Posted by NCBRC - May 25th, 2016
“The Bankruptcy Code does not preclude an FDCPA claim in the context of a Chapter 13 bankruptcy when a debt collector files a proof of claim it knows to be time-barred.” Johnson v. Midland Funding, LLC, No. 15-11240 (11th Cir. May 24, 2016). In two separate cases, Alieda Johnson and Judy N. Brock sued debt collectors for violation of the FDCPA alleging that they used “false, deceptive, or misleading representation or means in connection with the collection of any debt” (15 U.S.C. § 1692e) when they filed proofs of claim in the plaintiffs’ bankruptcy cases for debts they knew to be time-barred. The district courts granted the debt collectors’ motions to dismiss finding that the Bankruptcy Code permits a creditor to file a proof of claim for which it has a “right to payment,” and that the FDCPA and the Code are irreconcilable. The cases were consolidated on appeal to the Eleventh Circuit. Read More
Posted by NCBRC - May 24th, 2016
Issue preclusion provided a short-cut to finding that the debtor’s liability for the costs and penalties incurred under state consumer protection laws was nondischargeable in bankruptcy under section 523(a)(6). O’Rorke v. Porcaro (In re Porcaro), No. 15-26 (B.A.P. 1st Cir. Feb. 3, 2016). Read More
Posted by NCBRC - May 12th, 2016
A post-discharge settlement based on a consent decree relating to the lender’s misconduct at the time it entered into a lending agreement with the chapter 7 debtors was property of the estate. In re Porrett, No. 09-3881 (Bankr. D. Idaho March 10, 2016).
Gary Allen and Jennifer Sue Porrett had a mortgage through Wells Fargo. They filed chapter 7 bankruptcy and Wells Fargo obtained relief from stay and foreclosed on the property. The Porretts were discharged in 2009. Two years later, Wells Fargo entered into a consent decree with federal regulators based upon Wells Fargo’s practice of pressing borrowers to take sub-prime mortgages even though they were eligible for more favorable prime loans during the period that the Porretts obtained their mortgage. Upon hearing of the consent decree the trustee moved to reopen the Porretts’ bankruptcy to compromise the claim and accept Wells Fargo’s offer of a $8,120.23 settlement. The Porretts argued that because the consent decree was entered into post-bankruptcy it was not property of the estate. The court disagreed.
Posted by NCBRC - May 5th, 2016
Section 108(b) extends the right of a debtor to redeem property sold in a tax sale. Bryant v. Hamilton Cty, No. 15-12367, Adv. Proc. No. 15-1120 (Bankr. E.D. Tenn. April 5, 2016). Read More
Posted by NCBRC - May 3rd, 2016
A reverse mortgage payable upon the pre-petition death of the borrower was modifiable under section 1322(c). In re Michaud, No. 14-23406 (Bankr. S.D. Fla. March 29, 2016). Read More
Posted by NCBRC - April 28th, 2016
In a scenario worthy of Dickens, a once-thriving family business, Ainsworth Feed Yards (AFY), was liquidated and distributed to creditors while the family members engaged in six years of legal battles with each other. In the Matter of Sears, 2016 Bankr. LEXIS 926, No. 10-40275 (Bankr. D. Neb. March 23, 2016). Read More
Posted by NCBRC - April 25th, 2016
In a succinct opinion acknowledging a split in the courts, the district court for the Southern District of Florida found that section 707(b)(1) applies to cases that are converted from chapter 13 to chapter 7. Pollitzer v. Gebhardt (In re Pollitzer), No. 15-20376 (S.D. Fla. March 23, 2016).
Posted by NCBRC - April 21st, 2016
Comparing the potential purchaser to a vulture, a bankruptcy court disapproved a sale of estate property as not passing the business judgment test. In re Pervine, 2016 Bankr. LEXIS 712, No. 13-2289 (Bankr. E.D. N.C. March 7, 2016). Read More
Posted by NCBRC - April 19th, 2016
Obligations under a Condominium Association Declaration agreement run with the land and a condominium association may rent properties surrendered in bankruptcy and apply rent monies to pre-petition assessments without violating the discharge injunction. In re Montalvo, No. 10-8338 (Bankr. M.D. Fla. Feb. 25, 2016). Read More
Posted by NCBRC - April 15th, 2016
The Eleventh Circuit applied the Beard test to the question of whether and when a late-filed tax return is a “return” for purposes of dischargeability. The court adopted the middle ground finding that timing is relevant to the issue of the debtor’s “honest and reasonable” attempt to comply with tax laws. Justice v. U.S.A., No. 15-10273 (11th Cir. March 30, 2016). Read More