Posted by NCBRC - December 21st, 2016
An IRS 1099-A Form sent post-foreclosure by the mortgagee and misstating that the debtors were personally liable on the mortgage debt, was not an attempt to collect a debt in violation of the discharge injunction. Bates v. CitiMortgage, Inc.,– F.3d – , 2016 WL 7229754 (1st Cir. Dec. 14, 2016). Read More
Posted by NCBRC - June 28th, 2016
The Missouri Department of Social Services did not violate the discharge injunction by collecting on a debt that the bankruptcy court had deemed fully satisfied through the debtors’ successful completion of their chapter 13 plan. Missouri Dept. of Soc’l Serv. v. Spencer, No. 15-6030 (B.A.P. 8th Cir. June 13, 2016).
Michael and Patricia Spencer filed a chapter 13 bankruptcy petition in which they listed a domestic and child support debt owed by Mr. Spencer to his ex-spouse. The Missouri Division of Child Support Enforcement (Division) filed a proof of claim on behalf of Mr. Spencer’s ex-spouse in the amount of approximately $36,000.00. Upon discovering that it had miscalculated the domestic support debt, the Division amended the proof of claim to over $88,000.00. When the Spencers objected to the amended proof of claim the bankruptcy court held a hearing and found that the original proof of claim was the one that should be allowed. The Division did not appeal this decision or object to confirmation of the plan providing for repayment of the original claim, nor did it object to discharge upon the debtors’ successful completion of their plan. After the discharge order was entered, the Division filed a withholding order with Mr. Spencer’s employer to collect past-due domestic support. Mr. Spencer moved the bankruptcy court for an order of contempt and sanctions. The bankruptcy court the Division willfully violated the discharge order and awarded sanctions and attorney’s fees. Read More
Posted by NCBRC - June 2nd, 2016
The secured creditor violated the discharge injunction when it misapplied plan payments and then claimed default and late charges post-discharge. Scott v. Caliber Home Loans, 2015 WL 9986691, No. 09-11123, Adv. Proc. No. 14-1040 (Bankr. N.D. Okla. July 28, 2015).
When Patricia J. and Michael A. Scott filed their chapter 13 petition, the predecessor to Caliber Home Loans filed a claim for $180,527.66 with an arrearage of $19,073.96 and ongoing monthly payments of $1,414.19. The Scotts’ plan included paying off their mortgage arrears and maintaining their mortgage payments to Caliber. They made all their plan payments and prior to discharge, Caliber filed a Notice of Post-Petition Mortgage Fee, Expenses, and Charges of $2,061.82. The Scotts paid that amount through the plan. One month before discharge Caliber filed its Statement in Response to Notice of Final Cure Payment stating the debtors had cured the mortgage arrears and were current on their mortgage payments. The debtors received their discharge in March, 2014, and the trustee sent his Notice of Final Cure on April 21, 2014. On May 1, 2014, Caliber mailed a statement to the Scotts stating that they were delinquent in the amount of $3,139.97 for past due monthly payments and uncollected “Late Charges.” Caliber sent a notification that the Scotts were in default and that it had the right to undertake collection action including foreclosure. 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 - November 10th, 2015
Discharge of the credit card debts did not render the arbitration clause of the credit card agreement unenforceable and, where the clause was valid and not in conflict with the Code, the credit card companies’ motion to compel should have been granted. Belton v. GE Capital Consumer Lending Inc., No. 15-1934, consolidated with In re Bruce, No.15-3311 (S.D. N.Y. Oct. 14, 2015). Read More
Posted by NCBRC - September 1st, 2015
A post-discharge debt repayment agreement violated the discharge injunction because it was neither voluntary nor supported by new consideration. Venture Bank v. Lapides, No. 14-3085 (8th Cir. Aug. 25, 2015).
Posted by NCBRC - July 30th, 2015
Filing a proof of claim for a deficiency judgment that was discharged in a previous bankruptcy violates the discharge injunction. Green Point Credit v. McLean, No. 14-14002 (11th Cir. July 24, 2015). Green Point Credit, LLC and Green Tree Servicing LLC (Green Tree) filed a proof of claim for a debt that had been discharged in the McLean’s previous bankruptcy and the McLeans filed an adversary proceeding seeking damages for violation of the discharge injunction. Four days later, Green Tree, acknowledging that the claim had been filed in error, withdrew it. The bankruptcy court found that Green Tree violated the discharge injunction and awarded compensatory damages for the McLean’s emotional distress, attorney’s fees, and a “coercive” sanction. The district court affirmed. Read More
Posted by NCBRC - October 31st, 2014
There is no private right of action for violation of the discharge injunction but a debtor may move for contempt in the main bankruptcy case. An abuse of process action, however, may be brought in an adversary proceeding and be established by repeated use of protected personally identifiable information of debtors to file unenforceable proofs of claim in Chapter 13 cases. Moore v. Comenity Capital Bank, No. 13-11325, Adv. Pro. 14-1011 (Bankr. E.D. Tenn. Sept. 29, 2014). Read More
Posted by NCBRC - September 16th, 2014
An Alabama district court upheld a sanction award for violation of the discharge injunction based on the creditor’s filing a proof of claim in a subsequent bankruptcy. McLean v. Greenpoint Credit (In re McLean), No. 13-925 (M.D. Ala. Sept. 4, 2014). Read More
Posted by NCBRC - September 2nd, 2014
Two cases out of the Western District of Louisiana found that attorney Glay H. Collier’s fee collection practices violated sections 526, 528, 362 and 524 of the Bankruptcy Code. Wheeler v. Collier (In re Wheeler), No 11-1670 (W.D. La. May 22, 2014) and (July 17, 2014), and Patrick v. Collier (In re Patrick), No. 14-11203 (Bankr. W.D. La. July 23, 2014). Read More