plaintiff has a right to trial by jury in suit for money damages against a defendant that is no longer a creditor in the Chapter 13 case.); Jakab v. Cendant Mortgage Corp. (In re Jakab), 293 B.R. 621 (Bankr. D. Vt. 2003) (Chapter 13 debtor and trustee are proper “joint plaintiffs” in action to void a mortgage that lacks a necessary signature under Vermont law.); York v. Bank of Am., N.A. (In re York), 291 B.R. 806, 815 (Bankr. E.D. Tenn. 2003) (Chapter 13 debtor has standing to set aside a prepetition mortgage foreclosure sale. “[B]y giving the debtor the exclusive right to use property of the bankruptcy estate, § 1303 suggests the trustee cannot bring suit. . . . [T]he debtor has the right to bring suit because the debtor has the right to use the property—the cause of action that came into the bankruptcy estate.”); Michaelesco v. Estate of Bernice P. Richard (In re Michaelesco), 276 B.R. 39 (Bankr. D. Conn. 2002) (Pro se Chapter 13 debtor’s complaint to recover payment for services rendered is dismissed because defendant is a probate estate that cannot be sued under state law.); Williams v. Law Soc’y of Hong Kong (In re Williams), 264 B.R. 234 (Bankr. D. Conn. 2001) (Chapter 13 debtor’s adversary proceeding against Hong Kong defendants for violation of the automatic stay dismissed for lack of sufficient contacts to satisfy due process.); McNinch v. Mortgage Am., Inc. (In re McNinch), 250 B.R. 848 (Bankr. W.D. Pa. 2000) (Chapter 13 debtor’s Truth-in-Lending Act complaint is dismissed because lender’s amended disclosure statement satisfied TILA disclosure requirements.); In re Bowker, 245 B.R. 192 (Bankr. D.N.J. 2000) (Chapter 13 debtor has standing exclusive of the trustee to hire counsel and prosecute a prepetition tort claim.); Noletto v. Nationsbanc Mortgage Corp. (In re Noletto), 244 B.R. 845 (Bankr. S.D. Ala. 2000) (Bankruptcy court has subject matter jurisdiction over class actions by Chapter 13 debtors alleging that creditors violated the automatic stay by assessing fees or charges against debtors in Chapter 13 cases.); Donato v. Metropolitan Life Ins. Co., 230 B.R. 418 (N.D. Cal. 1999) (Debtor has concurrent standing with Chapter 13 trustee to bring postpetition action for employment discrimination and wrongful termination.); Rivera v. Proctor (In re Rivera), 186 B.R. 505, 507 (D. Kan. 1995) (Debtor’s post-confirmation lawsuit against an employer for wrongful termination is property of the estate, is a “related to” proceeding, and can be tried upon withdrawal of the reference in the district court. “Although Rivera’s § 1983 claim arose post-petition and after confirmation of the plan, under Chapter 13, ‘[p]roperty of the type specified in [11 U.S.C.] section 541 that a debtor acquires after the commencement of the case but before conversion, dismissal or closing of the case, is also property of the estate.’”); Medina-Figueroa v. Heylinger, 63 B.R. 572 (D.P.R. 1986) (Debtor’s cause of action for medical malpractice is property of the Chapter 13 estate.); Leary v. Miller (In re Leary), 241 B.R. 266 (Bankr. D. Mass. 1999) (Denies summary judgment to defendant in debtors’ suit to rescind the purchase of a business based on claims of fraudulent inducement and misrepresentations by the seller; seller’s estoppel argument based on debtors’ failure to schedule cause of action in prior Chapter 7 case is not ripe for adjudication.); Travelers Indem. Co. of Ill., Inc. v. Griner (In re Griner), 240 B.R. 432, 434–36 (Bankr. S.D. Ala. 1999) (Debtor has standing concurrent with Chapter 13 trustee to continue prepetition lawsuit against an insurance company for failure to treat a work related injury. “The cases are divided on whether a chapter 13 debtor has standing to sue or be sued. . . . The Court concludes that the trustee and debtor concurrently hold the power to sue as to nonbankruptcy federal and state law claims . . . . In a chapter 13 case, unless otherwise specifically provided by the debtors’ plan, a debtor remains in possession of all of his or her assets pre- and postconfirmation. . . . Under 11 U.S.C. § 323(b) any trustee in any chapter has the capacity to sue and be sued. . . . The legislative history to § 1303 . . . states that § 1303 ‘does not imply that the debtor does not also possess other powers concurrently with the trustee. For example, although section [323] is not specified in section 1303, certainly it is intended that the debtor has the power to sue and be sued.’ 1214 Cong. Rec. H11,106 (daily ed. Sept. 28, 1978).”); Olivieri v. Generali Ins. Co. (In re Olivieri), 238 B.R. 1 (Bankr. D.R.I. 1999) (Debtor has standing to join lawsuit to determine whether insurance covered building that the debtor sold during the Chapter 13 case. If lawsuit succeeds, insurance will pay liens and building will become an asset of the Chapter 13 estate.); American Gen. Fin., Inc. v. Tippins (In re Tippins), 221 B.R. 11 (Bankr. N.D. Ala. 1998) (Chapter 13 debtor’s state court cause of action against lenders for fraud, misrepresentation, and conspiracy in connection with credit life insurance included in prepetition loan agreement is property of the estate, and debtor had standing to maintain the lawsuit.); In re Wirmel, 134 B.R. 258 (Bankr. S.D. Ohio 1991) (Chapter 13 debtor’s right to sue and be sued may be exercised concurrently with the trustee, but debtor “owns” a civil rights action and controls whether and on what terms to settle the lawsuit. After conversion from Chapter 7 to Chapter 13, the Chapter 7 trustee has no control over the settlement of the civil rights lawsuit.); Koresko v. Chase Manhattan Fin. Servs., Inc. (In re Koresko), 91 B.R. 689 (Bankr. E.D. Pa. 1988) (Debtor’s cause of action against lender for failure to provide written notice of sale of a repossessed automobile is property of the Chapter 13 estate. Statutory damages for disposing of the debtor’s Porche totaled $14,289.); Fleet v. United States Consumer Council, Inc., 53 B.R. 833 (Bankr. E.D. Pa. 1985) (Debtors’ causes of action, whether they arise prepetition or postpetition, are property of the Chapter 13 estate by virtue of § 1306(a).); In re Kutner, 3 B.R. 422 (Bankr. N.D. Tex. 1980) (Chapter 13 debtor has power to sue and be sued.).

 

9  145 F.3d 513 (2d Cir. 1998).

 

10  145 F.3d at 515–16. Accord Murray v. Board of Educ. of the City of N.Y., 248 B.R. 484, 486–87 (S.D.N.Y. 2000) (Chapter 13 debtor has standing to maintain employment discrimination suit against City of New York notwithstanding the debtor’s failure to list lawsuit in two Chapter 13 filings. “While Chapter 7 and Chapter 11 debtors lose standing to maintain civil suits—which must be brought and/or maintained by their bankruptcy trustees—it is clear that Chapter 13 debtors like plaintiff are not subject to this restriction. See Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998).”); Donato v. Metropolitan Life Ins. Co., 230 B.R. 418, 425 (N.D. Cal. 1999) (Citing Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998), “under 11 U.S.C. § 323(a) and (b), the trustee in a case filed under any section of the Bankruptcy Code is the representative of the estate and has the capacity to sue and be sued, but . . . the Code is silent about whether a Chapter 13 debtor also has the capacity to sue others on a prepetition claim. . . . Section 1303 vests in a Chapter 13 debtor certain rights and powers over the assets of the estate to the exclusion of the trustee. . . . The legislative history of § 1303 clarifies that, although the power to sue and be sued is not explicitly listed within this section, Congress intended that a Chapter 13 debtor possess the nonexclusive capacity to litigate lawsuits on his or her own behalf.”); Michael v. Forcier (In re Forcier), Nos. 02-10670, 02-1050, 2003 WL 22846359 (Bankr. D. Vt. Nov. 26, 2003) (unpublished) (Citing Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998), debtor has standing to bring adversary proceeding in former spouse’s Chapter 7 case to determine whether a debt is nondischargeable under § 523(a)(15).); Jakab v. Cendant Mortgage Corp. (In re Jakab), 293 B.R. 621 (Bankr. D. Vt. 2003) (Citing Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998), Chapter 13 debtor and trustee are proper “joint plaintiffs” in action to void a mortgage that lacks a necessary signature under Vermont law.).

 

11  200 F.3d 467 (7th Cir. 1999).

 

12  200 F.3d at 470–72. Accord Stansberry v. Uhlich Children’s Home, 264 F. Supp. 681 (N.D. Ill. 2003) (Citing Cable v. Ivy Tech State College, 200 F.3d 467 (7th Cir. 1999), Chapter 13 debtor has standing to sue former employer for wrongful termination and retaliation under ADA, FMLA and 11 U.S.C. § 525; there is no statutory support for recovery of punitive damages under § 525.).

 

13  221 B.R. 11 (Bankr. N.D. Ala. 1998).

 

14  221 B.R. at 18.

 

15  216 B.R. 898 (Bankr. N.D. Ga. 1997).

 

16  216 B.R. at 903. Accord Showalter v. Rinard, 126 B.R. 596, 600 (D. Or. 1991) (Chapter 13 debtor’s tort action against driver of a car “cannot be properly viewed . . . as property of his bankruptcy estate.” Personal injury claim was listed as personal property on the debtor’s statements and schedules; however, provision of confirmed plan vested the cause of action in the debtor free and clear of claims of creditors or the trustee.).

 

17  See, e.g., Slick v. Norwest Mortgage, Inc. (In re Slick), Nos. 98-14378-MAM, 99-1136, 2002 WL 1404753 (Bankr. S.D. Ala. May 10, 2002); Harris v. First Union Mortgage Corp. (In re Harris), Nos. 96-14029, 99-1144, 2002 WL 1404747 (Bankr. S.D. Ala. May 10, 2002); In re Powe, 278 B.R. 539 (Bankr. S.D. Ala. 2002); In re Rayborn, No. 98-12083, 2002 WL 1404751 (Bankr. S.D. Ala. Apr. 4, 2002); In re Bryant, 294 B.R. 791 (Bankr. S.D. Ala. 2002); In re Noletto, No. 98-13813-MAM-13, 2001 WL 1744423 (Bankr. S.D. Ala. Nov. 20, 2001) (inpublished); In re Powe, 282 B.R. 31 (Bankr. S.D. Ala. 2001); Noletto v. NationsBanc Mortgage Corp. (In re Noletto), 281 B.R. 373 (Bankr. S.D. Ala. 2001); Powe v. Chrysler Fin. Corp. (In re Powe), 281 B.R. 336 (Bankr. S.D. Ala. 2001), amended by 280 B.R. 867 (Bankr. S.D. Ala. 2001); Sheffield v. HomeSide Lending, Inc. (In re Sheffield), 281 B.R. 330 (Bankr. S.D. Ala. 2001); Harris v. First Union Mortgage Corp. (In re Harris), 281 B.R. 323 (Bankr. S.D. Ala. 2001); Sheffield v. HomeSide Lending, Inc. (In re Sheffield), 281 B.R. 67 (Bankr. S.D. Ala. 2001); Sheffield v. HomeSide Lending, Inc. (In re Sheffield), 280 B.R. 900 (Bankr. S.D. Ala. 2001); In re Harris, 280 B.R. 899 (Bankr. S.D. Ala. 2001); Dean v. First Union Mortgage Corp. (In re Harris), 280 B.R. 876 (Bankr. S.D. Ala. 2001); Noletto v. NationsBanc Mortgage Corp. (In re Noletto), 281 B.R. 36 (Bankr. S.D. Ala. 2000), reconsideration granted in part, 280 B.R. 868 (Bankr. S.D. Ala. 2001); In re Powe, 280 B.R. 728 (Bankr. S.D. Ala. 2001); In re Harris, 280 B.R. 724 (Bankr. S.D. Ala. 2001); In re Slick, 280 B.R. 722 (Bankr. S.D. Ala. 2001).

 

18  See http://www.alsb.uscourts.gov.

 

19  See § 50.1  Turnover of Property§ 50.2  Relief from Garnishments§ 50.3  Strong-Arm Powers, Statutory Liens, Preferences and Fraudulent Conveyances§ 50.4  Avoidance Powers after BAPCPA§ 50.5  Preferences after BAPCPA§ 50.6  Fraudulent Transfers after BAPCPA and § 50.7  Postpetition Transfers.

 

20  See, e.g., Cable v. Ivy Tech State Coll. (In re Cable), 200 F.3d 467 (7th Cir. 1999) (Debtor converts from Chapter 7 to Chapter 13 to stop Chapter 7 trustee from settling action under the Americans With Disabilities Act; after converion, debtor has standing to file, prosecute and appeal the ADA suit.); Maher v. Continental Cas. Co., 76 F.3d 535 (4th Cir. 1996) (Affirms in part and reverses in part judgment for debtor in action for breach of insurance contract and for unfair insurance claim settlement practices. Debtor sued insurance company after business failed because insurance company slow-walked settlement of fire damage to furniture store.); Stansberry v. Uhlich Children’s Home, 264 F. Supp. 681 (N.D. Ill. 2003) (Chapter 13 debtor has standing to sue former employer for wrongful termination and retaliation under ADA, FMLA and 11 U.S.C. § 525.); Beasley v. Personal Fin. Corp. (In re Sanders), 279 B.R. 523 (S.D. Miss. 2002) (Although Chapter 13 debtor and trustee share concurrent standing to bring suit against lender for misconduct in connection with the sale of insurance, civil action is only related to the Chapter 13 case and discretionary abstention is appropriate.); Campion v. Credit Bureau Servs., Inc., 206 F.R.D. 663 (E.D. Wash. 2001) (Debtor has standing to bring class action against Credit Bureau Services for misrepresentations in connection with writs of garnishment.); Murray v. Board of Educ. of the City of N.Y., 248 B.R. 484 (S.D.N.Y. 2000) (Chapter 13 debtor maintains employment discrimination suit against City of New York.); Donato v. Metropolitan Life Ins. Co., 230 B.R. 418 (N.D. Cal. 1999) (Debtor has concurrent standing with Chapter 13 trustee to bring postpetition action for employment discrimination and wrongful termination.); Maloy v. Phillips (In re Maloy), 197 B.R. 721 (M.D. Ga. 1996) (In lawsuit against a debt collector for violation of the Fair Debt Collection Practices Act, because Chapter 13 case was filed before debt collector could give the five-day notice of validation of debt described in 15 U.S.C. § 1692g, omission is not actionable.); Dean v. American Gen. Fin., Inc., 191 B.R. 463 (M.D. Ala. 1996) (Remand to state court and abstention are appropriate in lawsuit by Chapter 13 debtors and others against insurance companies for violation of the Federal Trade Commission Act, misrepresentation, and fraud in the marketing of credit insurance.); Rivera v. Proctor (In re Rivera), 186 B.R. 505 (D. Kan. 1995) (Debtor’s postconfirmation lawsuit against an employer for wrongful termination is property of the estate, is a “related to” proceeding, and can be tried upon withdrawal of the reference in the district court.); Smith v. Fairbanks Capital Corp. (In re Smith), 299 B.R. 687 (Bankr. S.D. Ga. 2003) (Chapter 13 debtor has standing to bring class action against Fairbanks Capital, alleging improper assessment and collection of attorney fees because confirmed plan provided for direct payment to Fairbanks.); McNinch v. Mortgage Am., Inc. (In re McNinch), 250 B.R. 848 (Bankr. W.D. Pa. 2000) (Chapter 13 debtor’s Truth-in-Lending Act complaint is dismissed because lender’s amended disclosure statement satisfied TILA disclosure requirements.); In re Bowker, 245 B.R. 192 (Bankr. D.N.J. 2000) (Chapter 13 debtor has standing exclusive of the trustee to hire counsel and prosecute a prepetition tort claim.); Noletto v. Nationsbanc Mortgage Corp. (In re Noletto), 244 B.R. 845 (Bankr. S.D. Ala. 2000) (Chapter 13 debtors maintain class action alleging that creditors violated stay by assessing fees or charges against debtors in Chapter 13 cases.); Travelers Indemnity Co. of Ill., Inc. v. Griner (In re Griner), 240 B.R. 432 (Bankr. S.D. Ala. 1999) (Debtor has standing concurrent with Chapter 13 trustee to continue prepetition lawsuit against an insurance company for failure to treat a work related injury.); Rodriguez v. Mellon Bank, N.A. (In re Rodriguez), 218 B.R. 764, 786 (Bankr. E.D. Pa. 1998) (Debtor entitled to treble damages totaling $56,105.91 and an award of attorney fees based on mortgage holder’s “cumulatively egregious, malicious, wanton, willful and oppressive” acts with respect to the debtor’s home. Mortgage holder failed to give notices required by Pennsylvania law, took possession of the debtor’s house, violated its fiduciary obligations as a “mortgagee in possession,” and failed to maintain the property while it was in control.); Royal v. Daihatsu (In re Royal), 197 B.R. 341 (Bankr. N.D. Ala. 1996) (Debtor’s postconfirmation state court lawsuit, removed by the defendant/lender, is properly remanded. Claims in the state court complaint are based entirely on state law. Although action is “related to” the pending Chapter 13 case, factors weigh in favor of remand.); Clayter v. Larkin (In re Clayter), 174 B.R. 134 (Bankr. D. Kan. 1994) (postconfirmation adversary proceeding by Chapter 13 debtor for damages caused by sale to debtors of a home located on environmentally contaminated property).

 

21  In re Wirmel, 134 B.R. 258 (Bankr. S.D. Ohio 1991). But see Richardson v. United Parcel Serv., 195 B.R. 737 (E.D. Mo. 1996) (Debtor’s cause of action for employment discrimination is property of the Chapter 13 estate. Chapter 13 trustee steps into the shoes of the debtor for purposes of maintaining suit. Debtor’s failure to schedule the cause of action as an asset could judicially estop the debtor from maintaining the lawsuit, but creditors would be penalized if the court dismissed the claim to punish the debtor.).

 

22  See §§ 160.1 [ In General: Plan Payments vs. Hypothetical Liquidation ] § 90.1  In General: Plan Payments vs. Hypothetical Liquidation and 161.1 [ Exemption Issues ] § 90.2  Exemption Issues. See, e.g., In re Myers, 200 B.R. 155 (Bankr. N.D. Ohio 1996) (Debtor’s right to payments pursuant to the structured settlement of a prepetition automobile accident is a contract right, not a spendthrift trust; thus the full present value of the future payments is property of the Chapter 13 estate and must be included in the best-interests-of-creditors test calculation at confirmation.).

 

23  See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.

 

24  See § 69.1 [ Alimony and Support Exception ] § 58.5  Alimony and Support Exception. See, e.g., Michael v. Forcier (In re Forcier), Nos. 02-10670, 02-1050, 2003 WL 22846359 (Bankr. D. Vt. Nov. 26, 2003) (unpublished) (Chapter 13 debtor has standing to bring adversary proceeding in former spouse’s Chapter 7 case to determine whether a debt is nondischargeable under § 523(a)(15).).

 

25  See §§ 60.1 [ Avoidance and Recovery Powers ] § 53.12  Avoidance and Recovery Powers and 63.1 [ Standard Percentage Fee and Expenses ] § 54.1  Standard Percentage Fee and Expenses.

 

26  In re Bowker, 245 B.R. 192, 194–200 (Bankr. D.N.J. 2000) (Chapter 13 debtor has standing exclusive of the trustee to hire counsel and prosecute a prepetition tort claim. Prior to the petition, the debtor filed a state court tort action for personal injury. After the petition but before confirmation, the debtor’s bankruptcy counsel filed a motion to retain the debtor’s tort lawyers as special counsel to the trustee to continue the prepetition litigation. “This court concludes that it is the debtor alone who has the authority to retain special counsel and pursue a cause of action that is property of the chapter 13 bankruptcy estate. . . . Section 1306(b) of the Bankruptcy Code states that ‘[e]xcept as provided in a confirmed plan or order confirming a plan, the debtor shall remain in possession of all property of the estate.’ Furthermore, § 1303 gives the debtor the right to use property of the estate to the exclusion of the trustee. . . . There are practical reasons why the debtor alone should control, and be responsible for, litigation . . . additional administrative burden. . . . The trustee would have to investigate the existence of potential litigation, assess its merits, and make a cost benefit analysis . . . . [T]he trustee would have to select and retain counsel . . . . The trustee would incur expenses . . . . To require that the trustee be a party to all litigation on behalf of the chapter 13 estates would subject the trustee to an impossible responsibility.”).

 

27  See § 47.7 [ Causes of Action ] § 46.11  Causes of Action—Including Judicial Estoppel Issues.

 

28  See § 47.7 [ Causes of Action ] § 46.11  Causes of Action—Including Judicial Estoppel Issues. See, e.g., Wolfork v. Tackett, 526 S.E.2d 436, 437–38 (Ga. Ct. App. 1999) (Chapter 13 debtor’s failure to schedule a tort claim precludes post discharge recovery from the tortfeasor. “The failure to disclose an asset (such as a cause of action) in a bankruptcy proceeding amounts to a denial that such a claim exists and bars subsequent attempts to pursue it. . . . In a Chapter 13 bankruptcy case, property of the estate also includes all property acquired by the debtor during the bankruptcy proceeding. . . . A tort claim in favor of the debtor arising after the filing of the Chapter 13 bankruptcy petition but before the bankruptcy is closed is considered after-acquired property that is part of the estate. . . . Because Wolfork failed to supplement her Chapter 13 bankruptcy petition with the post-petition tort claim, she is barred by the principle of judicial estoppel from pursuing her claim after the bankruptcy proceeding was closed.”), aff’d, 540 S.E.2d 611 (Ga. 2001), cert. denied, 534 U.S. 819, 122 S. Ct. 51, L. Ed. 2d 21 (2001); Murray v. Board of Educ. of the City of N.Y., 248 B.R. 484 (S.D.N.Y. 2000) (Chapter 13 debtor has standing to maintain employment discrimination suit against City of New York notwithstanding the debtor’s failure to list lawsuit in two Chapter 13 filings. The City’s judicial estoppel argument fails because the City failed to prove that the debtor “acted in bad faith or with intent to mislead the Court.”); In re Carter, 258 B.R. 526 (Bankr. S.D. Ga. 2001) (Citing Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000), cert. denied, 531 U.S. 1073, 121 S. Ct. 765, 148 L. Ed. 2d 666 (2001), debtors need not fear equitable estoppel in unscheduled state court lawsuit to recover for injuries sustained in an automobile accident that occurred three years after confirmation of a 100% Chapter 13 plan. Lawsuit was not necessary to fulfill the plan and thus became property of the debtors, not property of the bankruptcy estate. It is unnecessary to reopen the Chapter 13 case to amend the schedules to reveal the lawsuit.).