Author Archives: NCBRC

Funds Fraudulently Transferred Pre-Conversion Are Recoverable by the Chapter 7 Trustee

Funds fraudulently transferred during a chapter 13 case remain in the debtor’s “constructive possession” and become part of the chapter 7 estate upon conversion. Brown v. Barclay, No. 18-60029 (9th Cir. March 23, 2020). The chapter 13 debtor received an inheritance while in bankruptcy which he divided between himself and his three brothers without notifying […]

First-In First-Out Applies to Commingled Account

The Bankruptcy Court correctly used the first-in first-out approach to determine how much of a commingled account could be attributed to exempt funds. Tydings v. Reed (In re Tydings), No. 20-4057 (W.D. Mo. Sept. 3, 2020). After her husband died, the chapter 7 debtor received surviving widow’s social security benefits which she deposited into her […]

Texas District’s Treatment of Tax Refund In Chapter 13 Invalidated

Finding that it encroached on a below-median debtor’s substantive rights, the Fifth Circuit invalidated a local form chapter 13 plan provision that required all debtors to turn over any tax refund in excess of $2,000. Diaz v. Viegelahn, No. 19-50982 (5th Cir. Aug. 26, 2020). NCBRC filed an amicus brief on behalf of the NACBA […]

10th Circuit – Student Loan Not Excepted from Discharge as Educational Benefit

An educational benefit is not a student loan for nondischargeability purposes under section 523(a)(8)(A)(ii). McDaniel v. Navient Solutions, LLC, No. 18-1445 (10th Cir. Aug. 31, 2020). When the debtors filed their chapter 13 petition, they had many outstanding student loans including six private educational loans held by Navient totaling approximately $107,000 (the Loan). The trustee […]

Social Security Benefits May Be Considered for Abuse under 707 and Good Faith under 1325

A debtor’s social security income is a proper factor to consider in an abuse analysis under section 707(b)(3)(B) and in a good faith analysis under section 1325(a)(3). Meehean v. Vara (In re Meehean), No. 20-10380 (E.D. Mich. Aug. 18, 2020). When they filed their chapter 7 petition, debtors listed $5,842 in monthly income ($4,007 in […]

Standing to Bring Claims in State Court Relating to Estate Property

The Bankruptcy Appellate Panel for the Tenth Circuit found that the bankruptcy court erred when it declined to exercise its exclusive jurisdiction to determine whether state causes of action raised by investors in the debtor’s pre-bankruptcy Ponzi scheme belonged to the Debtor’s bankruptcy estate: an issue which the panel found was “central to whether the […]

9th Circuit Equates Lease Assumption with Waiver of Discharge

The Ninth Circuit found that a debtor who assumes a lease under Section 365(p) of the Bankruptcy Code waives her right to discharge of debt arising out of that lease. Bobka v. Toyota Motor Credit Corp., No. 18-55688 (9th Cir. Aug. 3, 2020). The debtor filed her chapter 7 petition in 2016. She had an ongoing […]

Bobka v. Toyota Motor Credit Corp., No. 18-55688 (9th Cir.)

Type: Amicus Date: July 31, 2018 Description: Whether chapter 7 debtor who assumes vehicle lease under section 365(p) waives his right to discharge. Result: Affirmed August 3, 2020 Bobka 9th Cir Aug 2020 Bobka NACBA amicus

Great Decision on Judicial Estoppel

In a lengthy decision addressing a challenge to its order reopening the debtor’s chapter 13 case, a Bankruptcy Court for the District of South Carolina found that the debtor had no duty under the Bankruptcy Code or Rules to disclose a lawsuit that accrued and was filed post-confirmation. In the face of a judicial estoppel […]

Lienholder May Seek Value for Post-Discharge Release of Lien

The discharge injunction does not prohibit a lienholder from seeking value for release of its lien so long as, under the specific facts of the case, its conduct is not an improper attempt to coerce repayment of the discharged debt. Bentley v. OneMain Financial Group, No. 19-8026 (B.A.P. 6th Cir. July 8, 2020).