In Re Williams

13 B.R. 640, 1981 Bankr. LEXIS 3176
CourtUnited States Bankruptcy Court, E.D. Washington
DecidedAugust 13, 1981
Docket19-00480
StatusPublished
Cited by7 cases

This text of 13 B.R. 640 (In Re Williams) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Williams, 13 B.R. 640, 1981 Bankr. LEXIS 3176 (Wash. 1981).

Opinion

L. WARDEN HANEL, Bankruptcy Judge.

This matter is before the Court on the Social Security Administration’s Motion to Reconsider or in the Alternative for a Stay of Execution Pending Appeal in regard to an Order issued by the Court pursuant to 11 U.S.C. § 1325(b) directing the Social Security Administration by pay part of the debt- or’s benefits directly to the Chapter 13 Trustee.

PACTS

Debtors Roy Williams and Penny Williams filed on November 26, 1980 for relief under Chapter 13, 11 U.S.C. On the Williams’ schedules listed as income were social security benefits in the amount of $1,310.00 per month. Upon representations of the Chapter 13 Trustee and pursuant to 11 U.S.C. § 1325(b) the Court signed on December 8, 1980 an “Order to Entity to Pay to the Trustee” requiring the Social Security Administration to deduct $575.00 from the debtors’ benefits and pay the same directly to the trustee. The Order was mailed by the trustee to the Social Security Administration’s Regional Office in Rich-land, California on December 8, 1980.

On May 7, 1981 the United States Attorney filed a Motion to Reconsider or in the Alternative for a Stay of Execution Pending Appeal and a hearing was had on July 20, 1981.

ISSUES

There are two issues for the Court’s determination in this matter. First, whether the Order signed by the Court directing the Social Security Administration to pay into the trustee $575.00 as provided by 11 U.S.C. § 1325(b) is void and unenforceable for lack of proper service and secondly, whether 42 U.S.C. § 407, a strong anti-assignment provision under the Social Security Act, coupled with the debtors’ ability to exempt said benefits under 522(d)(10) insulates the benefits, voiding the Court’s Order under 11 U.S.C. § 1325(b).

DISCUSSION

11 U.S.C. § 1325(b) states:

“After confirmation of a plan, the Court may order any entity from whom the debtor receives income to pay all or any part of such income to the trustee.”

This section combined with Rule 13-213 empowers the Court to direct such an order to an employer making the order enforceable as a judgment, by injunction, or contempt proceedings. It is therefore implicit that under the power of the Court pursuant to 11 U.S.C. § 105(a) this Court could and did direct that the Social Security Administration pay part of the debtors’ benefits directly to the Chapter 13 trustee.

The contention by the Social Security Administration that service was improper under the Federal Rules of Civil Procedure as adopted by the Bankruptcy Rules or in the alternative that notice should have been given prior to the issue of the Order is fully without merit.

The allegation by the Social Security Administration that the Order entered December 8, 1980 is void and unenforceable since proper service was never obtained on either the Social Security Administration or the United States under Bankruptcy Rule 13-701 presumes the posture of an adversary hearing.

An adversary hearing as prescribed by Rule 13-701(a) is as follows:

(a) Adversary Proceedings. Part VII of the Bankruptcy Rules governs any pro *642 ceeding instituted by a party before a bankruptcy judge in a Chapter XIII case to (1) recover money or property other than a proceeding under Rule 13-210 or Rule 13-602, (2) determine the validity, priority, or extent of a lien or other interest in property, (3) sell property free of a lien or other interest for which the holder can be compelled to take a money satisfaction, (4) object to or revoke a discharge, (5) obtain an injunction, (6) obtain relief from a stay as provided in Rule 13-401, (7) object to confirmation of a plan on the ground that the debtor has committed any act or failed to perform any duty which would be a bar to the discharge of the bankrupt, (8) revoke the confirmation of a plan, or (9) determine the dischargeability of a debt. Such a proceeding shall be known as an adversary proceeding.
(b)Reference in Bankruptcy Rules. As applied in Chapter XIII cases, the reference in Bankruptcy Rule 704(f)(2) to Rule 220 shall be read as a reference to Rule 13-210, the reference in Bankruptcy Rule 725 to Rule 221(b) shall be read as a reference to Rule 13-211(b), and the reference in Bankruptcy Rule 741 to “a complaint objecting to the bankrupt’s discharge” shall be read to include also a reference to “a complaint objecting to the confirmation of a plan on the ground that the debtor has committed any act or failed to perform any duty which would be a bar to the discharge of a bankrupt.”

Upon inspection of Rule 13-701(a) the Court fails to see the similarity of the cause of actions specified therein to 11 U.S.C. § 1325(b). 11 U.S.C. § 1325(b) speaks only to the issuance of an order by the Court and is not an adversary as classified under Rule 13-701(a). Service, therefore as required under Rule 704 is not necessary nor proper and mailing the order was correct under the circumstances.

In the alternative the Social Security Administration urges this Court that if service of process was not required then notice under Rules 203(g) and 13-203(d) was at least minimal. Rule 13-203(d) is a verbatim incorporation of 203(g).

Rule 13-203 states:

NOTICE TO CREDITORS AND THE UNITED STATES
(a) Ten-Day Notices to Ali Creditors. Except as provided in subdivision (e) of this rule, the court shall give all creditors including creditors secured by estates in real property or chattels real, at least 10 days’ notice by mail of (1) a meeting of creditors and (2) the hearing on confirmation of a plan.
(b) Other Notices to All Creditors.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Willis v. Cruse (In Re Samford)
125 B.R. 230 (E.D. Missouri, 1991)
In Re Baxter
34 B.R. 911 (E.D. Tennessee, 1983)
In Re Greene
27 B.R. 462 (E.D. Virginia, 1983)
Toson v. United States
18 B.R. 371 (N.D. Georgia, 1982)
In Re B. D. International Discount Corp.
15 B.R. 755 (S.D. New York, 1981)

Cite This Page — Counsel Stack

Bluebook (online)
13 B.R. 640, 1981 Bankr. LEXIS 3176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-williams-waeb-1981.