Contrary to the 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…] about Lump Sum Workers’ Compensation Settlement Exempt under 522(d)(11)
Trustee May Not Reform Avoided Mortgage
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…] about Trustee May Not Reform Avoided Mortgage
Denial of Motion to Reopen to Amend Exemption Was Abuse of Discretion
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…] about Denial of Motion to Reopen to Amend Exemption Was Abuse of Discretion
Court Turns Jaundiced Eye on Wells Fargo Robo-Mischief
Wells Fargo lacked standing to assert a claim under a Note secured by a Deed of Trust, where a forged endorsement in blank did not give it “holder” status under applicable Texas law. In re Franklin, No. 10‐20010 (Bankr. S.D. N.Y. Jan. 29, 2015). [Read more…] about Court Turns Jaundiced Eye on Wells Fargo Robo-Mischief
NACBA Weighs in on Sternberg Issue
The NACBA membership has filed an amicus brief in the Ninth Circuit case of America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), No. 12-60052 (filed Jan. 23, 2015). The brief seeks reconsideration of that court’s 2010 decision in Sternberg v. Johnston, 595 F.3d 937 which limited the right to recover attorney fees to those incurred in the effort to terminate a stay violation, but not to the fees incurred prosecuting section 362(k) damage claims. [Read more…] about NACBA Weighs in on Sternberg Issue
Creditor’s Failure to Comply with Rule 3002.1(g) Is Basis for Violation of State Consumer Law
The district court denied PNC’s motion to dismiss the borrowers’ complaint for violations of California consumer protection laws and common law claims based on PNC’s foreclosure action after the plaintiffs completed their Chapter 13 plan. Sokoloski v. PNC Mortgage, No. 14-1374, 2014 WL 6473810 (E.D. Cal. Nov. 18, 2014). [Read more…] about Creditor’s Failure to Comply with Rule 3002.1(g) Is Basis for Violation of State Consumer Law
TILA Rescission Effective upon Notification
In a unanimous decision delivered by Justice Scalia, the Supreme Court held that so long as the borrower notifies the lender within three years of the transaction, his rescission is timely. Jesinoski v. Countrywide Homes, 574 U. S. ____ (2015), No. 13-684 (Jan. 13). [Read more…] about TILA Rescission Effective upon Notification
It’s Alive! – McCoy Adopted by Tenth Circuit
The Tenth Circuit has concluded that late-filed tax returns are not “returns” for dischargeability purposes unless filed by the IRS in cooperation with the debtor. Mallo v. IRS (In re Mallo), __ F.3d __, 2014 WL 7360130 (Dec. 29, 2014) (consolidated with In re Martin, 14-1488). [Read more…] about It’s Alive! – McCoy Adopted by Tenth Circuit
Sixth Circuit Reverses Denial of Amendment to Exemptions
The Sixth Circuit found that prejudice to creditors was unlikely to be a legitimate basis for denying a debtor’s motion to amend her schedules to increase her exemption claim and that even if it were a legitimate basis, the trustee failed to show the existence of such prejudice. Westry v. Lim (In re Westry), No. 14-1440 (6th Cir. Dec. 30, 2014). [Read more…] about Sixth Circuit Reverses Denial of Amendment to Exemptions
Bankruptcy Reopened to Add Insurance Proceeds to Estate
The bankruptcy court properly reopened the debtor’s Chapter 7 case to permit the trustee to administer insurance proceeds where the debtor’s interest in the funds pre-dated his bankruptcy even though he did not acquire the funds until post-discharge. Wojcik v. Gold (In re Daher), No. 14-8028 (B.A.P. 6th Cir. Dec. 4, 2014). [Read more…] about Bankruptcy Reopened to Add Insurance Proceeds to Estate