In re Peterson

1

In re: RENEE PETERSON, Debtor. In re: KIMYA DAWN CRAWFORD,

Nos. 19-24045, 19-24551

United States Bankruptcy Court, D. Maryland, Baltimore

June 1, 2022

Chapter 7

MEMORANDUM OPINION

STEPHEN C. ST. JOHN UNITED STATES BANKRUPTCY JUDGE

These matters are before the Court upon the Order Directing Upsolve to Show Cause and Verify That the Assistance It Provides to Debtors in This District Complies with Applicable Law (hereinafter, "Order to Show Cause"), entered on January 17, 2020.^[1] The Court conducted an evidentiary hearing on August 18, 2021, at which counsel for Upsolve, Inc. (hereinafter, "Upsolve") and the Assistant United States Trustee for the District of Maryland appeared. The Court heard final arguments from counsel for Upsolve and the Assistant United States Trustee on September 22, 2021. At the conclusion of the September 22, 2021 hearing, the Court requested briefing from the parties on the issue of exemption selection. Counsel for Upsolve timely filed the requested brief on October 6, 2021. The Acting United States Trustee for Region Four, by the Assistant United States Trustee, filed a statement on October 7, 2021 advising that no response would be filed to the brief filed by Upsolve. On October 20, 2021, the Court advised the parties by letter that the matter would be taken under advisement. This Court has jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 157(b) and 1334(b) and Local Rule 402 of the United States District Court for the District of Maryland. Venue is proper pursuant to 28 U.S.C. §§ 1408(1) and 1409(a). This Memorandum Opinion constitutes the Court's findings of fact and conclusions of law.

I. PROCEDURAL HISTORY

A. In re Renee Peterson

Renee Peterson ("Ms. Peterson"), proceeding without legal counsel, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code on October 21, 2019. In re Peterson, ECF No. 1, at 1-7. With her voluntary petition, Ms. Peterson filed the following documents: Summary of Your Assets and Liabilities and Certain Statistical Information; Schedules A-J, inclusive; Declaration About an Individual Debtor's Schedules; Statement of Financial Affairs for Individuals Filing for Bankruptcy; Verification of Matrix; List of Creditors; and a document entitled “Declaration of Pro Se Assistance.” Id. at 8-48; ECF No. 1-1, at 1. Simultaneous with her petition, Ms. Peterson filed her Statement About Your Social Security Numbers (ECF No. 2); Certificate of Credit Counseling (ECF No. 3); Chapter 7 Statement of Your Current Monthly Income (ECF No. 4); Statement of Intention for Individuals Filing Under Chapter 7 (ECF No. 5); and Application to Have the Chapter 7 Filing Fee Waived (ECF No. 6).

On her Schedule A/B, Ms. Peterson listed the following assets and accompanying values:

Car, described as “2007 Chevrolet Colbalt [sic] with 45, 396 miles in ‘fair condition'”

$1, 850.00

Household goods and furnishings, described as “bed, bedding, chairs, cooking utensils, couch, eating utensils, microwave, picture frames, and towels”

$1, 000.00

Electronics, described as “smartphone and TV”

$500.00

Firearms, described as “for protection”

$100.00

Clothes, described as “all clothes and footwear”

$200.00

Jewelry, described as “wedding/engagement ring”

$500.00

Non-farm animal, listed as “dog”

$50.00

Cash

$20.00

Deposits of money in the form of a checking account and a savings account, both at M&T Bank

$0.00 for both accounts

Retirement or pension account, denoted as a 401(k) or similar plan and described as “Janney Montgomery Scott LLC”

$2, 000.00

Security deposit on rental unit with Cherish Smith

$1, 300.00

Interest in an insurance policy with Reliance Standard, indicating her husband is the beneficiary

$0.00

Total of all property on Schedule A/B

$7, 520.00

In re Peterson, ECF No. 1, at 10-19.

Ms. Peterson's Schedule C indicated that she was "claiming state and federal nonbankruptcy exemptions" pursuant to 11 U.S.C. § 522(b)(3). Id. at 20. Schedule C reflected the following exempted assets, the assets' values, the amounts of the claimed exemptions, and the law allowing the exemption for each asset:

Exempted Asset

Current Value

Exemption Amount

Statute(s)^[2]

Household goods

$1, 000.00

$1, 000.00

§§ 11-504(b)(4) & 11-504(b)(5)

Electronics

$500.00

$500.00

§§ 11-504(b)(5) & 11-504(f)(1)

Firearms

$100.00

$100.00

§§ 11-504(b)(5) & 11-504(f)(1)

Clothes

$200.00

$200.00

§§ 11-504(b)(5) & 11-504(f)(1)

Jewelry

$500.00

$500.00

§§ 11-504(b)(5) & 11-504(f)(1)

Personal animals

$50.00

$50.00

§ 11-504(b)(4)

Cash

$20.00

$20.00

§ 11-504(b)(5)

Automobile

$1, 850.00

$1, 850.00

§§ 11-504(b)(5) & 11-504(f)(1)

M&T Bank

$0.00

$0.00

§§ 11-504(b)(5) & 11-504(f)(1)

M&T Bank

$0.00

$0.00

§§ 11-504(b)(5) & 11-504(f)(1)

Janney Montgomery Scott LLC

$2, 000.00

$2, 000.00

11 U.S.C. §§ 522(d)(10) & 522(d)(12)

Cherish Smith

$1, 300.00

$1, 300.00

§§ 11-504(b)(5) & 11-504(f)(1)

Insurance Plan

$0.00

$0.00

§§ 11-504(b)(5) & 11-504(f)(1)

See ECF No. 1, at 20-21. Additionally, Ms. Peterson indicated on her Schedule C that she was not claiming a homestead exemption of more than $170, 350.00. Id. at 20.

Ms. Peterson answered the following questions regarding assistance she received related to filing bankruptcy in the negative:

. Page 7, Voluntary Petition: Did you pay or agree to pay someone who is not an attorney to help you fill out your bankruptcy forms? See id. at 7

. Declaration About an Individual Debtor's Schedules: Did you pay or agree to pay someone who is NOT an attorney to help you fill out bankruptcy forms? See id. at 34

. Question 16, Statement of Financial Affairs for Individuals Filing for Bankruptcy: Within 1 year before you filed for bankruptcy, did you or anyone else acting on your behalf pay or transfer any property to anyone you consulted about seeking bankruptcy or preparing a bankruptcy petition? See id. at 41.

. Question 17, Statement of Financial Affairs for Individuals Filing for Bankruptcy: Within 1 year before you filed for bankruptcy, did you or anyone else acting on your behalf pay or transfer any property to anyone who promised to help you deal with your creditors or to make payments to your creditors? See id. at 42.

. Part 12, Statement of Financial Affairs for Individuals Filing for Bankruptcy: Did you pay or agree to pay someone who is not an attorney to help you fill out bankruptcy forms? See id. at 46.

. Question 17, Application to Have the Chapter 7 Filing Fee Waived: Have you paid anyone for services for this case, including filling out this application, the bankruptcy filing package, or the schedules? See In re Peterson, ECF No. 6, at 3.

. Question 18, Application to Have the Chapter 7 Filing Fee Waived: Have you promised to pay or do you expect to pay someone for services for your bankruptcy case? See id.

. Question 19, Application to Have the Chapter 7 Filing Fee Waived: Has anyone paid someone on your behalf for services for this case? See id.

Marc H. Baer, Esquire, was appointed Chapter 7 Trustee in Ms. Peterson's case. In re Peterson, ECF No. 7. The Chapter 7 Trustee filed his Report of No Distribution on January 9, 2020, indicating that there was no estate property available for distribution to creditors beyond that which Ms. Peterson exempted. In re Peterson, ECF No. 13. The Court granted Ms. Peterson's discharge on July 7, 2020. In re Peterson, ECF No. 54.

B. In re Kimya Dawn Crawford

Kimya Dawn Crawford ("Ms. Crawford"), who, like Ms. Peterson, was unrepresented by legal counsel, filed her voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code on October 31, 2019. In re Crawford, ECF No. 1, at 1-7. Ms. Crawford filed a number of documents with her petition: Summary of Your Assets and Liabilities and Certain Statistical Information; Schedules A-J, inclusive; Declaration About an Individual Debtor's Schedules; Statement of Financial Affairs for Individuals Filing for Bankruptcy; Verification of Matrix; and List of Creditors. Id. at 8-56. Ms. Crawford also filed with the Court, contemporaneously with her petition, her Chapter 7 Statement of Your Current Monthly Income (ECF No. 2); Statement About Your Social Security Numbers (ECF No. 3); Certificate of Credit Counseling (ECF No. 4); Statement of Intention for Individuals Filing Under Chapter 7 (ECF No. 5); Application for Individuals to Pay the Filing Fee in Installments (ECF No. 6); Initial Statement About an Eviction Judgment Against You (ECF No. 7); and a document with the title "Declaration of Pro Se Assistance" (ECF No. 8).

Ms. Crawford listed several assets and accompanying values on her Schedule A/B:

Household goods and furnishings, described as “bed, bedding, chairs, cooking utensils, couch, eating utensils, picture frames, and towels”

$500.00

Electronics, described as “smartphone and TV”

$500.00

Clothes, described as “all clothes and footwear”

$500.00

Jewelry, described as “bracelet, earrings, and non-wedding ring”

$100.00

Cash

$100.00

Deposits of money, listed as:

Checking account, Wells Fargo

$0.00

Checking account, WoodForest Bank

$3.00

Saving account, Wells Fargo

$0.00

Checking account, Money Lion

$100.00

Retirement or pension account, denoted as a 401(k) or similar plan and described as “Wells Fargo”

$0.00

Security deposit on rental unit with Jagar McGill

$1, 900.00

Total of all property on Schedule A/B

$3, 703.00

In re Crawford, ECF No. 1, at 10-20.

On her Schedule C, Ms. Crawford indicated that she was "claiming state and federal nonbankruptcy exemptions" pursuant to 11 U.S.C. § 522(b)(3). Id. at 21. Schedule C reflected Ms. Crawford's exemptions for each of the assets listed in Schedule A/B, as well as the assets' values, the amounts of the exemptions, and the...