FACT PATTERN ONE Ethan and Raney Sword own a summer cabin in the Poconos Mountains. The Swords contract with Adrian, a local painter, to paint the cabin before the summer season. They agree on a price of $5,000, including labor and materials. Adrian completes the job on time, but the Swords claim financial hardship and only pay him $2,000 of the charges. 1) Can Adrian obtain the rest of what he is owed from the Swords? If so, what are his options? 2) Assume that the Swords gave a mortgage to Fox Credit Union securing the cabin as collateral five years prior to them hiring Adrian to paint it, would Fox Credit Union's security interest be affected in anyway as a result of the Swords failure to fully pay Adrian?
FACT PATTERN ONE
Ethan and Raney Sword own a summer cabin in the Poconos Mountains. The Swords contract with Adrian, a local painter, to paint the cabin before the summer season. They agree on a price of $5,000, including labor and materials. Adrian completes the job on time, but the Swords claim financial hardship and only pay him $2,000 of the charges.
1) Can Adrian obtain the rest of what he is owed from the Swords? If so, what are his options?
2) Assume that the Swords gave a mortgage to Fox Credit Union securing the cabin as collateral five years prior to them hiring Adrian to paint it, would Fox Credit Union's security interest be affected in anyway as a result of the Swords failure to fully pay Adrian?
FACT PATTERN TWO
A debtor has an automobile worth $5000. The federal exemption applicable to her is $3225. The trustee sells the car and gives the debtor the amount of the exemption. The debtor, exhausted by the bankruptcy proceedings, takes the money and spends it on a six week vacation in Mexico.
Is this abuse of the bankruptcy system?
BONUS FACT PATTERN
This Bonus Fact Pattern is extra credit and worth maximum of five points that I will add to your exam grade for this section.
Vogel filed for Chapter 7 bankruptcy in March 2007. Vogel’s debts consisted of $11,000 in secured debt represented by his automobile and $35,925 in unsecured debt. Vogel’s assets on the petition dated totaled approximately $2800.00 all of which he claimed as exempted property. Vogel also reported monthly expenses of $1600. Vogel was
The bankruptcy Trustee instructed him not to spend it but he did; the entire amount on new vehicles and nonemergency personal expenses. Vogel continued his bankruptcy proceeding and requested discharge of his pre-petition debts. The trustee seeks dismissal of the petition based on bad faith conduct given the totality of the circumstances.
Should the Court grant the trustee’s motion to dismiss?
Does it make a difference that the lottery proceeds were post-petition and not part of the bankruptcy?
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FACT PATTERN TWO
A debtor has an automobile worth $5000. The federal exemption applicable to her is $3225. The trustee sells the car and gives the debtor the amount of the exemption. The debtor, exhausted by the bankruptcy proceedings, takes the money and spends it on a six week vacation in Mexico.
Is this abuse of the bankruptcy system?
by Bartleby Expert