- Case Type:
- Case Status:
- 20-9003 (1st Circuit, Sep 17,2021) Published
- The Chapter 7 debtor had no standing to appeal a bankruptcy court order overruling his objection to a secured creditor's proof of claim for deficiency following foreclosure. In order to have standing, a "person aggrieved" if only the challenged order "directly and adversely" affects their pecuniary interests. A Chapter 7 debtor is not considered a "person aggrieved" and must meet an exception: (1) by adducing sufficient evidence to demonstrate a successful appeal would generate assets in excess of liabilities, or (2) the challenged order would adversely affect the terms of a discharge
- Procedural context:
- Following the bankruptcy court's order overruling the debtor's objection to the secured creditor's claim, the BAP concluded that the debtor did not have appellate standing to challenge the order. The debtor moved to reconsider, which was denied and then appealed to the 1st Circuit.
- The bankruptcy court entered an order in the debtor's Chapter 7 case overruling his objection to the debtor's objection to its unsecured claim for a deficiency following a judicial foreclosure sale of the debtor's property. This Chapter 7 was was preceded by a judicial foreclosure action where default judgment entered against the borrower and his wife, followed by a 2012 Chapter 11 bankruptcy petition that was later dismissed by the debtor before a plan was confirmed and he received his discharge, following by a 2015 Chapter 11 bankruptcy petition, that was also dismissed by the debtor before a plan was confirmed and the debtor received a discharged. Several additional unsuccessful lawsuits were filed by the debtor and his wife in the state courts all challenging the secured creditor's claim on the basis that the court order in his 2012 bankruptcy case granting the debtor's objection to the bank's proof of claim. The secured creditor proceeded with the foreclosure and sold the property, while the debtor and his wife refused to vacate. After eviction proceedings were filed by the purchasers, the debtor filed a Chapter 13 case and once again objected to the bank's claim on the basis that the debt was discharged by virtue of the order in his 2012 case granting his objection to the bank's claim. The bankruptcy court agreed with the creditor and overruled the objection to the claim.
- Thompson, Dyk, Barron
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