In re Izzo, Bankruptcy No. 96-10597.

• Decision Date: 03 June 1996
• Docket Number: Bankruptcy No. 96-10597.
• Parties: In re Alan A. IZZO, Sr., Debtor.
• Court: United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Rhode Island

197 B.R. 11 (1996)

In re Alan A. IZZO, Sr., Debtor.

Bankruptcy No. 96-10597.

United States Bankruptcy Court, D. Rhode Island.

June 3, 1996.

Janet J. Goldman, Warwick, RI, for Debtor.

ORDER TO SHOW CAUSE:

(1) WHY THE DEBTOR AND HIS ATTORNEY SHOULD NOT BE SANCTIONED FOR FILING FALSE AND/OR INACCURATE SCHEDULES AND DECLARATIONS; AND

(2) WHY THE REAFFIRMATION AGREEMENT SHOULD NOT BE STRICKEN AND/OR DECLARED VOID

ARTHUR N. VOTOLATO, Bankruptcy Judge.

Before the Court is a Reaffirmation Agreement wherein the Debtor agrees to pay Citizens Bank $147.40 per month on an outstanding loan of $4,097.40, plus interest at 12.25% per annum. The loan is secured by a 1990 Acura Integra, worth approximately $9,000. See N.A.D.A. Official Used Car Guide, May 1996. The Debtor says in his schedules that his net monthly income is $1,682.48, with expenses of $2,074.34 per month (and the expense total doesn't even include the proposed additional $147.40 monthly payment to Citizens). See Schedule J. In support of this arrangement, Debtor's counsel certified in the Reaffirmation Agreement that: "This agreement represents a fully informed and voluntary agreement that does not impose an undue hardship on the debtor or any dependent of the debtor. I have fully advised the debtor of the legal effect and consequences of Reaffirmation, including default." Why an attorney would sign such an affidavit in this case is, to us, incomprehensible.¹

Clearly, something is wrong with either the schedules, the attorney's certification, the seriousness with which reaffirmation agreements are being treated by creditors, debtors, and their attorneys,² or this Court's ability to read.

To determine which of the foregoing alternatives applies, Alan A. Izzo, Sr., and his attorney, Janet Goldman, Esq., are ORDERED TO SHOW CAUSE, in writing, on or before June 14, 1996, why SANCTIONS should not be imposed against them for the filing of false or misleading schedules and declarations, and why the affidavit of Janet Goldman should not be stricken, and the Reaffirmation Agreement declared void.

1 Based on his own income and expense figures, there is no way the Debtor can meet his monthly obligations, and it is inevitable that, sooner rather than later, the Debtor will default and his car will be repossessed and sold. Thereafter, if this Reaffirmation Agreement is enforceable, the Debtor will be left owing the deficiency, if any. Without a reaffirmation agreement in force, in the event of default, the Debtor stands to lose only the security.

2 For...