In re Leitner
United States Bankruptcy Court for the District of Nebraska
221 B.R. 502 (1998)
- Written by Abby Roughton, JD
Facts
John and Betty Leitner (debtors) sought legal advice from attorney Bert Blackwell about filing for bankruptcy. Blackwell agreed to represent the Leitners in a Chapter 7 bankruptcy case and advance them the $175 filing fee. The Leitners agreed to pay Blackwell $1,100 for his representation and reimburse him for the filing fee. The Leitners promised to pay Blackwell $100 per month and granted Blackwell a mortgage on their residence to secure their obligation. The Leitners’ residence was worth $11,800 and was encumbered only by Blackwell’s mortgage. In their bankruptcy filing, the Leitners claimed the equity in their residence, less the amount of the mortgage, as an exempt homestead under Nebraska law. During the bankruptcy proceeding, the Leitners sought to reaffirm their debt to Blackwell. However, the trustee objected to approval of the reaffirmation agreement between the Leitners and Blackwell, arguing that the $100 monthly payment could impose an undue hardship on the Leitners. The Leitners then sought leave to withdraw their reaffirmation agreement. In ruling on the Leitners’ motion, the court issued guidance to attorneys representing Chapter 7 debtors.
Rule of Law
Issue
Holding and Reasoning (Minahan, J.)
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