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United States Court of Appeals for the Fourth Circuit
November 28, 2006, Argued ; January 18, 2007, Decided
No. 05-1637, No. 05-1844
[*145] HAMILTON, Senior Circuit Judge:
The two cases before the court involve instances in which the Chapter 13 trustee sought to modify a confirmed Chapter 13 plan to increase the amount to be paid to the unsecured creditors. 1 In the first case, that of Stanley and Doris Goralski, the Chapter 13 trustee sought to modify the confirmed Chapter 13 plan after the bankruptcy court granted the Goralskis permission to refinance the mortgage on their residence. In the refinancing, the Goralskis received some of the equity in their residence [**2] in cash in exchange for a corresponding amount of debt, and the Chapter 13 trustee sought a portion of this money for the further benefit of the unsecured creditors. The Goralskis sought to refinance their mortgage primarily because Stanley Goralski's earned income was cut approximately in half, making it difficult for the Goralskis to make their plan payments and, at the same time, pay their ordinary and necessary living expenses. In the second case, that of James Owen Murphy, Jr., the Chapter 13 trustee sought to modify the confirmed Chapter 13 plan after the bankruptcy court granted Murphy permission to sell his condominium. The Chapter 13 trustee sought a [*146] portion of the sale proceeds for the further benefit of the unsecured creditors because, without a modification, Murphy stood to pocket in excess of $ 80,000, as his condominium had dramatically increased in value post-confirmation. The bankruptcy court granted the motion to modify in Murphy's case, but denied it in the Goralskis' case. See In re Murphy, 327 B.R. 760 (Bankr. E.D. Va. 2005). The district court affirmed the bankruptcy court's decisions. Murphy appeals the decision in his case, as does the Chapter [**3] 13 trustee in the Goralskis' case. For the reasons stated below, we affirm.
The facts and procedural history in these two cases are not in dispute and are set forth separately for the reader's convenience.
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474 F.3d 143 *; 2007 U.S. App. LEXIS 1018 **; Bankr. L. Rep. (CCH) P80,831; 57 Collier Bankr. Cas. 2d (MB) 553
In Re: JAMES OWEN MURPHY, JR., Debtor. JAMES OWEN MURPHY, JR., d/b/a Murphy's Golf Shop, Plaintiff-Appellant, v. GERALD M. O'DONNELL, Trustee, Defendant-Appellee. In Re: STANLEY JOSEPH GORALSKI; DORIS ANN GORALSKI, Debtors. GERALD M. O'DONNELL, Chapter 13 Trustee, Trustee-Appellant, v. STANLEY JOSEPH GORALSKI; DORIS ANN GORALSKI, Debtors-Appellees.
Prior History: [**1] Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. (CA-05-151-1-CMH; BK-03-15596-SSM; CA-05-353-1; BK-03-12055-SSM). Claude M. Hilton, Senior District Judge.
In re Murphy, 327 B.R. 760, 2005 Bankr. LEXIS 308 (Bankr. E.D. Va., 2005)
confirmed, modification, bankruptcy court, financial condition, unsecured creditor, modify, refinancing, unanticipated, post-confirmation, percent, courts, doctrine of res judicata, condominium, property of the estate, payoff, trustee's motion, mortgage, plans, motion to modify, district court, modified plan, appreciated, refinance, schedules, vested
Bankruptcy Law, Individuals With Regular Income, Plans, General Overview, Plan Confirmation, Plan Modification, Effects of Confirmation, Estate Property