In re Harvey
| Decision Date | 14 July 1988 |
| Docket Number | Bankruptcy No. 83 B 15654. |
| Parties | In re Ernestine HARVEY, Debtor. |
| Court | United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois |
Gregory K. Stern, Chicago, Ill., for debtor.
Mary H. LaMountain, Coakley & Smith, Oak Lawn, Ill., for Concordia Federal Bank for Sav.
Jack McCullough, Chicago, Ill., Chapter 13 trustee.
Marshall N. Dickler, Ltd., Arlington Hts., Ill., for 3950 North Lake Shore Drive Condominium Ass'n.
This proceeding arises under Chapter 13 of the Bankruptcy Code. Debtor has moved for Rule to Show Cause and Sanctions under 11 U.S.C. § 362(h) against 3950 North Lake Shore Drive Condominium Association ("Association"). For reasons stated below, that motion is denied.
Debtors owns a condominium unit that is within the Association property. Pursuant to state law and the condominium declaration, Debtor is responsible for prompt monthly payment of assessments properly imposed and other charges provided under the declaration. Debtor is also responsible for reasonable and necessary attorneys fees required to collect those or other charges that may be due from Debtor or otherwise enforce rights of the Association. It is not disputed that Debtor has continued in possession of her unit throughout this case until she completed her Chapter 13 Plan and was discharged herein on March 8, 1988, and that she still continues in possession.
Prior to December 21, 1987, this Court held an evidentiary hearing on a motion of the Association to modify the stay under 11 U.S.C. § 362. The matter at issue then involved the charges, fees, and assessments imposed by the Association against Debtor, Debtor's objections thereto, and considerations as to whether amounts found properly due justified modification of stay.
At the conclusion of that hearing, this Court found that amounts properly due the Association totalled $1,652.33, far less than it claimed.
From the evidence and the Court's finding at that time, it was apparent that all such proper charges, fees, and assessments were incurred and imposed post-petition during the pendency of Debtors plan and while she was in possession of the condominium unit.
Thus, the Association was entitled to pursue its lien rights that arose under the Condominium declaration and state law for the $1,652.33 then due, and also all further lien rights that might thereafter accrue by reason of future assessments, charges, and fees.
The Association not only filed a Notice of Lien for the $1,652.33, but also sought leave in state court to file a counterclaim that seeks judgment against Debtor for all assessments and fees due and owing from Debtor as of the date of Judgment in that case, that the amount found due be adjudged a lien on the unit, and for personal deficiency judgment against Debtor for any amount still due the Association following foreclosure sale.
Debtor now contends that the Motion to file that counterclaim, filed as it was in state court on December 28, 1987, willfully violated 11 U.S.C. § 362 by exceeding the terms of modification provided by the Court. Debtor further seeks a Rule to Show Cause against the Association in apprehension that the Association will continue to claim for a personal deficiency judgment even after Debtor received her discharge on March 8, 1988. This raises the question whether Debtor's personal obligations to Association were discharged by the discharge order entered herein, and whether the Association's pursuit of those claims violates the injunctive effects of the discharge order under 11 U.S.C. § 524(a).
Based on the hearing held by this Court last November, it was then clear that all debts then remaining due from Debtor to the Association were post petition debts. Accordingly, whatever debt the Association now seeks1 is necessarily post petition debt, all pre-petition debt due having been paid to the Association through the Plan.
The issue posed in this context is whether either the automatic stay under 11 U.S.C. § 362 or the injunctive effect of discharge under 11 U.S.C. § 524(a) bars actions to collect from a Chapter 13 debtor those debts related to her home which arose wholly after the Chapter 13 Petition was filed.
The stay under 11 U.S.C. § 362(a) only bars efforts to collect or attempt to collect pre-petition claims or acts against property of the estate. All assessments and charges that the Association here seeks to collect from Debtor are those allegedly incurred by her post-petition while she remained in possession of the condominium unit in question and accrued those on-going...
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