In re Letsche

In re Letsche

Opinion

 [*209]  MEMORANDUM

I. INTRODUCTION

The matters before the Court are 1) the objection to confirmation of the Debtors' Chapter 13 plan filed by Edith Connelly ("Connelly"), Marilyn Letsche's elderly mother, pursuant to which Connelly seeks a finding that the Debtors' Chapter 13 plan was proposed in bad faith, denial of confirmation of the Debtors' proposed Chapter 13 plan and dismissal of the Debtors' Chapter 13 case; and 2) the Debtors' Motion to Avoid Judicial Lien, which judicial lien was obtained by Connelly prior to the filing of the Debtors' Chapter 13 petition. The issues raised by the objection are whether the Debtors filed their Chapter 13 petition and proposed their Chapter 13 plan in good faith. If the Court finds that the Debtors did not propose their Chapter 13 plan in good faith or finds cause for dismissal of their Chapter 13 case because [**2]  of bad faith, the Motion to Avoid Judicial Lien will be moot.

The Court conducted an evidentiary hearing with respect to Connelly's objection to confirmation on March 10, 1999. At the hearing, Marilyn and Paul Letsche testified. The Court makes the following findings of fact and rulings of law with respect to Connelly's objection to confirmation and motion to dismiss based upon the facts admitted in the Joint Pretrial Statement, the Debtors' testimony, documentary evidence and the record of proceedings in this case.

II. FACTS

The Debtors filed a voluntary petition under Chapter 13 on June 25, 1998, one week after Connelly levied and suspended execution on a judgment she obtained against the Debtors from the Suffolk Superior Court in the amount of $ 77,077.70. Connelly obtained the judgment against the Debtors in September of 1997 approximately two months prior to the recordation of a homestead with respect to their residence located at 6 Stanbro Street, Hyde Park, Massachusetts. The judgment, which was issued on September 19, 1997, was accompanied by Findings of Fact and Rulings of Law. In their Joint Pretrial Statement, Connelly and the Debtors agreed to the following [**3]  with respect to the state court's findings and rulings:

The State Court's Findings include: that Marilyn Letsche unduly influenced Connelly to convey a one half interest in her home to Marilyn Letsche; that Marilyn Letsche, without Connelly's authorization signed reimbursement checks made payable to Connelly and obtained cash by signing Connelly's signature on various checks from Connelly's bank accounts; and that Marilyn Letsche transferred ownership of and/or obtained the cash surrender value of various life and industrial insurance policies by forging Connelly's signature.

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