Author Archives: NCBRC

Ninth Circuit BAP Addresses Impact of Fulton

The Supreme Court’s decision in City of Chicago v. Fulton, 141 S. Ct. 585 (2021), effectively overruled Ninth Circuit precedent to the effect that a creditor has an affirmative obligation to return pre-petition funds to a debtor even if those funds are held by a third party. Therefore, when the creditor here stayed its garnishment […]

Tax Foreclosure Sale Avoidable

The county’s tax foreclosure sale of the debtor’s real property was avoidable as a fraudulent conveyance, and the debtor’s annuity was properly excluded from the calculation of the debtor’s insolvency for avoidance purposes where the creditor failed to object to the debtor’s claim of exemption with respect to the annuity. DuVall v. County of Ontario, […]

Debtors Cannot Avoid Tax Lien or Reap Benefits of Trustee’s Avoidance of the Lien

Where tax liens are specifically excepted from the debts to which a debtor’s exempt property cannot be liable, the debtors here could not exercise the trustee’s avoidance powers under section 522(h) to avoid their tax debt, nor could they benefit from the trustee’s successful avoidance action. Hutchinson v. IRS, No. 19-60065 (9th Cir. Oct. 19, […]

Refund of Mortgage Double Payment to Trustee

An overpayment resulting from the debtor’s mistakenly making mortgage payments while the chapter 13 trustee was making the same payments through the plan was properly remitted to the trustee for distribution rather than being returned to the debtor. White v. Regions Bank, No. 20-5355 (6th Cir. Sept. 30, 2021) (unpublished).

Post-Discharge Litigation Violates Discharge Injunction

The appellants were liable for willful violation of the discharge injunction when they pursued post-discharge state litigation and garnishment based on pre-petition conduct even though the debtor could have but did not raise the discharge as a defense in the state litigation. Morgan v. Morgan, No. 20-291 (D. Utah Oct. 25, 2021).

Appreciation Is Part of Converted Chapter 7 Estate

Post-petition appreciation in a chapter 13 case becomes part of the chapter 7 estate upon conversion. In re Castleman, No. 19-12233 (Bankr. W. D. Wash. June 4, 2021). When the debtors filed for chapter 13 bankruptcy their residence was valued at $500,000. At the time of conversion of the case to chapter 7, the property […]

Notification to State Tax Board of Federal Tax Reevaluation is Return “Equivalent”

The Ninth Circuit affirmed the opinion of the bankruptcy appellate panel finding that a state-mandated notification to the state taxing authority of a change in the taxpayer’s federal taxes is a “return, or equivalent report or notice,” which, if not filed by the taxpayer, renders the state tax debt nondischargeable under section 523(a)(1)(B). Berkovich v. Cal. […]

No Mortgage Modification for Mixed Use Property

The chapter 11 debtor could not modify her residential mortgage even though much of the property securing the mortgage was used for income-producing purposes. Lee v. U.S. Nat’l Bank Ass’n, No. 20-222 (M.D. Ga. Oct. 4, 2021). The debtor’s residence was located on forty-three acres of land of which she rented out approximately thirty-five acres […]

Asset Must Be on Schedules to Satisfy 554(c) Abandonment Requirement

Finding that its “task is to interpret the Bankruptcy Code, ‘not to balance the equities,’” the Ninth Circuit held that section “554(c) requires property to be disclosed on a literal schedule, and thus that, absent Trustee or court action, property disclosed only on a statement (e.g., the Statement of Financial Affairs) cannot be abandoned under […]

PHH Mort. Corp. v. Sensenich (In re Gravel), Nos. 20-1, 20-2, 20-3 (2d Cir.)

Type: Amicus Date: September 24, 2021 Description: Whether mortgage creditor committed sanctionable conduct when it engaged in “fee harvesting” practice. Result: Pending Gravel Amicus Sept 2021