Posted by NACBA - July 19th, 2019
- In an adversary discharge proceeding, can the bankruptcy court treat a motion for summary judgment (that asserts a new affirmative defense) as a motion to amend an answer? (Bankr. S.D.N.Y.)
- Can a chapter 7 trustee be awarded attorney’s fees incurred in defense of the trustee’s fee application? (Bankr. D.Colo.)
- Does a bankruptcy court have the authority to extend the time to file a dischargeability complaint on a motion filed after the deadline? (Bankr. N.D.Ga.)
- Does a pre-petition default judgment operate as collateral estoppel in a non-dischargeability complaint for fraud in bankruptcy? (Bankr. E.D.Mich.)
- Post-filing, can a mortgage company postpone scheduled nonjudicial foreclosure sales (rather than dismiss the action) without violating the automatic stay? (Bankr. D.Ut.)
To read the case outlines and opinions click here.
Posted by NCBRC - July 17th, 2019
City had no obligation under the
automatic stay to take affirmative action to rescind a warrant for the debtor’s
arrest or to issue a letter of compliance to the state, where the City had
taken no post-petition action to enforce the warrant, and the debtor was not in
compliance with the court order to pay a traffic fine. Edwards v. City of
Ferguson, No. 18-6032 (B.A.P. 8th Cir. July 3, 2019).
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Posted by NCBRC - July 9th, 2019
Debts based on overpayments to debtors
for government welfare benefits are not non-dischargeable domestic support obligations.
Dennis v. Illinois Dept. of Human Serv., Nos. 18-2899, 18-2952 (7th Cir.
June 27, 2019).
Chapter 13 debtor, Devan Dennis entered
bankruptcy owing the Illinois Department of Human Services for overpayments
under the state Child Care Assistance Program. Chapter 7 debtor, Tyeane
Halbert, owed the DHS for overpayments of her SNAP benefits. The bankruptcy court
rejected the DHS’s argument that the overpayments were non-dischargeable domestic
support obligations under section 507(a)(1)(B) and DHS appealed.
NACBA filed an amicus brief on
behalf of the debtors.
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Posted by NCBRC - July 8th, 2019
Type: Amicus
Date: March 28, 2019
Description: Whether debt based on overpayment of SNAP benefits is non-dischargeable domestic support obligation
Result: Affirmed, June 27, 2019.
Posted by NACBA - June 26th, 2019
It’s going to
be a bad opinion when the judge brings up Pandora’s Box in the beginning of the
opinion and titles the last section of the opinion “This Is The End.”
On
June 25, 2019 the Bankruptcy Court for the Southern District of Florida, in a
172 page opinion (including attachments), suspended an attorney from practice for
two years before the Bankruptcy Court, terminated her CM/ECF privileges, referred
the attorney to District Court’s attorney review committee and the Florida Bar
with recommendations to disbar, and referred the attorney to the United States
attorney for investigation.
The
Debtor filed a chapter 7 bankruptcy. He
was represented by the Attorney. Neither
Debtor nor Attorney attended the 341 meeting.
Subsequently the trustee filed an
adversary objecting to the Debtor’s discharge pursuant to 11 U.S.C. §
727(a)(2), (3), and (4). The bases of
the Trustee’s complaint were that Debtor’s schedules indicated virtually no
detail, were not consistent with other documents the trustee received (tax
returns), and that required information was apparently missing (missing
lawsuit). In addition, the Trustee cited
Debtor’s and Attorney’s failure to attend the 341 meeting. When asked by the Trustee, the Attorney said
they didn’t plan on proceeding and wanted the case dismissed.
Two days after the adversary was filed, Attorney moved to withdraw as counsel for Debtor. The Debtor, now pro se, stated to the Trustee that the schedules were not provided to him prior to filing and that he did not sign the schedules that were actually filed.
To read more click here.
Posted by NCBRC - June 25th, 2019
Rule 8006(g) states a mandatory
requirement that a party seeking direct appeal file a petition in support. Failure
to do so, if properly invoked by the opposing party, is cause for dismissal. In
re Wade, No. 18-2564 (7th Cir. June 14, 2019).
This case came to the Seventh Circuit
on certification of direct appeal by the bankruptcy court to address the scope
of section 362(c)(3)(A), which, in the case of successive petitions, lifts the
automatic stay after 30 days with respect to property of the debtor. The Wades’
previous attorney, Kreisler Law, P.C., filed a lien against Ms. Wade’s
residence while the Wades’ second bankruptcy was pending and the Wades sought
sanctions for violation of the automatic stay. The bankruptcy court determined
that the stay was no longer in effect when the lien was filed and denied the motion
for sanctions. Recognizing, however, that courts have disagreed as to the meaning
of the phrase “with respect to the debtor,” in section 362(c)(3)(A), the bankruptcy
court certified the Wades’ appeal to the Seventh Circuit.
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Posted by NACBA - June 21st, 2019
Case Bites issues:
- If service of an adversary complaint is not completed until 21 days after the Clerk issues the summons, and no response is filed, can a Court sua sponte deny a request for entry of default judgment for improper service?
- Can a chapter 13 Trustee avoid the claim of a creditor who did not perfect its security interest until after a chapter 13 is filed?
- Are negative procedural rulings against a party grounds to recuse the bankruptcy judge for bias?
- What is the standard to challenge a trustee’s decision to settle litigation?
- Can a motion for sanctions under Rule 11 be dismissed as untimely if filed after final adjudication of the offending pleading or motion?
To read more click here.
Posted by NACBA - June 20th, 2019
On June 19, 2019 the 7th Circuit Court of Appeals affirmed the decisions of the lower bankruptcy courts.
In four chapter 13 bankruptcies, the City of Chicago impounded vehicles owned by the Debtors for failure to pay multiple traffic fines. After the Debtors filed chapter 13, the City refused to return the vehicles claiming they needed to maintain possession to continue their perfection on them and wouldn’t return the vehicles until the fines were paid.
The bankruptcy courts held that the City violated the automatic stay by exercising control over the vehicles, that no exceptions applied, and ordered the return of the vehicles and sanctions. The City appealed and the 7th Circuit consolidated the appeals in this case.
The Debtors were represented in part by NACBA members John Wonais of the Semrad Law Firm, and Eugene Wedoff. NACBA member Tara Twomey supported the Debtors by filing an amici curiae brief for NACBA and the National Consumer Bankruptcy Rights Center. NACBA member David Yen filed an amicus curiae brief for the Legal Assistance Foundation.
To read more click here.
Posted by NCBRC - June 19th, 2019
In a bad-facts-make-bad-law
situation, the Southern District of New York affirmed the denial of student
loan discharge where the chapter 7 debtor sought to have his religious contributions
deducted from his income, and, unfortunately, in so holding, the district court
went beyond the bankruptcy court holding to add some unpleasant dicta of its
own. In re Lozada, No. 18-11643 (S.D.N.Y. June 12, 2019).
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Posted by NCBRC - June 11th, 2019
Where the debtor was not deprived
of the opportunity to fully participate in the state court proceedings, there
was no “extrinsic fraud” and his bankruptcy court challenge to the state court judgment
was barred by the Rooker-Feldman doctrine. Reyes v. Kutnerian (In re Reyes),
No. 18-1229 (B.A.P. 9th Cir. April 19, 2019) (unpublished).
