New York businessman Jose Sandy Buco says federal courts dismissed his bankruptcy cases without resolving his challenges to creditor claims involving three properties he sought to protect. Buco alleges that those claims relied on incomplete financial records, questionable ownership documentation, and potentially fraudulent evidence concerning the debts and amounts owed.
Paris F. Dube, a litigation support consultant with E2E Solutions Group, LLC and a paralegal with more than 30 years of experience, examines court records and publicly records documents to identify inconsistencies and unresolved questions. “In Buco’s cases, the question is whether the bankruptcy courts correctly applied the law when relying on disputed creditor claims to determine his eligibility for bankruptcy protection,” Dube said.
“The same bankruptcy judge dismissed two separate bankruptcy cases involving disputed creditor claims. Both decisions are now under appellate review. The important question is whether the governing law was correctly applied in each case, particularly when the underlying validity and amounts of those claims remained unresolved,” Dube said.
On October 30, 2025, U.S. District Judge Margaret M. Garnett dismissed Buco’s appeal, leaving intact a bankruptcy court determination that his debts exceeded Chapter 13 eligibility limits. Buco maintains that the calculation included claims he had challenged as “false, fraudulent, and forged.”
“The judges never let me present my evidence,” he told Black Star News. “I was denied my day in court.”
This article continues Black Star News’ series of articles covering Buco’s litigation.
Buco filed for Chapter 13 protection on April 9, 2024, seeking to restructure his debts and protect properties he says were threatened by claims supported by incomplete and allegedly fraudulent evidence. The combined debt limit applicable when he filed was $2.75 million.
Chapter 13 Trustee Thomas C. Frost sought dismissal on eligibility grounds. At a September 16, 2024 hearing, Bankruptcy Judge Philip Bentley determined that Buco had approximately $6.4 million in noncontingent, liquidated debts. The written dismissal order was entered September 23.
Buco says the dismissal prevented an October 17 hearing at which he intended to contest the proofs of claim—the documents creditors file to state the debts and amounts they contend are owed.
“Why would Judge Bentley set a date for me to prove that the POCs were false, fraudulent, and forged, then cancel it and side with the trustee?” Buco asked. “I thought a judge was supposed to be neutral.”
Both Judge Garnett and Judge Bentley did not respond to previous inquiries by Black Star News seeking comment.
According to the hearing transcript quoted in Black Star News’ earlier reporting, Bentley said the claims included documents establishing the debts’ balances and that they arose before the bankruptcy filing. He also stated: “The debtor has not objected to those proofs of claim and therefore, they’re deemed valid.”
Buco disputes that statement, saying his objections were already on the docket. “This is completely false,” Buco said. “My objections were filed, and the judge himself scheduled the October 17 hearing.”
Federal bankruptcy law provides a process for debtors to object to creditor claims. Buco filed objections, and hearings were scheduled. However, his bankruptcy case was dismissed before those hearings took place.
In a July 2025 order, Bentley acknowledged that the bankruptcy court had not adjudicated the underlying validity of the disputed creditor claims. He maintained, however, that those debts could still be counted under Section 109(e) of the Bankruptcy Code when determining Buco’s eligibility for Chapter 13 protection.
Dube, who has assisted Buco with research and litigation support, says the distinction between disputing a debt and establishing its legal effect is central to the case.
“Filing an objection does not automatically prevent a bankruptcy court from determining eligibility,” Dube said. “What interests me is how the court applied Section 109(e) to the documented facts in two separate bankruptcy cases, particularly when the amounts being relied upon were disputed at the time.”
After dismissal, Buco sought reconsideration and later moved to vacate the ruling. Bentley addressed the latter request at a June 12, 2025 hearing and entered a written order denying relief on July 15, 2025. Buco filed a notice of appeal on June 26, 2025, challenging the denial of post-dismissal relief. On July 23, Garnett denied his emergency request to halt a foreclosure sale.
In dismissing the appeal that October, Garnett explained that disputing a debt does not, by itself, make it contingent or unliquidated for Chapter 13 eligibility purposes. She concluded that Buco’s fraud allegations did not overcome the eligibility determination and rejected his remaining constitutional and misconduct arguments as insufficient.
Buco maintains that this reasoning left his underlying evidence untested.
Buco appealed Garnett’s decision to the U.S. Court of Appeals for the Second Circuit. His appeal challenges the bankruptcy court’s reliance on disputed debt amounts when determining Chapter 13 eligibility before adjudicating his objections.
Buco filed a second Chapter 13 bankruptcy case in July 2025. Bentley again found him ineligible under Section 109(e), but also dismissed the case for bad faith and prohibited another bankruptcy filing for two years. Buco appealed that decision to the federal district court, where the appeal remains pending.
Buco maintains that the courts have never resolved two fundamental questions: Does the foreclosing party have the legal right to enforce the mortgage, and has the amount allegedly owed been established through complete, reliable evidence? Buco sought interim relief in state court concerning the foreclosure sale scheduled for November 10, 2026, while his separate bankruptcy appeals remained pending in federal court. Those appeals did not automatically stay the foreclosure.
For Buco, this raises a constitutional concern that goes beyond the outcome of either bankruptcy appeal. He questions whether the opportunities he has been given to challenge the evidence satisfy his constitutional right to due process, particularly when the loss of his home may occur before appellate review is complete.
The courts are entrusted with ensuring that legal procedures are followed and that parties are held accountable to the evidence and the law. But what happens when a homeowner continues asking the courts to examine the evidence supporting the loss of his home while foreclosure moves forward before those challenges are resolved?
For Buco, that question is no longer theoretical. His home was scheduled for foreclosure sale on November 10, 2026.
