The debtor’s student loan was “funded” by TERI, a nonprofit organization that guaranteed the loan, and was, therefore, nondischargeable under section 523(a)(8). Medina v. Nat’l Collegiate Student Loan Trust 2006-3, No. 20-1912 (S.D. Cal. April 20, 2021). Read More
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Student Loan Guaranteed by TERI Was Nondischargeable
Posted by NCBRC - May 13th, 2021
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Missed Payments to Mortgagee Do Not Preclude Discharge
Posted by NCBRC - May 10th, 2021
The debtors’ missed plan payments to the mortgage creditor were a result of forbearance and COVID 19-related financial difficulties and were therefore not an impediment to discharge under section 1328. In re McCollum, No. 15-3502 (Bankr. D. S.C. Feb. 4, 2021). Read More
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Change of Beneficiary Not Avoidable Transfer
Posted by NCBRC - May 6th, 2021
The chapter 7 debtor’s change of beneficiary in his life insurance policy from his employer to his wife was not an avoidable property transfer where the debtor retained his interest in the policy and the transfer did not diminish the bankruptcy estate. Harden v. Harrison (In re Harrison), 2021 WL 739533, No. 19-5730, Adv. Proc. No. 20-113 (Bankr. E.D. N.C. Feb. 22, 2021). Read More
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First-Time-Homeowner Tax Credit Debt Is Tax rather than Loan
Posted by NCBRC - May 4th, 2021
The debt created by the IRS’s first-time-homeowner’s tax credit, which requires a debtor to repay the credit over fifteen years, was a nondischargeable “tax” rather than a dischargeable “loan.” In re Shin, No. 17-13509 (Bankr. E.D. Va. Feb. 16, 2021).
The debtor bought a house with his mother and sister, taking the $7,500.00 first-time homeowner federal tax credit offered by the IRS. The Internal Revenue Code, sections 36(f)(1) and (7), provides that homeowners receiving the tax credit must repay that credit over fifteen years by increasing their yearly taxes. The tax recapture is automatically accelerated upon sale of the property within the fifteen-year payback period. For several years, the debtor paid the recapture tax to the IRS, but when he and his co-owners sold the house, there remained $5,000.00 in unpaid recapture tax. The debtor filed for chapter 7 bankruptcy and received a discharge. After the case was closed the debtor moved to reopen to allow him to seek a ruling that the recapture tax was discharged. The IRS opposed the motion. Read More
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Debtor May Avoid County Tax Foreclosure Sale
Posted by NCBRC - April 27th, 2021
A county’s tax sale of the debtor’s farm was avoidable as constructively fraudulent under section 548, where the debtor was insolvent at the time of the title transfer and the tax debt was substantially less than the fair market value of the property. DuVall v. County of Ontario, No.19-20179, Adv. Proc. No. 19-2011 (Bankr. W.D. N.Y. Feb. 18, 2021). Read More
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Debtor Loses the Battle but Wins the War
Posted by NCBRC - April 23rd, 2021
A confirmed plan binds the county tax creditor even though the plan did not provide for the interest claimed in its post-confirmation proof of claim where the county had notice of the plan and failed to object to confirmation. In re Bird, 624 B.R. 841 (Bankr. N.D. Ill., Feb. 2, 2021) (case no. 1:17-bk-2072). Read More
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TitleMax Can’t Have Its Cake and Eat it Too
Posted by NCBRC - April 21st, 2021
TitleMax waived its right to forfeiture under a title pawn transaction when it failed to object to treatment of the loan as a secured debt prior to confirmation of the debtor’s plan. TitleMax of Alabama v. Deakle, No. 20-335 (S.D. Ala. March 31, 2021).
Prior to filing for bankruptcy, the debtor entered into a title pawn transaction with TitleMax. The pawn matured and the grace period for redemption expired before the debtor filed her chapter 13 petition. Her proposed plan provided for payments to TitleMax as a secured creditor. TitleMax raised no objection to the treatment of the loan until three months after the debtor’s plan was confirmed. At that time, TitleMax filed a motion to “confirm termination or absence of stay.” The bankruptcy court found that, by failing to object to confirmation, TitleMax had waived the forfeiture provision of Alabama’s Pawnshop Act and was bound by the terms of the confirmed plan under section 1327(a). Read More
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Automatic Homestead Exemption Applies to Trust Interest
Posted by NCBRC - April 15th, 2021
A debtor may claim the California automatic homestead exemption with respect to property where he resides even though the property was owned by a trust created by his father and he and his brother were equal beneficiaries of the trust. In re Nolan, 2021 WL 528679, No. 20-1496 (C.D. Cal. 2021). Read More
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Fraudulent Transfer Claim Precluded by Discharge Injunction
Posted by NCBRC - April 8th, 2021
Because an action for fraudulent transfer is not merely a collection action, the creditors were precluded by the discharge injunction from pursuing their state court appeal of that action even though the predicate debt was found to be nondischargeable in the debtor’s bankruptcy. SuVicMon Dev. Inc. v. Morrison, No. 20-11681 (11th Cir. March 25, 2021). Read More
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Scotus: Three Denials and a Pending
Posted by NCBRC - April 5th, 2021
The Supreme Court recently denied cert petitions in three bankruptcy-related cases: Hull v. Rockwell, No. 20-499 (pet’n denied Feb. 22, 2021); GE Capital Retail Bank v. Belton, 20-481 (pet’n denied March 8, 2021); and Marino v. Ocwen Loan Servicing, No. 20-409 (pet’n denied March 22, 2021). Read More
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HAVEN Act Guide
The Honoring American Veterans in Extreme Need Act of 2019 (“HAVEN Act”) excludes certain benefits paid to veterans or their family members from the definition of current monthly income (“CMI”) found in the Bankruptcy Code. The HAVEN Act amends § 101(10A) of the Bankruptcy Code and supplements the 2005 amendments to the Code that excluded other government benefits, such as social security income.
This Guide provides an overview of the HAVEN Act identifies benefits that are excluded, and answers frequently asked questions.
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The only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA has more than 3,000 members located in all 50 states and Puerto Rico.O. Max Gardner Foundation, Inc.
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