Fitzgerald v. Gorman (In re Fitzgerald)

Summarized by Jennifer Lyday , Waldrep Wall Babcock & Bailey PLLC
10 years 10 months ago

Citation:

Case No. 1:14-cv-01017-GBL-JFA

Tag(s):

Ruling:

The bankruptcy court's finding that the debtor was ineligible for chapter 13 relief because his secured debt total exceeded the statutory limit pursuant to Section 109(e) of the Bankruptcy Code was not clearly erroneous. The debtor's secured debt total exceeded the statutory limit because (1) the debtor could not bifurcate the undersecured portion of the mortgage on his primary residence, and (2) although the debtor’s in personam liability was extinguished during chapter 7, the secured creditor retained an in rem "right to payment" or "right to an equitable remedy."

Procedural context:

The Fourth Circuit affirmed the district court's order affirming the bankruptcy court's order dismissing the debtor's chapter 13 petition.

Facts:

The debtor had previously discharged his in personam liability on his mortgage debt through a chapter 7 case. The debtor’s financial situation then improved, and he was able to file a subsequent chapter 13 case. The amount of the mortgage on the debtor’s primary residence was $1,433,165.93 on the petition date. His primary residence was valued at $1,041,000.00, less than the statutory secured debt limit pursuant to Section 109(e) of the Bankruptcy Code. Pursuant to Section 1322(b)(2) of the Bankruptcy Code, the debtor could not bifurcate this claim because it was secured by his primary residence. Additionally, although the debtor’s in personam liability was extinguished during chapter 7, the secured creditor retained an in rem "right to payment" or "right to an equitable remedy.”

Judge(s):

Shedd, Duncan, and Thacker

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