Property of Estate

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Pawned Vehicle Is Part of Bankruptcy Estate

Where the maturity date on the vehicle pawn contract had not elapsed before the debtor filed for chapter 13 bankruptcy, she retained ownership of her vehicle, the vehicle became property of the estate, and the loan could be provided for in her chapter 13 plan. TitleMax of Alabama, Inc. v. Womack, — Fed. Appx. —-, 2021 WL 3856036 (11th Cir. Aug. 30, 2021) (case no. 21-11476) (unpublished).

The debtor filed her chapter 13 petition 11 days prior to the maturity date of the pawn contract on her vehicle and she proposed to pay the amount remaining on the loan through the life of the plan under section 1322(b)(2). TitleMax objected to confirmation, arguing that, under the terms of the pawn contract and state law, once the maturity date on the loan expired, the debtor’s choices were limited to redemption of the vehicle or forfeiture of title to TitleMax. The bankruptcy court overruled TitleMax’s objections, and the district court affirmed (see blog post here). [Read more…] about Pawned Vehicle Is Part of Bankruptcy Estate

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Tax Credits Exemptible as Public Assistance

Where the Additional Child Tax Credit and Earned Income Tax Credit were both intended to benefit low-income households and were not limited by taxes owed, they were properly deemed “public assistance” under state exemption laws. In re Moreno, — B.R. —-, 2021 WL 1904189 (Bankr. W.D. Wash. May 11, 2021) (case no. 3:20-bk-42855). [Read more…] about Tax Credits Exemptible as Public Assistance

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Modification of Pawn Contract

Where the debtor entered bankruptcy prior to the maturation date of her pawn contract, she had an ownership interest in her pawned vehicle, the lender was a lienholder, and the pawn contract could be modified under section 1322(b). TitleMax of Alabama, Inc. v. Womack, 2021 WL 1343051 (M.D. Ala. April 9, 2021) (case no. 2:20-cv-416). [Read more…] about Modification of Pawn Contract

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No Deadline for Lien Avoidance Motion

The debtor was not required to file her motion to avoid a judicial lien while her case was still open, and to assert a homestead exemption in Oklahoma, the debtor need only reside on the property. In re Rose-Brownfield, 2021 WL 809767, No. 18-80342 (Bankr. E.D. Okla. Feb. 22, 2021). [Read more…] about No Deadline for Lien Avoidance Motion

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Change of Beneficiary Not Avoidable Transfer

The chapter 7 debtor’s change of beneficiary in his life insurance policy from his employer to his wife was not an avoidable property transfer where the debtor retained his interest in the policy and the transfer did not diminish the bankruptcy estate. Harden v. Harrison (In re Harrison), 2021 WL 739533, No. 19-5730, Adv. Proc. No. 20-113 (Bankr. E.D. N.C. Feb. 22, 2021). [Read more…] about Change of Beneficiary Not Avoidable Transfer

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TitleMax Can’t Have Its Cake and Eat it Too

TitleMax waived its right to forfeiture under a title pawn transaction when it failed to object to treatment of the loan as a secured debt prior to confirmation of the debtor’s plan. TitleMax of Alabama v. Deakle, No. 20-335 (S.D. Ala. March 31, 2021).

Prior to filing for bankruptcy, the debtor entered into a title pawn transaction with TitleMax. The pawn matured and the grace period for redemption expired before the debtor filed her chapter 13 petition. Her proposed plan provided for payments to TitleMax as a secured creditor. TitleMax raised no objection to the treatment of the loan until three months after the debtor’s plan was confirmed. At that time, TitleMax filed a motion to “confirm termination or absence of stay.” The bankruptcy court found that, by failing to object to confirmation, TitleMax had waived the forfeiture provision of Alabama’s Pawnshop Act and was bound by the terms of the confirmed plan under section 1327(a). [Read more…] about TitleMax Can’t Have Its Cake and Eat it Too

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Ex-Wife’s Interest In Marital Residence Does Not Enter Debtor’s Estate

The debtor’s ex-wife’s interest in the marital residence did not enter the bankruptcy estate even though the property was titled to the debtor, where their dissolution agreement gave her half interest and the debtor was prohibited from unilaterally disposing of the property. But the debtor’s ex-wife did not show that his failure to comply with the dissolution agreement generally, was an indication that he undertook the debts created by the agreement by fraud where the evidence did not support her contention that he never intended to comply. Williams v. Williams, No. 18-1197 (Bankr. D. Colo. Jan. 8, 2021). [Read more…] about Ex-Wife’s Interest In Marital Residence Does Not Enter Debtor’s Estate

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NACBA Files Amicus in Technical Abandonment Case

NACBA/NCBRC filed an amicus brief in support of the debtors in a case where, two years after he elected not to administer a fully-disclosed cause of action against Ocwen, and the debtors’ bankruptcy case was closed, the chapter 7 trustee moved to reopen the case to obtain approval for a settlement agreement with Ocwen. Stevens v. Whitmore (In re Stevens), No. 20-60044 (9th Cir.) (filed Feb. 26, 2021). [Read more…] about NACBA Files Amicus in Technical Abandonment Case

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Stevens v. Whitmore, No. 20-60044 (9th Cir.)

Type: Amicus
Date: February 26, 2021
Description: Whether chapter 7 trustee abandons cause of action asset under section 554(c) when the cause of action is fully disclosed and he determines that it lacks value to the estate, but the debtors listed the asset in their SOFA rather than in their schedules.
Result: Judgment affirmed, Oct. 19, 2021.

Stevens Decision (9th) Oct 2021

Stevens 9th Cir Amicus Feb 2021

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Legal Malpractice Claim Accrued When Debtors Denied Discharge

Where the only injury resulting from bankruptcy counsel’s conduct was denial of discharge, the cause of action for legal malpractice accrued post-petition and belonged to the debtors rather than the chapter 7 bankruptcy estate. Church Joint Venture, L.P. v. Blasingame, No. 19-5505 (6th Cir. Jan. 26, 2021).

The debtors filed for chapter 7 bankruptcy but were denied discharge when the court learned of undisclosed assets in the form of personal property, shell companies, family trusts, etc. The debtors filed a malpractice lawsuit against their bankruptcy attorneys in state court. When the trustee declined to bring a suit against the debtors’ attorneys on behalf of the bankruptcy estate, the debtors’ primary creditor, CJV, obtained derivative standing to do so. CJV moved for summary judgment on the issue of whether the cause of action belonged to the estate. The court treated the debtors’ response as a cross-motion for summary judgment and granted judgment in favor of the debtors. The BAP for the Sixth Circuit affirmed. Church Joint Ventures, L.P. v. Blasingame (In re Blasingame), 597 B.R. 614 (B.A.P. 6th Cir. 2019). [Read more…] about Legal Malpractice Claim Accrued When Debtors Denied Discharge