Author Archives: NCBRC

No Compelled Title Transfer for Surrendered Property. But . . .

A debtor may not require a secured creditor to take title to surrendered property. However, the creditor’s failure to object to the transfer of title may be construed as acceptance of the deed. In re Rose, No. 12-40743 (Bankr. W. D. N.C. July 8, 2014). The issue came before the court on the debtors’ motion […]

Inadvertence as Subjective/Objective Question in Judicial Estoppel Analysis

In the context of judicial estoppel, courts are divided on the issue of whether, for purposes of analyzing the defense of mistake or inadvertence, a plaintiff’s subjective intent matters. Several recent cases touch on this issue.

Debtors Enjoying Growing Consensus on Chapter 20 Lien Strip Cases

Following closely on the heels of the Eleventh Circuit decision in In re Scantling, the BAP for the Sixth Circuit held that chapter 20 debtors may strip liens despite the unavailability of discharge. In re Cain, No. 13-8045 (July 14, 2014).

Eviction Is Violation of Stay even after Pre-Petition Foreclosure Sale

A debtor’s possessory interest in property sold through foreclosure is sufficient to support a cause of action for violation of the automatic stay even though that interest may have been insufficient to withstand a motion for relief from stay. Eden Place v. Perl (In re Perl), No. 13-1328 (B.A.P. 9th Cir. May 30, 2014).

Filing of Stale Claims in Bankruptcy Violates FDCPA

Addressing what it termed a “deluge that has swept through U.S. bankruptcy courts,” the Eleventh Circuit took on the question of “whether a proof of claim to collect a stale debt in Chapter 13 bankruptcy violates the Fair Debt Collection Practices Act (“FDCPA” or “Act”). 15 U.S.C. §§ 1692−1692p (2006). Based on the broad language […]

Claim Forms Available in Ocwen Settlement

In December, 2014, Ocwen Financial Corporation and Ocwen Loan Servicing entered into a consent order with 49 States and the District of Columbia to provide $2 billion in principal reduction to underwater borrowers and provide $125 million to foreclosure victims as a result of Ocwen’s systemic misconduct at every stage of the mortgage servicing process. […]

Circuit Split on Undistributed Funds at Time of Conversion

Relying on policy and equity considerations, the Fifth Circuit found that funds paid into a plan but not yet distributed at the time of conversion should be distributed to creditors. Viegelahn v. Harris (In re Harris), No. 13-50374 (5th Cir. July 7, 2014) (disagreeing with In re Michael, 699 F.3d 305 (3d Cir. 2012)).

New York AG Settles with Usurious Lenders

In January, 2014, New York Attorney General Erik T. Schneiderman announced that his office had reached a settlement with Western Sky Financial, CashCall, WS Funding, and their owners for violations of New York’s usury and licensed lender laws in connection with personal loans made over the internet. The usurious loans were made at interest rates […]

Parties’ Agreement to Extend Time Not Binding

An agreement between the debtor and a creditor to extend the deadline for filing an adversary complaint seeking denial of discharge under section 727 will not stand against later challenge on the basis of untimeliness where the extension was never ordered by the bankruptcy court. Shahrestani v. Alazzeh (In re Alazzeh), No. 13-1350 (B.A.P. 9th […]

Creditor’s AP Amendment Denied Due to Delay

The creditor waited too long to amend his adversary complaint and, therefore, the bankruptcy court’s denial of the motion to amend was not an abuse of discretion. Zullo v. Lombardo (In re Lombardo), No. 13-9004 (1st Cir. June 13, 2014). The case involved an apprentice plumber (Debtor) who passed himself off as a master, did […]