In a published opinion, the Fourth Circuit affirmed the denial of confirmation of an above-median Chapter 13 debtor’s plan that proposed to pay off three recently purchased vehicles while paying unsecured creditors less than eight cents on the dollar. In Goddard v. Burnett, No. 25-1303 (4th Cir. Apr. 28, 2026), the court held that technical compliance with the disposable-income test under Section 1325(b) does not insulate a plan from the separate good-faith requirement of Section 1325(a)(3). This ruling creates a circuit split on this issue with the case of Drummond v. Welsh (In re Welsh), 711 F.3d 1120 (9th Cir. 2013).
[Read more…] about Fourth Circuit Holds Good-Faith Review May Consider Whether Secured Property Is Necessary for Above-Median Chapter 13 DebtorsFourth Circuit Rejects Equitable Mootness in Chapter 13 Plan Confirmation Appeal
In a published opinion, the Fourth Circuit held that a district court erred in dismissing a Chapter 13 debtor’s appeal as equitably moot merely because a later plan had been confirmed and payments had begun. In Cook v. Chapter 13 Trustee, No. 25-1048 (4th Cir. Apr. 13, 2026), the court emphasized that equitable mootness is a narrow, pragmatic doctrine reserved for cases where effective relief is no longer practical or would be inequitable. The court concluded that the doctrine did not apply in a straightforward individual Chapter 13 case involving limited creditors, limited assets, and only prospective relief.
[Read more…] about Fourth Circuit Rejects Equitable Mootness in Chapter 13 Plan Confirmation AppealFourth Circuit Affirms Denial of Arbitration in Automatic Stay Action Against Goldman Sachs
In a 2-1 opinion, the Fourth Circuit held that a bankruptcy court may refuse to compel arbitration of a debtor’s claim for willful violation of the automatic stay under Section 362(k) where arbitration would conflict with the purposes of the Bankruptcy Code. In Goldman Sachs Bank USA v Brown, the court concluded that sending the debtors’ stay-violation claims to arbitration would interfere with the bankruptcy court’s authority to enforce the stay, undermine the centralized resolution of bankruptcy disputes, and dilute one of the Code’s core protections for debtors.
[Read more…] about Fourth Circuit Affirms Denial of Arbitration in Automatic Stay Action Against Goldman SachsNCBRC and NACBA File Amicus Brief in the Fourth Circuit to Preserve Enforcement of the Automatic Stay in Brown v. Goldman Sachs
On July 24, 2025, the National Consumer Bankruptcy Rights Center (NCBRC) and the National Association of Consumer Bankruptcy Attorneys (NACBA) filed an amicus curiae brief in the U.S. Court of Appeals for the Fourth Circuit in Goldman Sachs Bank USA v. Brown, No. 25-1439. The case concerns whether consumer debtors’ claims under 11 U.S.C. § 362(k)—seeking damages for willful violations of the automatic stay—must be resolved through private arbitration, rather than in the bankruptcy courts tasked with enforcing that stay.
[Read more…] about NCBRC and NACBA File Amicus Brief in the Fourth Circuit to Preserve Enforcement of the Automatic Stay in Brown v. Goldman SachsFourth Circuit Appeal in Goddard v. Burnett Examines the Role of Good Faith in Paying Secured Debts in Chapter 13 Plans
On July 16, 2025, the National Consumer Bankruptcy Rights Center (NCBRC) and the National Association of Consumer Bankruptcy Attorneys (NACBA) filed a joint amicus brief in the U.S. Court of Appeals for the Fourth Circuit in support of the debtor-appellant in Goddard v. Burnett, Case No. 25-1303. The case presents a critical question about the interaction between the statutory “means test” and the judicially interpreted “good faith” standard in Chapter 13 bankruptcy cases.
[Read more…] about Fourth Circuit Appeal in Goddard v. Burnett Examines the Role of Good Faith in Paying Secured Debts in Chapter 13 PlansFourth Circuit Affirms Post-Discharge Protections: Koontz Decision Preserves FDCPA Rights for Bankruptcy Debtors
In a major victory for consumer bankruptcy debtors and their advocates, the U.S. Court of Appeals for the Fourth Circuit reversed a troubling lower court decision in Koontz v. SN Servicing Corporation, holding that a mortgage servicer’s post-discharge collection efforts could still be subject to the Fair Debt Collection Practices Act (FDCPA), even where the debtor’s personal liability had been extinguished. This opinion affirms that a debtor’s in rem obligations after discharge are still “debts” under the FDCPA—and that debtors remain “consumers” protected by its provisions.
[Read more…] about Fourth Circuit Affirms Post-Discharge Protections: Koontz Decision Preserves FDCPA Rights for Bankruptcy DebtorsDoes Equitable Mootness Prevent Debtors from Appealing Confirmed Chapter 13 Plans?
The Fourth Circuit is set to decide a significant issue in Cook v. Gorman, a case that could determine whether the doctrine of equitable mootness prevents debtors from appealing the confirmation of a Chapter 13 repayment plan. At the heart of the case is whether equitable mootness—commonly used to dismiss appeals in complex Chapter 11 reorganizations—should apply to a straightforward Chapter 13 consumer bankruptcy case.
[Read more…] about Does Equitable Mootness Prevent Debtors from Appealing Confirmed Chapter 13 Plans?Debtor’s Right to Propose Chapter 13 Plans Affirmed by Fourth Circuit: Flexibility Over Local Form Defaults
Holding
The Fourth Circuit Court of Appeals reversed the district court’s decision, holding that Sheila Ann Trantham had standing to appeal the bankruptcy court’s ruling and that the bankruptcy court erred in denying confirmation of her Chapter 13 plan based on a local form’s vesting provision. The court affirmed that a debtor has the right to propose a Chapter 13 plan with provisions that may deviate from local form defaults, provided they comply with the Bankruptcy Code.
Facts
Sheila Ann Trantham filed for Chapter 13 bankruptcy and proposed a plan that included a provision for the property of the estate to vest in her upon plan confirmation. The bankruptcy court, however, required adherence to the local form plan, which mandated that property vest only upon the entry of the final decree. Trantham’s plan was rejected by both the bankruptcy court and the district court, leading to her appeal.
Analysis
The Fourth Circuit first addressed the issue of standing, analyzing whether Trantham had the constitutional standing to appeal. The court found that Trantham suffered an injury in fact because the bankruptcy court’s requirement to adhere to the local form plan increased her procedural burdens and restricted her control over her property. Specifically, under the local form, her property remained encumbered by creditor claims and required court approval for certain actions, such as selling property, which resulted in tangible harms including the potential for increased costs and procedural delays. The court further held that Trantham was not required to meet the “person aggrieved” standard of prudential standing, as she was the party directly involved and affected by the bankruptcy court’s decision.
The court then focused on the debtor’s right to propose a Chapter 13 plan. The Fourth Circuit emphasized that the Bankruptcy Code grants debtors significant flexibility in designing their repayment plans, including the timing of when property vests in the debtor. The court criticized the bankruptcy court’s mandatory application of the local form’s vesting provision, arguing that it improperly constrained the debtor’s substantive right under the Bankruptcy Code to propose a plan. The court underscored that while local forms can promote efficiency, they must not abridge, modify, or enlarge the substantive rights provided by the Bankruptcy Code. The court ruled that Trantham’s plan, which called for vesting at confirmation, was permissible under the Code and should not have been rejected solely because it deviated from the local form’s default provision. The court concluded that the bankruptcy court’s decision to require adherence to the local form’s vesting schedule without considering the specifics of Trantham’s plan violated her rights under the Bankruptcy Code.
Conclusion
The Fourth Circuit reversed the district court’s ruling and remanded the case for further proceedings, instructing that Trantham’s plan should be assessed based on its compliance with the Bankruptcy Code, rather than on adherence to the local form’s default provisions.
NACBA and NCBRC submitted an amicus brief authored by Richard Cook, who also participated in the oral arguments. Additionally, NCBRC conducted a moot court session to prepare Appellant and Amici’s counsel for the oral arguments.
Trantham v. Tate 4th Cir Opinion rev dist court
4th Circuit Considers Whether the FDCPA Protects Discharged Debtors From Improper Collection
The 4th Circuit Court is considering an appeal from the District Court for the Northern District of West Virginia which dismissed the Debtor’s FDCPA complaint due to lack of standing since his debt was discharged in a prior chapter 7 bankruptcy.
Facts
John Koontz entered into a mortgage loan with CitiFinancial, which was later serviced by SN Servicing Corporation (SNSC) and then by Land Home Financial Services (LHFS). After Koontz received a Chapter 7 bankruptcy discharge in 2017, he continued to make voluntary payments on the loan. He alleged that SNSC and LHFS charged excessive late fees and failed to respond to his requests for information.
Analysis
The district court analyzed whether Koontz had standing to pursue claims under the FDCPA and WVCCPA, given his bankruptcy discharge. Under the FDCPA, the court determined that Koontz was not obligated or allegedly obligated to pay the debt because the bankruptcy discharge extinguished his personal liability. The court referenced the Fourth Circuit’s decision in Lovegrove v. Ocwen Home Loans Servicing, LLC, where post-discharge mortgage statements containing disclaimers were not considered attempts to collect a debt. The court concluded that SNSC’s and LHFS’s communications, which included similar disclaimers, were not attempts to collect a debt under the FDCPA.
For the WVCCPA claims, the court held that Koontz was not a “consumer” as defined by the statute because his personal obligation to pay the mortgage debt was discharged in bankruptcy. The court referenced its previous decision in Fabian v. Home Loan Center, Inc., which held that a discharged debtor is not a “consumer” under the WVCCPA and therefore lacks standing to bring claims under the Act. The court rejected Koontz’s reliance on other federal court cases, noting that many involved phone calls rather than written correspondence and did not alter the applicability of Fabian.
The court dismissed Koontz’s claims, reaffirming that a bankruptcy discharge eliminates personal liability for the debt, thereby negating standing under the FDCPA and WVCCPA. The court emphasized the importance of clear and unequivocal disclaimers in post-discharge communications to avoid violating debt collection laws.
NCBRC along with the National Association of Consumer Bankruptcy Attorneys and the National Consumer Law Center filed a brief in support of the Debtor.
Amici Brief in Support of Appellant – Koontz vs SN Servicing
4th Circuit Holds a Deferred Entry of Conviction by Probation Before Judgment is Non-Dischargeable as a “Conviction” Under Section 1328(a)(3)
In In re Feyijinmi, the 4th Circuit held that a debt for restitution ordered as part of a criminal conviction is nondischargeable under 11 U.S.C. § 1328(a)(3), even if the conviction was expunged or the restitution was later converted to a civil matter. Additionally, the State’s characterization of the debt on its proof of claim as “court fees” did not change its nondischargeable nature.
Facts
Dedre Feyijinmi was found guilty of welfare fraud in Maryland state court and ordered to pay $14,487 in restitution. The court deferred the entry of her conviction and placed her on probation before judgment. After completing her probation, the state expunged her criminal records but her restitution obligation remained, and it was later transferred to the State’s Central Collection Unit. Feyijinmi filed for Chapter 13 bankruptcy, and the State filed a proof of claim for the restitution debt, labeling it as “court fees.”
Analysis
The court’s legal analysis began with the interpretation of “conviction” under 11 U.S.C. § 1328(a)(3). The court applied federal law, relying on the Supreme Court’s decision in Dickerson v. New Banner Institute, Inc., which held that a guilty plea followed by probation qualifies as a conviction, even if no formal judgment is entered. The court determined that Feyijinmi’s probation before judgment, which required a guilty finding, constituted a conviction under federal law. This interpretation promotes national uniformity and prevents anomalous results that could arise from varying state definitions.
Next, the court addressed whether restitution ordered as part of a probation before judgment constitutes a “sentence” under § 1328(a)(3). The court concluded that “sentence” includes any penal consequences resulting from a determination of guilt, such as probation and restitution. The court found that Congress intended to except criminal restitution from discharge in bankruptcy to prevent federal proceedings from invalidating state-ordered restitution.
Finally, the court rejected Feyijinmi’s argument that the State’s labeling of the debt as “court fees” on its proof of claim affected its dischargeability. The court held that restitution debts are nondischargeable without any action by the creditor and that the State’s proof of claim and its characterization of the debt did not change its nature. The court also found no evidence of bad faith or unreasonable delay that could have prejudiced Feyijinmi.
NACBA filed an amicus brief in support of the Debtor/Appellant.
In re Feyijinmi – Appellants Brief
In re Feyijinmi – NACBAs Amicus Brief In Support of Appellant
In re Feyijinmi – Appellees Brief
Tips
- Accurately Characterize Claims: Ensure that proofs of claim accurately reflect the nature of the debt to avoid confusion and potential disputes in bankruptcy proceedings.
- Understand Federal Definitions: Be aware that federal law, not state law, governs definitions such as “conviction” and “sentence” in the context of bankruptcy dischargeability.
- Advising Clients on Restitution: Advise clients that restitution debts are generally nondischargeable in bankruptcy, even if labeled differently on proofs of claim or converted to civil matters.