Seth David Rebner

OCR transcription for search; preserved printed pages are authoritative

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U.S. Bankruptcy Court
District of Idaho

Filed: May 14, 2004
At: 10:00 a.m.

By: Sylvia Wirth a

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF IDAHO

In Re:
Bankruptcy Case
SETH D, REBNER, No. 04-00976

Debtor.

MEMORANDUM OF DECISION

On May 10, 2004, Creditor R.C. Willey Financial Services filed a
Reaffirmation Agreement (the “Agreement”), which had apparently been executed
by Creditor and by Debtor Seth Rebner on April 22, 2004. Docket No. 6, The
Agreement was forwarded by the Clerk to the undersigned bankruptcy judge for

review, with a request from Creditor that an order approving the Agreement be

MEMORANDUM OF DECISION - 1

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entered by the Court. See L.B.R. 4008.1. Based upon the record in this case and
the documents submitted by Creditor, the Court declines to enter such an order.

A copy ofa sales invoice was attached to the Agreement. It
evidences that, in July 2003, Debtor purchased the following household goods
from R.C. Willey for the amounts indicated: washer —~ $229.99; dryer - $259.95;
television - $429.99; DVD player — $99.99; air conditioner — $99.95; and a
cocktail table — $229.99, for a total of $1,349.86. Creditor financed the purchase.

According to the Agreement, when Debtor filed for Chapter 7
bankruptcy relief on March 22, 2004, Debtor owed Creditor $2,013.26 on this
contract. In the Agreement, Creditor agrees to allow Debtor to retain the goods if
Debtor pays Creditor $1,129.00, together with 21% interest, in 33 monthly
payments of $45.00 each. Creditor apparently agreed to accept this reduced
amount because, according to the Agreement, it represents 93% of the original cost
of the washer and dryer, and 80% of the original cost of the other items. The
approach taken by Creditor in establishing the amount of the debt to be reaffirmed
by Debtor is consistent, in the Court’ experience, with the many other

reaffirmations submitted for approval by Creditor over recent months, even years.

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On the basis of the information submitted, the Court declines to
accept that the amount of the reaffirmation, in this case $1,129.00, in any way
represents a reasonable or good faith estimate of the fair market value of the
households goods subject to Creditor’s lien. There is nothing m the Agreement to
suggest the goods were appraised. The values used are inconsistent with the
values placed on the goods, as near as the Court can tell, by Debtor in his
schedules, although some of the goods are not even listed in the schedules.’
Realistically, households goods purchased nearly a year ago, and presumably used
by Debtor in his home thereafter, would have significantly depreciated in value,
presumably much more than either the 7% suggested by Creditor as to the washer
and dryer, or even the 20% for the other goods. Therefore, without more
evidence, the Court cannot in good conscience conclude it is in Debtor’s best
interests to reaffirm and pay this debt, with its considerable interest rate, over the

next three years. Unless Creditor either reduces its values to a reasonable level, or

1 Debtor has obviously agreed to pay the values set forth in the Agreement, and
Debtor’s counsel has “signed off’ on the Agreement certifying that Debtor’s decision was
an informed one. However, the Court exercises independent judgment in deciding
whether to approve such arrangements. The Court doubts Debtor is financially capable of
litigating with Creditor over such small amounts. Moreover, the Court doubts a debtor’s
attorney is motivated to withhold his consent in such cases, given Creditor’s option,
however illusory, of reclaiming the goods, and the volume of bankruptcy cases in which
Creditor is involved in this District.

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supports its opinions of value with an independent third-party appraisal or other
competent evidence submitted at a hearing before the Court, the undersigned
hereby declines to approve the Agreement.’

Therefore, Creditor shall be allowed twenty-one (21) days from the
date hereof within which to substantiate the values set forth in the Agreement as
discussed above. Failing to do so, the Court will enter an order denying approval
of the Agreement without further notice.

DATED This 14" day of May; 2094.

JTIMD.PAPPAS ~~ |

CHIEF U.S. BANKRUPTCY JUDGE

* While, of course, the Court will review any proposed reaffirmation submitted for
approval based upon the record and facts of each individual case, as noted above, it is the
Court’s opinion that Creditor frequently over-values its collateral in reaffirmation
agreements. By taking this approach, Creditor taxes the resources of the Court and
Clerk’s staff, and impairs the credibility of Creditor’s value estimates. If the practice
continues, the Court will be compelled to require additional proof of the accuracy of the
suggested values in each case before the reaffirmation can be approved.

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CERTIFICATE OF SERVICE

I, the undersigned, hereby certify that | served by the method
indicated below, a true copy of the document to which this certificate is attached,
to the following named person(s) at the following address(es), on the date shown
below:

Office of the U.S. Trustee

jeff. ¢ howe(@usdo].gov
gary.meclendon@usdo.. gov

Richard Crawforth
rerawforth@cableone.net

Via Email

Michael Schindele, Esq.
P. O. Box 1990
Boise, [daho 83701

Jake Peterson, Esq.
1215 W. Hays Street
Boise, Idaho 83702

Via U.S. Mail

Note re E-mail service: A ".pdf" version of the above decision/order was electronically transmitted to the
parties indicated above, Email service is provided as a courtesy only upon request of a party. To review
an electronic image of the original of this document, or to subscribe for cmail service of fiture
decisions/orders from the Bankruptcy Judges, please access the Court's Internet web site,

www. id Uscourts. gov.

CASE NO.; 04-00976 CAMERON §. BURKE, CLERK
U.S. BANKRUPTCY COURT

DATED: May 14, 2004 By/Sylvia (AOE uty Clerk

MEMORANDUM OF DECISION - 5