Exceptions to Discharge

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Objection to Discharge Should Have Been Dismissed as Untimely

The chapter 7 trustee failed to continue the creditors’ meeting to a specified date as required by Rule 2003(e) and therefore his later objection to discharge was untimely. In re Jenkins, No. 14-1385 (4th Cir. Apr. 27, 2015). [Read more…] about Objection to Discharge Should Have Been Dismissed as Untimely

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Agent’s Fraud Does Not Lead To Nondischargeability

When a debt is the result of fraud may the debtor still discharge it if he was not complicit in the fraud? What if the fraudulent actor was an agent of the debtor? Judge Posner of the Seventh Circuit answered both questions in the negative. Sullivan v. Glenn (In re Glenn), No. 14-3213 (7th Cir. Apr. 2, 2015). [Read more…] about Agent’s Fraud Does Not Lead To Nondischargeability

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Motion to Reopen Too Little Too Late

Equitable considerations weighed in favor of the debtors where, two years after their Chapter 7 discharge, a creditor sought to reopen the bankruptcy to allow the trustee to administer a district court UCC claim that the debtors filed post-discharge. In re Pinks, No. 12-317 (Bankr. D. S.C. Jan. 21, 2015). [Read more…] about Motion to Reopen Too Little Too Late

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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

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Pre-Bankruptcy Agreement Not To Discharge Debt Unenforceable

A debtor’s agreement before filing bankruptcy not to discharge her debt for attorney’s fees was found to be unenforceable under section 523(a)(2) and for public policy reasons. Ziegler v. Kline (In re Kline), No. 14-12815, Adv. Proc. No. 14-227 (Bankr. E.D. Pa. Nov. 20, 2014). [Read more…] about Pre-Bankruptcy Agreement Not To Discharge Debt Unenforceable

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Rent-Stabilized Lease Is Exempt as Public Assistance Benefit

The New York Court of Appeals determined that a rent-stabilized lease is a public assistance benefit subject to state exemption laws. Santiago-Monteverdi v. Pereira (In re Santiago-Monteverdi), 2014 NY Slip Op. 8051 (N.Y. Nov. 20, 2014). [Read more…] about Rent-Stabilized Lease Is Exempt as Public Assistance Benefit

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Nevada Banks Take a Gamble when it Comes to HOA Liens

In a 4-3 decision, the Nevada Supreme Court decided that Nev. Rev. St. 116.3116 gives a homeowners’ association (HOA) a superpriority lien based on certain unpaid dues and assessments so as to extinguish the first deed of trust upon foreclosure. SFR Investments Pool v. U.S. Bank, No. 63078 (Nev. S. Ct. Sept. 18, 2014). The court also held that, under the statute, an HOA may use a non-judicial foreclosure.

[Read more…] about Nevada Banks Take a Gamble when it Comes to HOA Liens

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Ongoing Homeowners Association Assessments Dischargeable

Approximately a year and a half after the debtors abandoned their condominium and stopped paying their homeowners’ assessments, they filed for chapter 13 bankruptcy. Their plan proposed to transfer title to the secured creditor, Bank of America, and made no provision for payment of ongoing Homeowners Association assessments. Both the bank and the HOA objected to confirmation of the plan. The bankruptcy court sustained the Bank’s objection but denied the HOA’s and confirmed the plan insofar as it did not include payment of ongoing HOA assessments. In re Coonfield, No. 14-2533 (Bankr. E.D. Wash. Sept. 25, 2014). [Read more…] about Ongoing Homeowners Association Assessments Dischargeable