Author Archives: NCBRC

Panel Affirms Reduced Attorney Fees

The bankruptcy court did not abuse its discretion in reducing the chapter 7 bankruptcy attorney’s fees in two cases in which the attorney charged an additional $500 to clients due solely to their electing to pay his fees post-petition rather than up front. Ridings v. Cassamatta (In re Allen), No. 20-6023 (B.A.P. 8th Cir. June […]

Absolute Right to Dismiss v. Bad Faith

Section 1307(b) grants debtors an absolute right of dismissal which is not limited by the court’s inherent power to punish bad faith conduct. Nichols v. Marana Stockyard & Livestock Market, No. 20-60043 (9th Cir. Sept. 1, 2021). After the debtors filed their chapter 13 petition, they were indicted on a scheme to defraud the Marana […]

Retroactive vs Prospective Relief from Stay

The bankruptcy court erred when it denied prospective relief from stay based on the same analysis it used when it denied the mortgage creditor’s retroactive annulment of stay motion. Wilmington Savings Fund Soc’y v. Fairbanks, No. 21-1019 (B.A.P. 9th Cir. Aug. 12, 2021) (unpublished). When the debtor defaulted on her mortgage payments, she hired Home […]

Court Requires Debtor to Pay Discharged Mortgage through Plan

In a poorly-reasoned opinion ignoring basic principles of bankruptcy, the Bankruptcy Court for the Eastern District of New York held that a junior mortgagee’s lien could be stripped in the debtor’s chapter 13 case, but the claim must be treated as a general unsecured claim despite the fact that the debtor discharged her personal liability […]

District Court Upholds Local Rule Requiring Statements of Compliance

Finding the requirement to be procedural rather than substantive, the District Court for the Northern District of California upheld the district’s General Order requiring chapter 13 bankruptcy debtors who elect to pay their mortgages directly rather than through the trustee to submit regular notifications of compliance to the bankruptcy court. Gordon v. Bronitsky (In re […]

Eligibility for REPAYE Relevant Consideration for Student Loan Discharge

The 51-year-old debtor with no mental or physical impairments, no dependents, and a history of underemployment, could not discharge her over $650,000 in student loans as undue hardship but must participate in the offered income-based repayment plan. Parvizi v. U.S. Dept. of Ed., No. 18-30578, Adv. Proc. No. 19-3003, 2021 WL 1921121 (Bankr. D. Mass. […]

Standing Trustee Need Not Disgorge Fees when Plan Dismissed Prior to Confirmation

“[A] standing trustee is entitled to collect the statutory fee under [28 U.S.C.] § 586(e) upon receipt of each payment under the plan and is not required to disgorge the fee if the case is dismissed prior to confirmation.” McCallister v. Harmon, No. 20-1168 (B.A.P. 9th Cir. July 20, 2021) (unpublished). The debtors made several […]

No Punitive Sanctions for Rule 3002.1 Violation

In a decision taking the teeth out of Rule 3002.1’s notice requirement, the Second Circuit found that the Rule does not permit imposition of punitive sanctions. PHH Mortgage Corp. v. Sensenich (In re Gravel), No. 21-1 (2d Cir. Aug. 2, 2021). In a well-reasoned dissent, Judge Bianco argued that the majority incorrectly limited the scope […]

Debtor Cannot Cure Default After Expiration of Plan

The bankruptcy court correctly dismissed the debtor’s chapter 13 case after she missed her final two mortgage payments under her five-year plan, even though, shortly after the plan expired, she paid the arrears in full. In re Kinney, No. 20-1122 (10th Cir. July 23, 2021). The debtor entered bankruptcy current on her mortgage payments, and […]