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  • Mortgage Statements Not Attempts to Collect a Debt

    Posted by NCBRC - February 9th, 2023

    Where statements sent by the mortgage servicer listed the higher, pre-modification amount due, but specifically stated they were not an attempt to collect a debt and did not include an amount in potential late fees, the bankruptcy court erred in finding the statements were in violation of the automatic stay. Freedom Mortgage Corp. v. Dean, No. 22-1469 (M.D. Fla. Jan. 26, 2023). Read More

  • Extension of Stay Applies to Creditor Who Was Not Served with Motion

    Posted by NCBRC - February 6th, 2023

    The bankruptcy court properly exercised its discretion to grant an extension of stay in the debtor’s second chapter 11 case where the case was filed in good faith as to the creditors to be stayed even though one of the creditors to which the stay applied was not served with the motion. FourWs, LLC. V. Miller, No. 21-1273 (E.D. Cal. Jan 30, 2023). Read More

  • Right to Dismiss Despite Bad Faith or 109(e) Ineligibility

    Posted by NCBRC - January 31st, 2023

    A chapter 13 debtor’s statutory right to dismiss his bankruptcy is not precluded by bad faith or ineligibility under section 109(e). Powell v. TICO Construction Co. Inc., No. 22-1014 (B.A.P. 9th Cir. Oct. 21, 2022).

    TICO Construction, a judgment creditor in the debtor’s chapter 13 case, opposed the debtor’s motion to voluntarily dismiss his bankruptcy under section 1307(b). TICO alleged both that the debtor’s unsecured debts exceeded the debt limit set forth in section 109(e), and that the debtor abused by the bankruptcy process by transferring non-exempt assets to his ex-wife in “sham” divorce proceedings. TICO requested that, instead of granting the debtor’s motion to dismiss, the court should convert the case to chapter 7 or 11. Read More

  • UpRight Isn’t

    Posted by NCBRC - January 26th, 2023

    Although the complaint against him alleged violations of the Bankruptcy Code and he was ultimately sanctioned for ethical violations under Virginia Rules of Professional Conduct, a lawyer with UpRight was given due process in his sanctions hearing where the complaint specified the alleged misconduct and he was afforded the opportunity to prepare and present a defense. U.S. Trustee v. Delafield, No. 21-1632 (4th Cir. Jan. 11, 2023). Read More

  • Motgagee Sanctioned for Non-Compliance with Rule 3002.1(b)

    Posted by NCBRC - January 24th, 2023

    The mortgage creditor’s failure to comply with notice requirements of Rule 3002.1(b) when escrow and interest rates changed during bankruptcy, led the court to determine that the debtors were current on their mortgage payments and to sanction the mortgagee. In re Kinderknecht, No. 17-12530 (Bankr. D. Kans. Jan. 18, 2023). Read More

  • State Law Does Not Create Exemption in Trust

    Posted by NCBRC - January 18th, 2023

    A state statute protecting a trust from judgment creditors is not an exemption statute for bankruptcy purposes where it was not designated as such and it did not provide unequivocal protection against all forms of collection. In re Morris, No. 21-30468 (Bankr. N.D. Ill. Jan. 13, 2023). Read More

  • Plan Confirmation Does Not Defeat Antimodification Provision

    Posted by NCBRC - January 16th, 2023

    Although the debtor’s confirmed chapter 13 plan included a provision for release of the mortgage lien upon payment of the lender’s claim, the bankruptcy court erred in releasing the lien when the claim was for arrearages only, there remained outstanding principle at the end of the plan, and the mortgagee challenged release of the lien prior to discharge. Mortgage Corp. of the South v. Bozeman, No.21-10987 (11th Cir. Jan. 10, 2023). Read More

  • Experian Not Required under FCRA to Know Legal Validity of Debt

    Posted by NCBRC - January 11th, 2023

    Where it was not clear whether the debtor’s educational loan was included in his discharge, Experian did not violate the FCRA by reporting it as an outstanding debt. Mader v. Experian Information Solutions, Inc., No. 20-3073 (2d Cir. Jan. 4, 2023). Read More

  • Non-Debtor Spouse Transfers Interest to Debtor Post-Discharge

    Posted by NCBRC - January 5th, 2023

    The debtor’s adversary complaint stated a claim under sections 522 and 524 against a creditor who pursued state court action to avoid the transfer of community property from the non-debtor spouse to the debtor after the debtor had obtained discharge of the creditor’s claim. Rhodes v. Pecanland Village Shopping Center, LLC., No. 19-31559, Adv. Proc. No. 22-3010 (Bankr. W.D. La. Dec. 14, 2022). Read More

  • Removal of Trust Contingency Benefits Estate

    Posted by NCBRC - January 2nd, 2023

    Removal of a contingency in a Trust did not create a new asset such that the resulting increase in value to the debtor/beneficiary would be considered a post-petition asset. In re Wright, No. 19-21544 (Bankr. D. Kans. Dec. 7, 2022).

    The Wrights filed for chapter 13 bankruptcy with unsecured debts totaling $14,196.53. They confirmed a three-year plan that provided little to no distribution to unsecured creditors. When they filed for bankruptcy, Ms. Wright and her siblings were the beneficiaries of an irrevocable Trust consisting of 40 acres of real property. The Trust had a contingency that one of Ms. Wright’s siblings, Ronnie True, would receive the Trust income and continue to live on the Trust property for the remainder of his life. Upon Mr. True’s death, the Trustee could then either deed or sell the property for the benefit of the remaining siblings, including Ms. Wright. Read More

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     The Honoring American Veterans in Extreme Need Act of 2019 (“HAVEN Act”) excludes certain benefits paid to veterans or their family members from the definition of current monthly income (“CMI”) found in the Bankruptcy Code. The HAVEN Act amends § 101(10A) of the Bankruptcy Code and supplements the 2005 amendments to the Code that excluded other government benefits, such as social security income. 

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    Thank you to the following organizations without whose support our work would not be possible.

     

    American College of Bankruptcy
    The American College of Bankruptcy is an honorary public service association of bankruptcy and insolvency professionals who are invited to join as Fellows based on a proven record of the highest standards of professionalism plus service to the profession and their communities.  Together with its affiliated Foundation, the College is the largest financial supporter of bankruptcy and insolvency-related pro bono legal service programs in the United States.

     

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