Posted by NCBRC - March 4th, 2015
After making plan payments for fifty-eight months, the debtors’ chapter 13 was dismissed due to infeasibility that was built into the confirmed plan. Schlegel v. Billingslea (In re Schlegel), No. 14-1132 (B.A.P. 9th Cir. Feb. 25, 2015). Read More
Posted by NCBRC - February 27th, 2015
NACBA has filed an amicus brief seeking affirmance of the Eleventh Circuit decisions in the consolidated cases of Bank of Amer. v. Toledo-Cardona, No. 14-163 and Bank of Amer. v. Caulkett, No. 13-1421 (filed Feb. 23, 2015), adding its voice to the discussion of lien stripping in chapter 7 cases. The brief, authored by David R. Kuney, argues that section 506(a) values liens according to the worth of the collateral, and section 506(d) renders liens void to the extent that they have no value. The Supreme Court ruling in Dewsnup v. Timm, 502 U.S. 410 (1992), prohibiting strip-down of partially secured liens has been improperly extended to find that wholly unsecured liens cannot be stripped off in chapter 7. In Dewsnup the Court took pains to make clear that its decision was limited to the facts before it. The brief asks the Court to reconsider, or at least limit, its holding in Dewsnup to the extent that it turns on whether the underlying claim has been disallowed rather than on whether the lien is supported by value. The brief urges the Court to adhere to the reasoning in Nobelman v. American Sav. Bank, 508 U.S. 324 (1993) and United States v. Ron Pair Enter., Inc. 489 U.S. 235 (1989) ,which confirm that the starting point for treatment of secured claims is section 506(a). The “statutory and constitutional authority to modify, extinguish or avoid secured debts, even without full payment of the face amount of the debt, is in harmony with the economic reality that a lien is only as valuable as the collateral that underlies it.”
CaulkettToledoCardona SCt NACBA brief
Posted by NCBRC - February 23rd, 2015
Equitable considerations weighed in favor of the debtors where, two years after their chapter 7 discharge, a creditor sought to reopen the bankruptcy in order to allow the trustee to administer a district court UCC claim that the debtors filed post-discharge. In re Pinks, No. 12-317 (Bankr. D. S.C. Jan. 21, 2015). Read More
Posted by NCBRC - February 19th, 2015
In re McCoy, , a case that should have been relegated to the realm of judicial outliers has instead advanced another step through the circuit courts. First it toppled the Tenth Circuit in In re Mallo, 2014 WL 7360130 (10th Cir. Dec. 29, 2014), and now the First Circuit has likewise found that a late-filed Massachusetts state income tax return does not constitute a “return” for dischargeability purposes under section 523(a). Fahey v. Mass. Dept. of Rev., No. 14-1328; Perkins v. Mass Dept. of Rev., No. 14-1350, Gonzalez v. Mass. Dept. of Rev. No. 14-9002; Brown v. Mass. Dept. of Rev. No. 14-9003 (February 18, 2015). Read More
Posted by NCBRC - February 18th, 2015
The debtors have filed their brief in the consolidated Supreme Court cases of Bank of Amer. v. Toledo-Cardona, No. 14-163 and Bank of Amer. v. Caulkett, No. 13-1421 (filed Feb. 17, 2014), addressing the issue of whether a wholly unsecured lien can be stripped off in chapter 7. In McNeal v. GMAC Mortg., 735 F.3d 1263 (11th Cir. 2012) cert. pet. den. (S.Ct. May 20, 2014), the court bucked the trend to find that Dewsnup v. Timm, 502 U.S. 410 (1992), which held that a partially secured lien could not be stripped-down in chapter 7, did not apply to wholly unsecured liens. In Toledo-Cardona and Caulkett, the debtors argue that McNeal was correctly decided. Dewsnup was explicitly limited to its facts and the Supreme Court’s instruction in Nobelman v. Am. Sav. Bank, 508 U.S. 324 (1993), to begin analysis with lien valuation under section 506(a) supports the Eleventh Circuit’s position that valueless liens may be stripped off under section 506(d).
There are currently at least one dozen petitions for certiorari before the Supreme Court on this issue filed by Bank of America and Bank of New York Mellon.
The debtor is represented by Stephanos Bibas, the Director of the Supreme Court Clinic at the University of Pennsylvania Law School.
Toledo-CardonaCaulkett debtor brief
Posted by NCBRC - February 16th, 2015
The Eighth Circuit found that the debtor’s individual retirement annuity funded by a lump sum rollover contribution from his IRA was properly exempted from his chapter 7 bankruptcy estate. Running v. Miller (In re Miller), No. 13-3682 (8th Cir. Feb. 13, 2015). Read More
Posted by NCBRC - February 13th, 2015
The debtor filed for chapter 13 relief after having received a discharge in chapter 7 less than one year earlier. During her chapter 7 she neither reaffirmed the non-purchase money loan secured by her truck nor redeemed it. In her chapter 13 she sought to pay the debt secured by the truck, as well as other debt. The lender objected to confirmation of the plan and sought relief from stay to exercise its rights against the truck. The court denied the motions by the trustee and confirmed the debtor’s plan. In re Francis, No. 14-42974 (Bankr. N.D. Tex. Jan. 7, 2015). Read More
Posted by NCBRC - February 11th, 2015
Contrary to majority opinion, proceeds of a lump sum workers’ compensation settlement were found to be exemptible under section 522(d)(11)(E), to the extent necessary for support of the debtor and his dependents. In addition, a Medicare “set aside” is not property of the estate. Carr v. Arellano (In re Arellano), No. 14-990 (Bankr. M.D. Pa. Jan. 5, 2015). Read More
Posted by NCBRC - February 6th, 2015
While a trustee has leeway to compromise an avoidance claim under bankruptcy law, he does not have the right to change the terms of an avoided mortgage to make it more marketable for sale or settlement. In re Dupuis, No. 12-30380 (Bankr. D. Mass. Jan. 8, 2015). Read More
Posted by NCBRC - February 4th, 2015
The bankruptcy court abused its discretion when it refused to reopen the debtor’s chapter 7 case to permit him to amend his schedules to claim his homestead exemption and seek avoidance of judicial liens. Ludvigsen v. Osborne (In re Ludvigsen), No. 14-39 (B.A.P. 1st Cir. January 16, 2015). Read More