Posted by NCBRC - January 18th, 2019
The bankruptcy court denied the creditor’s motion to compel arbitration where the debtor’s adversary complaint, based on the creditor’s violation of the discharge injunction, was based on a purely bankruptcy issue. Henry v. Educ. Fin. Serv., No. 13-30519, Adv. Proc. No. 18-3154 (Bankr. S.D. Tex. Oct. 17, 2018). Read More
Posted by NCBRC - January 15th, 2019
Under section 362(c)(3), the automatic stay terminates in its entirety after 30 days, when the debtor has had a previous case dismissed within one year of filing the second case. Smith v. State of Maine Bureau of Rev. Servs., 910 F.3d 576 (1st Cir. 2018). Read More
Posted by NCBRC - January 10th, 2019
The Ninth Circuit recently ruled that Section 362(k) of the Bankruptcy Code allows an award of attorney’s fees when the debtor successfully defends or challenges a judgment for violation of the automatic stay. In Easley v. Collection Serv. of Nev., No. 17-16506, 2018 U.S. App. LEXIS 35857, at *3 (9th Cir. Dec. 20, 2018), the Ninth Circuit Court of Appeals reversed the judgment of the District Court.
Read More
Posted by NCBRC - January 10th, 2019
The district court did not abuse its discretion in dismissing the plaintiff’s case under the False Claims Act where he had failed to disclose the cause of action in his pending chapter 13 case. Bias v. Tangipahoa Parish School Board, No. 17-30982 (5th Cir. March 22, 2019) (withdrawing prior opinion) (unpublished, per curiam opinion).
After his chapter 13 case was confirmed in bankruptcy court, debtor, Ronald Bias, learned that his retirement from the Marine Corps had mistakenly been permitted two years earlier than it should have been. The Marine Corps offered him the option of continuing his teaching position in the Junior Reserve Officer’s Training Corp (JROTC), Tangipahoa Parish School District, as a way of fulfilling his pre-retirement obligations. While teaching, Mr. Bias learned of a fellow marine and teacher at the school whom he believed was submitting false reimbursement requests to the Marine Corps. After he reported his suspicions, Mr. Bias was offered the opportunity to retire or be transferred to a new school district. Read More
Posted by NCBRC - January 8th, 2019
A mortgage paid outside the plan is not “provided for by the plan” for purposes of discharge of the debtor’s personal liability under section 1328(a). Dukes v. Suncoast Credit Union, No. 16-16513 (11th Cir. Dec. 6, 2018).
When she filed her bankruptcy petition, Chapter 13 debtor, Mildred Dukes, was current on two mortgages held by Suncoast Credit Union. Though she listed both mortgages in her schedules, the credit union filed a proof of claim only for the second mortgage. Her confirmed plan stated that the mortgages would be paid outside the plan. Ms. Dukes successfully completed her plan payments and was granted discharge of all debts provided for by the plan. During the course of the plan, however, Ms. Dukes defaulted on both mortgages. The credit union foreclosed on the property under the second mortgage, and sought deficiency judgment against Ms. Dukes under the first mortgage. It moved to reopen her bankruptcy to obtain an order that her personal liability on the first mortgage was not discharged. The bankruptcy court found in favor of the credit union, and the district court affirmed. Read More
Posted by NCBRC - January 4th, 2019
By operation of state property law, a debtor’s interest in a joint tenancy drops out of the chapter 7 estate upon the death of the debtor, and this does not conflict with the trustee’s powers under federal law. Cohen v. Chernushin (In re Chernushin), No. 18-1068 (10th Cir. Dec. 21, 2018).
Gregory and Andrea Chernushin owned real property as joint tenants. Mr. Chernushin filed for bankruptcy but committed suicide during the pendency of his case. The chapter 7 trustee sought to retain and sell the joint tenancy. The bankruptcy court found that upon Mr. Chernushin’s death the entire interest in the property went to Ms. Chernushin and was therefore no longer part of the bankruptcy estate amenable to sale by the trustee. On appeal, the district court agreed. Cohen v. Chernushin (In re Chernushin), 584 B.R. 567 (D. Colo. 2018). Read More
Posted by NCBRC - January 2nd, 2019
A bankruptcy court lacks the power to require a chapter 13 debtor to include a plan provision pledging to pay into the plan the cash equivalent of any non-cash property obtained post-confirmation. Roseberry v. U.S. Trustee, No. 18-1039 (S.D. Ill. Dec. 18, 2018). Read More
Posted by NCBRC - December 27th, 2018
A bankruptcy court found that the omission of income data from numerous applications for food stamps and other public-assistance benefits satisfies the requirement of a materially false written statement respecting the debtor’s financial condition for purposes of exclusion from discharge. State of Oregon v. Maxwell, (In re Maxwell), No. 17-32084, Adv. Proc. No. 17-03113 (Bankr. D. Ore. Oct. 18, 2018) (unpublished letter opinion).
In this case, Antoinette Maxwell failed, on numerous public-assistance applications, to disclose employment income and child support payments she was receiving. The State of Oregon filed an adversary complaint in her chapter 7 bankruptcy seeking an order of non-dischargeability of over $16,000 in benefits it claimed she received by reason of the fraudulent omissions. Read More
Posted by NCBRC - December 13th, 2018
An arbitration clause in a student loan contract is unenforceable where the debtor seeks an order of discharge of the loan in bankruptcy. Roth v. Butler University (In re Roth), No. 17-4109, Adv. Proc. No. 18-50097 (Bankr. S.D. Ind. Nov. 16, 2018).
After Matthew Roth obtained his chapter 7 discharge, he moved to reopen his bankruptcy to seek discharge of his student loans under section 523(a)(8). One of his student loan lenders, Sallie Mae, answered with a motion to compel arbitration based on the terms of the student loan agreement. Read More
Posted by NCBRC - December 12th, 2018
Once tuition funds became non-refundable, the universities receiving the funds would be considered initial transferees and the transfers would be subject to avoidance under section 550(a). Pergament v. Brooklyn Law School, Nos. 18-2204, 18-2235, 18-2236 (E.D. N.Y. amended opinion Jan. 4, 2019).
In three adversary proceedings, the Chapter 7 Trustee, Marc Pergament, sought to recover tuition payments the debtor, Harold Adamo, made for his children’s education in three universities. The bankruptcy court found that the trustee could not avoid the transfers because the institutions were subsequent transferees who took in good faith under section 550(b). Read More