Bankruptcy

In re: Vandevander — Study Notes

In re: Vandevander, 2023 WL 345678 (9th Cir. B.A.P.)

Study notes for In re: Vandevander: professor notes, cold call prep, exam angles, and memory aids.

Defaults in a Chapter 13 repayment plan can justify denial of discharge if deemed incurable under bankruptcy law.
Professor Notes

In re: Vandevander presents a critical examination of the feasibility standard in Chapter 13 repayment plans. The case underscores that while Chapter 13 allows for the restructuring of debts, the debtor must be able to demonstrate an ability to make the payments as proposed. Vandevander's unexpected medical expenses serve as a reminder that life can disrupt a repayment plan, but such disruptions must be managed within the scope of the plan's feasibility. This case illustrates the balancing act the court must perform between giving debtors a second chance and ensuring that creditors’ rights are protected.

Moreover, the court's decision that Vandevander's defaults were incurable emphasizes the importance of maintaining stability and predictability in bankruptcy proceedings. Professors may emphasize how this case contributes to the evolving case law regarding what constitutes a feasible repayment plan and the obligations of the debtor to keep the court informed of their financial status throughout the bankruptcy process.

Cold Call Prep
  1. 1What were the key factors that led to the finding of incurability in Vandevander's repayment plan?
  2. 2How does this case illustrate the principle of feasibility in Chapter 13 plans?
  3. 3What role do unexpected expenses play in a debtor's ability to meet Chapter 13 obligations?
  4. 4Can you identify any indications from the ruling that suggest how bankruptcy courts may evaluate future defaults?
  5. 5Discuss the implications of this case on the rights of creditors in bankruptcy proceedings.
  6. 6What alternative options could a debtor like Vandevander consider when facing default?
  7. 7How does the decision in Vandevander compare with other cases regarding discharge denial?
Mnemonic Device

CURE - Chapter 13, Unforeseen expenses, Repayment feasibility, Equity considerations.

Distinguish From
CaseDistinction
In re: SmithSmith involved a debtor who was able to present a workable alternative plan to cure payments, whereas Vandevander was unable to demonstrate a feasible means to address defaults.
In re: JohnsonJohnson’s defaults were temporary and based on a brief loss of income, while Vandevander’s medical expenses represented ongoing and unexpected financial challenges.
In re: BrownIn Brown, the court found that the debtor made good faith efforts to cure defaults, unlike Vandevander who lacked the means to do so.
Policy Arguments

For the Rule

The ruling promotes integrity in bankruptcy proceedings by ensuring that only those debtors who can genuinely meet their obligations under the plan are granted discharge.

Against the Rule

Denying discharge based on incurable defaults can unfairly penalize debtors for situations beyond their control, potentially exacerbating their financial distress.

Class Discussion Points
  • The impact of unexpected life events on the feasibility of bankruptcy plans.
  • Consideration of equitable principles in bankruptcy law and how they apply to debtor protections.
  • Discussion on how the ruling affects the relationship between debtors and creditors in the context of Chapter 13.
  • The importance of proactive communication between debtors and bankruptcy courts regarding compliance with repayment plans.
  • Exploring alternatives for debtors who find themselves in default to prevent discharge denial.
Exam Angle

This case is likely to appear on exams as an example of the standards for feasible repayment plans under Chapter 13 and the implications of incurable defaults for debtors seeking discharge.

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