A creditor law firm and one of its individual attorneys may be held in contempt on a joint and several liability basis for violation of the discharge injunction when the lawyer fails to cease a garnishment action and return collected wages upon learning of the debtor’s discharge in bankruptcy. Ragone v. Stefanik & Christie, LLC, No. 20-8013 (B.A.P. 6th Cir. May 13, 2021). Read More
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Law Firm and Counsel Joint and Severally Liable for D/C Injunction Violation
Posted by NCBRC - June 15th, 2021
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Arizona District Court Addresses Eligibility for Exemptions
Posted by NCBRC - June 9th, 2021
Where the Arizona debtors were subject to Kansas exemption law but could not actually take any exemptions due to residency requirements, they were entitled to use federal exemptions under section 522(d). Mackenzie v. Schreiber (In the Matter of Schreiber), No. 20-1993 (D. Ariz. June 4, 2021). Read More
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Attorney Fees Intended To Pressure Debtor Unnecessary
Posted by NCBRC - May 27th, 2021
The creditor’s attorney fees attributable to its repeated motions to continue foreclosure proceedings during the debtor’s pending bankruptcy cases were unnecessary given that the automatic stay was in place, and the bankruptcy court deducted those fees from the allowed claim. In re Peta, 2021 WL 608233 (Bankr. E.D. Pa., Feb. 10, 2021) (case no. 2:19-bk-13264). Read More
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No Deadline for Lien Avoidance Motion
Posted by NCBRC - May 21st, 2021
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
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Student Loan Guaranteed by TERI Was Nondischargeable
Posted by NCBRC - May 13th, 2021
The debtor’s student loan was “funded” by TERI, a nonprofit organization that guaranteed the loan, and was, therefore, nondischargeable under section 523(a)(8). Medina v. Nat’l Collegiate Student Loan Trust 2006-3, No. 20-1912 (S.D. Cal. April 20, 2021). Read More
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Missed Payments to Mortgagee Do Not Preclude Discharge
Posted by NCBRC - May 10th, 2021
The debtors’ missed plan payments to the mortgage creditor were a result of forbearance and COVID 19-related financial difficulties and were therefore not an impediment to discharge under section 1328. In re McCollum, No. 15-3502 (Bankr. D. S.C. Feb. 4, 2021). Read More
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Change of Beneficiary Not Avoidable Transfer
Posted by NCBRC - May 6th, 2021
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
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First-Time-Homeowner Tax Credit Debt Is Tax rather than Loan
Posted by NCBRC - May 4th, 2021
The debt created by the IRS’s first-time-homeowner’s tax credit, which requires a debtor to repay the credit over fifteen years, was a nondischargeable “tax” rather than a dischargeable “loan.” In re Shin, No. 17-13509 (Bankr. E.D. Va. Feb. 16, 2021).
The debtor bought a house with his mother and sister, taking the $7,500.00 first-time homeowner federal tax credit offered by the IRS. The Internal Revenue Code, sections 36(f)(1) and (7), provides that homeowners receiving the tax credit must repay that credit over fifteen years by increasing their yearly taxes. The tax recapture is automatically accelerated upon sale of the property within the fifteen-year payback period. For several years, the debtor paid the recapture tax to the IRS, but when he and his co-owners sold the house, there remained $5,000.00 in unpaid recapture tax. The debtor filed for chapter 7 bankruptcy and received a discharge. After the case was closed the debtor moved to reopen to allow him to seek a ruling that the recapture tax was discharged. The IRS opposed the motion. Read More
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Debtor May Avoid County Tax Foreclosure Sale
Posted by NCBRC - April 27th, 2021
A county’s tax sale of the debtor’s farm was avoidable as constructively fraudulent under section 548, where the debtor was insolvent at the time of the title transfer and the tax debt was substantially less than the fair market value of the property. DuVall v. County of Ontario, No.19-20179, Adv. Proc. No. 19-2011 (Bankr. W.D. N.Y. Feb. 18, 2021). Read More
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Debtor Loses the Battle but Wins the War
Posted by NCBRC - April 23rd, 2021
A confirmed plan binds the county tax creditor even though the plan did not provide for the interest claimed in its post-confirmation proof of claim where the county had notice of the plan and failed to object to confirmation. In re Bird, 624 B.R. 841 (Bankr. N.D. Ill., Feb. 2, 2021) (case no. 1:17-bk-2072). Read More
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HAVEN Act Guide
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.
This Guide provides an overview of the HAVEN Act identifies benefits that are excluded, and answers frequently asked questions.
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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.NACBA
The only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA has more than 3,000 members located in all 50 states and Puerto Rico.O. Max Gardner Foundation, Inc.
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