Gillman & Gillman | Experienced New Jersey Bankruptcy Lawyers » Chapter 13 Bankruptcy

Some Receipts Not Counted as Income in Chapter 7 or Chapter 13 Bankruptcy Cases

Justin Gillman — Fri, 26 Jun 2009 13:23:41 +0000

A main issue in any Chapter 7 or Chapter 13 Bankruptcy case is the calculation of what is known as “current monthly income”. This issue is the often the most important one in determining whether a debtor qualifies for a chapter 7 bankruptcy or is required to pay their creditors in a chapter 13 bankruptcy.

In some cases, even though a debtor has received money, it is not counted as “income” for purposes of determining qualification for a chapter 7 bankruptcy case. Funds received from the following are not included:

(1) money received from the sale of property, such as stocks, bonds, a house, or a car (unless the person is engaged in the business of selling such property);

(2) withdrawals of bank deposits;

(3) money borrowed;

(4) tax refunds;

(5) gifts; and

(6) lump-sum inheritances of insurance payments.

See U.S. Census at http://www.bls.census.gov/cps/ads/1995/sglosary.htm.

Thus it is important to review these issues with an experienced bankruptcy attorney in determining qualification for a chapter 7 or chapter 7 bankruptcy case.

Fifth Circuit Allows Deduction for Transportation Ownership for Debtor with No Loan Payment

Justin Gillman — Wed, 24 Jun 2009 18:14:13 +0000

A continuing issue in consumer bankruptcy cases in Chapter 7, 11 and 13, is the manner in which automobile expenses are treated in the calculation of “current monthly income”. As with many aspects of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), practitioners and Courts have struggled with the question of determining the treatment of automobile expenses under the Code. This is a particularly important issue in some cases in which the deduction is crucial to determining whether a debtor can file a Chapter 7 Bankruptcy case without the “presumption of abuse”.

On June 10, 2009, the Fifth Circuit Court of Appeals ruled that a Chapter 7 Debtor could claim the deduction and expense for transportation even if the Debtor used vehicles which were not subject to loans or leases. See Opinion at http://www.ca5.uscourts.gov/opinions%5Cpub%5C08/08-60953-CV0.wpd.pdf

The Fifth Circuit noted the two basic approaches courts have followed: (1) the “plain language approach”, which allows the vehicle ownership deduction even if the debtors have no monthly payment associated with the vehicle, and (2) the “IRM approach,” which does not. Adopting the “plain language” approach, the Court followed the lead and opinion of the Seventh Circuit on this issue. See Ross-Tousey v. Neary (In re Ross-Tousey), 549 F.3d 1148 (7th Cir. 2008).

The Fifth and Seventh Circuits are the only two Circuit Courts to rule on this issue. At the present time, there is no opinion in the Third Circuit which addresses this issue for bankruptcy cases in New Jersey.

Where is a Bankruptcy Case filed in New Jersey?

Justin Gillman — Fri, 19 Jun 2009 12:38:49 +0000

A common question we get is “where will my case be filed”? Bankruptcy cases arise from the Federal Bankruptcy Code and therefore are heard and prosecuted in Federal Courts. In legal terms, this is called “jurisdiction”.

“Venue” is the legally proper place where a particular case should be filed or heard. The Federal Code provides that a Bankruptcy Case (or as it states in the Code, “a case under Title 11″), under any of the Chapters, may be commenced in the district “in which the domicile, residence, principal place of business in the United States, or principal assets in the United States” of the individual or corporate debtor has been located during the 180 days immediately proceeding the bankruptcy filing. There are other provisions in the Federal Code that give a debtor latitude in certain circumstances to file a case in other locations, if, for example, a new case is to be filed by an affiliate of a corporate debtor who has already filed in a particular district.

Cases which are filed in New Jersey, are filed in the venue of the U.S. Bankruptcy Court for the District of New Jersey. The New Jersey Bankruptcy Courts are is divided into three (3) units or vicinages. These vicinages are located in the federal courthouses in Newark, Trenton, and Camden.

New Jersey Local Bankruptcy Rules govern the assignment of cases. Although a debtor has a right to file a bankruptcy case in any of these vicinages, the Court can transfer a case if it finds that the matter is more properly heard in another vicinage. Generally though, the assignment of a case is based on the county in which the debtor resides (if the debtor is an individual or married couple) or the address where a corporate debtor has its principal place of business in New Jersey. The Local Rules divide the assignment of cases as follows:

1. The Newark vicinage consists of Bergen, Essex, Hudson, Morris, Passaic, Sussex and Union Counties.

2. The Trenton vicinage consists of part of Burlington (except for the townships of Cinnaminson, Delran, Edgewater Park, Evesham (Marlton), Maple Shade, Moorestown, Mount Laurel, Palmyra, Riverside and Riverton), Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset and Warren counties.

3. The Camden vicinage consists of Atlantic, part of Burlington (the townships of Cinnaminson, Delran, Edgewater Park, Evesham (Marlton), Maple Shade, Moorestown, Mount Laurel, Palmyra, Riverside and Riverton), Camden, Cape May, Cumberland, Gloucester and Salem counties.

Over the years, the Courts in the District have changed the assignment of cases by modifying the Local Rules.

Thus, even in what would appear to be a simple matter as the location of the filing of a bankruptcy petition, an individual, married couple, or corporation, should review the location (venue and assignment) of a potential bankruptcy filing with an attorney experienced in these matters. This blog and site provide information about the law designed to help users educate themselves about their own legal needs. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Checklist: Tax Planning for Individuals filing Chapter 7, Chapter 13, or Chapter 11 Bankruptcy

Justin Gillman — Wed, 17 Jun 2009 14:17:32 +0000

The following is a short checklist of Tax Planning and Practice Strategies which may be followed by an attorney for an Individual considering the filing of a Chapter 7, Chapter 13, or Chapter 11 Bankruptcy.

1. Whether to File a Bankruptcy Case?

The first question to be reviewed is whether a bankruptcy filing of any kind is best for the individual. (Note: When discussing individuals, this is meant to include one person or a married couple filing a joint bankruptcy case.). Issues such as the treatment of outstanding taxes in the case, whether an individual is able to repay the necessary amounts through the case, and whether the cost associated with the case is worth the benefit to be received. For example, if an individual is unable to payoff a tax obligation in a Chapter 13 bankruptcy case in the required time, they may be better served with an Offer in Compromise with the IRS.

2. When to File?

The timing of the filing of a Bankruptcy Petition can be crucial in tax issues. One of many examples is the ability of a bankruptcy debtor to discharge certain unsecured taxes. Unsecured income taxes that were first due more than three (3) years before the bankruptcy case was filed, for which a timely and non-fraudulent return was filed, can be discharged in full in any chapter of bankruptcy. Therefore, before filing such a case, the individual and attorney should review whether the return was timely filed and whether the tax has been “due and owing” for more than three years.

3. Where to File?

Although it is rare for individuals to have choices in New Jersey as to where their case is filed, in some limited examples, individuals may have the ability to file in more than one jurisdiction and should review the relative benefits of filing in each venue.

4. Which Chapter of the Bankruptcy Code Under Which to File?

This is often the most important decision for individuals and often involves reviewing all of the financial circumstances, past, present, and future, with counsel.

5. What must be accomplished before filing a Bankruptcy Case?

Since the bankruptcy code generally requires that tax returns which are due be filed prior to the filing of the Petition, individuals should review their past tax filings and confirm that all returns are filed. If returns remain due, there should be immediate planning to have the returns filed as soon as possible.

This blog and site provide information about the law designed to help users educate themselves about their own legal needs. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Update on New Jersey Foreclosure Mediation and Bankruptcy Debtors

Justin Gillman — Mon, 15 Jun 2009 15:52:03 +0000

The New Jersey Bankruptcy Court issued the following press release regarding the New Jersey Foreclosure Mediation Program and Bankruptcy Debtors. The information may also be viewed at http://www.njb.uscourts.gov/notice/2009_02_04_foreclosure.pdf.

Information for Bankruptcy Debtors and Others Concerning The New Jersey Judiciary Foreclosure Mediation Program

The New Jersey Judiciary Foreclosure Mediation Program is a new state supported program that combines the efforts of the State Judiciary, the Office of the Attorney General, the Housing Mortgage Finance Agency in the Department of Community Affairs, the Public Advocate, the Department of Banking and Insurance, and Legal Services of New Jersey. The Program seeks to resolve the growing number of foreclosure actions in the state by encouraging work-out and payment arrangements between distressed borrowers and lenders.

Application may be made at any time after a foreclosure complaint has been filed up to the time of the sheriff’s sale by homeowners who have filed an answer and are contesting the foreclosure, as well as by homeowners who failed to appear and whose cases are currently uncontested. A request for mediation does not prevent the lender from continuing to seek a foreclosure judgment and writ, but it will stay the sheriff’s sale while mediation is pending, if the homeowner files a successful motion in state court seeking a stay.

The filing of a bankruptcy case is not a bar to acceptance in this program, whether the case is actively pending, the debtor has received a discharge, or the case has been dismissed. Effective May 18, 2009 the Bankruptcy Court for the District of New Jersey has entered a General Order Clarifying that Participation in the New Jersey Judiciary Foreclosure Mediation Program Does Not Violate the Automatic Stay. Per the terms of this General Order, participation by debtors and mortgagees in the Foreclosure Mediation Program does not violate the automatic stay of actions or proceedings against the debtor under 11 U.S.C. § 362(a) in any way. The parties are not required to obtain relief from the automatic stay in order to participate in the Foreclosure Mediation Program.

Interested parties should reference the General Order and its governing provisions in full concerning the rights of Bankruptcy Debtors and Mortgagees who choose to participate in the New Jersey Judiciary Foreclosure Mediation Program. It is also important to note that Debtors who choose to participate under the terms of this General Order must meet all of the qualifications for the Program.

To qualify for the free mediation program,

! The applicant must be the owner-occupant of a 1-3 family residential property;

! The property must be his/her primary residence;

! The applicant must be the borrower and the lender must be foreclosing on its mortgage loan.

The mediation proceedings will be held at the courthouse in the county of venue and the mediator’s services are free.

Certain homeowners may also qualify for free foreclosure prevention housing counseling provided by counselors certified by the Department of Housing & Urban Development (HUD) and the New Jersey Housing & Mortgage Finance Agency (NJHMFA).

For more information, please call the Foreclosure Mediation Hotline at 1-888-989-5277. Operating hours are 8:00am to 6:00pm on Monday through Friday.

Additional information is also available online at:

www.nj.gov/foreclosuremediation

www.judiciary.state.nj.us/civil/foreclosure/mediation.html

Chapter 7 and 13 Consumer Bankruptcy and Tax Returns

Justin Gillman — Fri, 12 Jun 2009 12:27:40 +0000

When the Bankruptcy Code was changed in 2005, significant changes were made to the tax return filing requirements for Chapter 7 and Chapter 13 consumer bankruptcy debtors. The changes increased the need for a Debtor and their counsel to review tax filing information before filing a Chapter 7 or Chapter 13 consumer bankruptcy case.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (which applies to bankruptcy cases filed after October 17, 2005) requires that the debtor file tax returns or transcripts with the Court. See 11 U.S.C §521 et seq. In New Jersey Bankruptcy cases, Local Rules permit this requirement to be met by forwarding the last filed tax return or the tax transcript to the Trustee in the Chapter 7 or Chapter 13 case. This must be done at least seven (7) days prior to the first date of the meeting of creditors.

In Chapter 13 bankruptcy cases in New Jersey, a particular issue arises ”for any return that is not past due as of the date of the filing of the Petition”. For example, if a Debtor files a Chapter 13 Bankruptcy Case in New Jersey on April 1, 2009, the tax returns for the tax year 2008 are not “past due” until April 15, 2009. Due to the nature of the case and the need to fix the amount of claims in the case, it is difficult to confirm the Chapter 13 Plan without the return being filed. If that same Debtor has filed a timely extension of the duty to file the return (automatically fixed at six months, see http://www.irs.gov/newsroom/article/0,,id=108542,00.html), what is to be done with the unfiled return?

11 USC §1308 requires that “if the debtor was required to file a tax return under applicable non Bankruptcy law, the debtor shall file with the appropriate tax authorities all tax returns for all taxable periods ending during the four (4) year period ending on the date of the filing of the Petition.” Subsection (b)(1)(B) provides that “for any return that is not past due as of the date of the filing of the Petition, the later of (i) the date that is 120 days of that meeting; or (ii) the date on which the return is due under the last automatic extension of time for filing that return to which the debtor is entitled and for which request is timely made in accordance with applicable non Bankruptcy law.” There is a procedure built into subparagraph (B)(2) which provides that after notice and hearing, the Court can enter an Order before the tolling of any applicable filing. If the debtor demonstrates by a preponderance of evidence that the failure to file a return as required by this subsection is attributal to circumstances beyond the control of the debtor, the Court may extend the time to file the return for either thirty (30) days or “a period not to extend after the applicable extended due date for a return described in subparagraph (2).”

Important is the use of the word “may” in this provision. The Code gives the Court discretion to extend the time. Ultimately, the decision of whether the Debtor in a Chapter 13 case should be granted time to file the return is given to the bankruptcy judge.

In a recent case, a Debtor I was representing in a Chapter 13 bankruptcy case in New Jersey had filed a timely extension but was faced with the Chapter 13 Trustee’s request that the case be dismissed for failure to file the 2008 tax return. Although we were able to argue that the case should not be dismissed, the Court fixed a date before October 15, 2009, for the return to be filed.

This is an example of how the provisions of the bankruptcy code as it applies to Chapter 13 debtors in New Jersey are often complicated and should not be reviewed without the advice and counsel of an experienced bankruptcy attorney.

Sheriff’s Sale Adjournments after filing Chapter 7 or Chapter 13 Bankruptcy in New Jersey

Justin Gillman — Tue, 09 Jun 2009 10:00:14 +0000

When a Chapter 7 or a Chapter 13 Bankruptcy is filed and a Sheriff’s Sale of a property is scheduled, New Jersey Law does not necessarily require that the mortgage company cancel the Sheriff’s Sale. Instead, the Plaintiff may adjourn the sale to a later date. The bankruptcy code does require that the Plaintiff cannot proceed with the Sheriff’s Sale of the New Jersey Property.

This procedure was allowed in a Third Circuit Decision. In Taylor v. Slick, 178 F.3d 698 (3rd Cir. 2000), the Court allowed that a Plaintiff could adjourn the Sheriff’s Sale while the Bankruptcy Case is pending.

Where a lawyer represents a Debtor in Chapter 7 or Chapter 13 Bankruptcy in New Jersey, the attorney should clarify whether a HUD Letter regarding notice of the new Sale date may be sent to the Debtor while the Bankruptcy case is pending, without notice to the attorney, or whether such letter would be subject to the appropriate sanction pursuant to 11 U.S.C. §362.

This case shows the need that anyone who is faced with a foreclosure in New Jersey and considering a Chapter 7 or Chapter 13 Bankruptcy case should consult with an attorney who is experienced in these matters.

Case Highlights Importance of a “Complete” List of All Creditors in Chapter 13 or Chapter 7 Bankruptcy

Justin Gillman — Mon, 08 Jun 2009 15:52:08 +0000

The Bankruptcy Code requires that a Bankruptcy Petition, whether it be a Chapter 7 or Chapter 13 Bankruptcy (or any other Chapter), include a complete list of all debts owed at the time of the filing of the Bankruptcy Petition. In addition to the requirements of the Code, it is very important that a Petition contain a complete list to provide notice and best protect the Debtor from future collection efforts and to avoid future costs and time associated with addressing the claims of creditors who allege failure of service.

In Chapter 7 “no-asset” bankruptcy cases, the Third Circuit has held that where the Debtor inadvertently fails to list a debt owed to a creditor in the Chapter 7 case, the discharge issued to that debtor is effective against inadvertently unlisted creditors. See Judd v. Wolfe, 78 F.3d 110 (3d Cir. 1996).

However, a recent Chapter 13 case in Indiana shows why the failure to list a creditor may affect a case. In In re Monix, Case No. 04-66312 JPK (Bankr. N.D. Ind., Feb. 12, 2009), Bankruptcy Judge J. Philip Klingeberger denied a Chapter 13 Bankruptcy Debtor’s request to re-open a case to add an additional unsecured pre-petition creditor(s) which Debtors somehow failed to list and schedule. The Court held that as Code § 1328(a) provides for a discharge of only those debts provided for by a plan, it was axiomatic that a creditor that did not receive notice of a debtor’s Chapter 13 case was not provided for by the plan and therefore not discharged.

This case is but one of many examples of the importance of a Debtor fully reviewing their Chapter 7 or Chapter 13 Bankruptcy Petition before it is filed with the Court.

What Debt Collectors Can and Cannot Do?

Justin Gillman — Wed, 27 May 2009 14:03:30 +0000

People who are experiencing serious debt problems face many difficult decisions. If they feel that they are unable to pay their creditors and debt, they may face the difficult choice of whether to consider a Chapter 7 or Chapter 13 Bankruptcy. These difficult decisions are often exacerbated by constant, harassing phone calls from debt collectors.

The Fair Debt Collection Practices Act (FDCPA) is Intended to Protect Consumers from Abusive Practices by Debt Collectors.

A debt collector MAY NOT:

Contact a third party about your debt for any purpose other than to locate you.
Identity the debt collection company name to a 3rd party without being expressly asked.
Disclose to a third party a debt is allegedly owed.
Communicate with a single third party more than once.
Communicate or or attempt to communicate with you at inconvenient times or places.
Contact you at work after being told not to.
Communicate with you after receiving a letter from you (a) with a request they cease and desist all contacts or (b) that you refuse to pay the debt.
Engage in harassing, oppressive or abusive conduct.
Use or threaten violence or other criminal means, or use obscene or profane language.
Cause your telephone to ring repeatedly or continuously.
Use false, deceptive, or misleading representations or methods, including but not limited to (a) falsely representing it is affiliated with the United States or any State; (b) falsely representing the character, amount, or legal status of the debt; (c) falsely representing or implying that nonpayment would result in arrest or imprisonment or the seizure, garnishment, attachment, or sale of property or wages; (d) threatening to take an action against that cannot be legally taken or that was not actually intended to be taken; (e) falsely representing or implying that you committed a crime; or (f) communicating or threatening to communicate false or likely false credit information.
Use unfair or unconscionable means in an attempt to collect a debt, including but not limited to: (a) trying to collect an amount not expressly authorized by the debt agreement/contract or other applicable law; (b) threatening to or actually depositing a postdated check prior to the date on such check; or (c) taking or threatening to take money or property where there was no present right.
Continue to contact you after receiving your cease and desist or request for validation letter.
Force you to pay the debt prior to expiration of your 30 day right to dispute.
Sue you except in the county you signed the contract, you live or own property that is the subject of the debt.
Falsely represent themselves as attorneys.

A debt collector MUST:

Provide the notices required by 15 USC § 1692g either in the initial communication with you or in writing within 5 days after.
Notify you in the initial communication it is “an attempt to collect a debt and any information obtained would be used for that purpose.”
Notify you during each collection contact the communication was from a debt collector
Disclose the caller’s individual identity in every telephone call to you.

Despite the protections which are available under this and other State and Federal Laws, those encountering debt problems, debt collection, and debt collectors, or considering a Chapter 7 or Chapter 13 Bankruptcy Case should consult with an attorney experienced in these matters regarding their rights.

Under Pennsylvania Law Anti Modification Provision of Section 1322(b)(2) Does Not Prevent Mortgage Modification Where Mortgagee’s Security Interest in Mobile Home Was Additional Collateral

Allen Gillman — Thu, 14 May 2009 15:39:48 +0000

The issue presented to the Court in Jordan v. Greentree Consumer Disc. Co. (In re Jordan), 2009 Bankr. LEXIS 583, 42-43 (Bankr. W.D. Pa. Mar. 27, 2009) was whether the an Section 1322(b)(2) of the United States Bankruptcy Code prevented the debtors from the modification of the mortgage on their home. The debtors argued the mortgagee had taken a security interest in their mobile home and that therefore the additional collateral for the loan placed it outside the protection of Section 1322(b)(2) which prohibits the modification of mortgages secured only by the debtors principal residence.

The mortgagee Greentree contended “that the Mobile Home must be considered real property rather than personal property under Pennsylvania law because the Jordan’s intended to attach it permanently to the Smithfield Property, thus making Greentree’s entire claim one secured by a security interest in real property that is the Debtors’ personal residence”.

In finding that the mobile home was additional collateral and therefore placed the debtors loan outside the anti-modification provisions of Section 1322(b)(2), the Court found that the mortgagees, who had the burden of proof, had not meet that burden and that proofs of claim filed by the mortgagee which were contrary to its argument were judicial admissions. The decision of the Court principally relied upon Scarborough v. Chase Manhattan Mortgage Corp., 461 F.3d 406 (3d Cir. 2006), where the Third Circuit made clear that “the critical moment” for deciding this very issue is… when the creditor takes a security interest in the collateral. ‘It is at that point in time that the underwriting decision is made and it is therefore at that point in time that the lender must know whether the loan it is making may be subject to modification in a Chapter 13 proceeding at some later date. Scarborough at 412.

“Section 1322(b)(2) continues to contain a “real property only” requirement notwithstanding the addition of Section 101(13A) to the Bankruptcy Code. See n. 9, 11, above. In other words, BAPCPA did not effect a change in the law whereby security interests in mobile homes are automatically protected, regardless of the surrounding circumstances, by the anti-modification provision of Section 1322(b)(2). The Court thus finds that the majority view is the correct one and adopts it.

Citing previous decisions the Court found the under “Pennsylvania law and found that chattels used in connection with real estate fall into one of three classes: (1) those which are manifestly furniture, which always remain personalty; (2) those which are so annexed to the property that they cannot be removed without material injury to the real estate, which are always realty; and, (3) those which, although physically annexed to the realty can be removed without materially injuring either the chattels themselves or the realty, which can become part of the realty or remain personalty depending on the intention of the parties at the time of annexation. See 321 B.R. at 681 (citing Clayton v. Lienhard, 312 Pa. 433, 167 A. 321 (1933)).

“In support of their argument, the Jordan’s point out that the Note and Mortgage documents separately refer to the land and the Mobile Home and clearly state that Conseco (Greentree’s predecessor in interest) was at that time granted a mortgage on the land and a security interest in the Mobile Home. Further, the Jordan’s claim and Greentree does not dispute, that they did not actually take possession of the Mobile Home until a few months after executing these documents. They argue that the language from the Note and Mortgage clearly indicates an intention for a mortgage to be placed on the real estate and a separate security interest to attach to the personal property. When those documents were signed, they argue, is the “critical moment” for determining the applicability of Section 1322(b)(2). They also argue that it is significant that the Mobile Home was not even specifically identified at the time of the loan document execution and, in fact, was not acquired by them until several months later. As a result of all the foregoing, the Jordan’s claim that the Mobile Home can only be classified as personalty, not real property. Finally, the Jordan’s argue that even if the Court were to look at the Nowlin factors, the same conclusion should be reached since only the first factor (common ownership of land and mobile home) would support a finding of realty in this case.”

The debtors argument relied upon In re Wilson, 895 F.2d 123 (3d Cir. 1990), which they claim stands for the proposition that the subjective intent of the parties is irrelevant for purposes of Section 1322(b)(2). They also direct this Court to Scarborough v. Chase Manhattan Mortgage Corp., 461 F.3d 406 (3d Cir. 2006), where the Third Circuit made clear that “the critical moment” for deciding this very issue is… when the creditor takes a security interest in the collateral. ‘It is at that point in time that the underwriting decision is made and it is therefore at that point in time that the lender must know whether the loan it is making may be subject to modification in a Chapter 13 proceeding at some later date’. Scarborough at 412 (quoting In re Bulson, 327 B.R. 830, 846 (Bankr. W.D. Mich. 2005)).”

“[It] is important to keep in mind that Greentree bears the burden of proof to show that its claim falls within the anti-modification protections afforded by Section 1322(b)(2). See In re Picht, 396 B.R. 76, 79 (Bankr. D. Kan. 2008); In re Petrella, 230 B.R. 829, 832 (Bankr. N.D. Ohio 1999); In re Larios, 259 B.R. 675, 678 (Bankr. N.D. Ill. 2001). Thus, it is up to Greentree to convince the Court that its claim is secured only by real property. If Greentree fails in this regard, the Court must find in favor of the Jordan’s on this issue.

The Court concludes that this question is properly analyzed under the law of judicial admissions. “[J]udicial admission” is an admission made by a party in pleadings, stipulations and the like. In re Pittsburgh Sports Assocs. Holding Co., 239 B.R. 75, 81 (Bankr. W.D. Pa. 1999). An unequivocal judicial admission is binding on the party who made it for the purposes of the case in which it is made. Id. A judicial admission is to be distinguished from an evidentiary admission, for example, a statement made outside the pending litigation that is inconsistent with a position being taken in the pending litigation and which is admissible but not conclusive. See, e.g., Matter of Cont’l Airlines, Inc., 125 B.R. 415, 417 (Bankr. Del. 1991).

The Court concludes that the “statement” by Greentree in the Proofs of Claim regarding the nature of the collateral is a judicial admission, not simply an evidentiary admission. It is well-recognized that the filing of a proof of claim is analogous to the filing of a complaint in a civil action. In re Arnott, 388 B.R. 656, 658 (Bankr. W.D. Pa. 2008). If this were just a contested matter involving an objection to Greentree’s claim there is no doubt that the statements in the Proofs of Claim would be judicial admissions.

Even though this case is decided in Pennsylvania, the case points toward the options which may be available to a Debtor in a Chapter 13 bankruptcy case in attempting to propose a modification of mortgage obligations. It is extremely important to note the effect of the proofs of claim filed in chapter 13 bankruptcy cases and the arguments to be used by a debtor and their counsel.