“The reasoning of Dewsnup dictates that a debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral.” So held the Supreme Court yesterday in Bank of America v. Caulkett, 575 U.S. ___, No. 13-1421, and Bank of America v. Toledo-Cardona, No. 14-163 (U.S. June 1, 2015). Justice Thomas (who did not take part in the Dewsnup decision) delivered the opinion of the Court in which all Justices joined except with respect to the footnote in which Justice Kennedy, Justice Breyer and Justice Sotomayor did not join. The case should have no affect upon lien-stripping in the reorganization chapters. For example, the decision preserves the application of 506(a) and use of 1322(b)(2) to strip liens in chapter 13. Read More
Brief Code SectionsSearch Results for: caulkett
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Court Reaffirms Dewsnup in Chapter 7 Cases
Posted by NCBRC - June 2nd, 2015
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IRS Tax Lien Secured by All Debtor’s Property
Posted by NCBRC - March 25th, 2015
An IRS tax lien attaches to all of debtor’s property, both personal and real, therefore, so long as there is some equity to which it can attach it may not be stripped off. In re Blackburn, No. 12-31658 (Bankr. N.D. Fla. Feb. 3, 2015). Read More
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Supreme Court Hears Oral Argument in Ch. 7 Lien Stripping Cases
Posted by NCBRC - March 24th, 2015
Today, the Supreme Court heard oral argument in Bank of America, N.A. v. Caulkett and Bank of America, N.A., v. Toledo-Cardona. At issue is whether chapter 7 debtors may strip off junior mortgages where there is no value in the collateral to support the junior lien. Here’s the transcript. Well worth the read!
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NACBA Weighs in on Chapter 7 Lien Stripping
Posted by NCBRC - February 27th, 2015
NACBA has filed an amicus brief seeking affirmance of the Eleventh Circuit decisions in the consolidated cases of Bank of Amer. v. Toledo-Cardona, No. 14-163 and Bank of Amer. v. Caulkett, No. 13-1421 (filed Feb. 23, 2015), adding its voice to the discussion of lien stripping in chapter 7 cases. The brief, authored by David R. Kuney, argues that section 506(a) values liens according to the worth of the collateral, and section 506(d) renders liens void to the extent that they have no value. The Supreme Court ruling in Dewsnup v. Timm, 502 U.S. 410 (1992), prohibiting strip-down of partially secured liens has been improperly extended to find that wholly unsecured liens cannot be stripped off in chapter 7. In Dewsnup the Court took pains to make clear that its decision was limited to the facts before it. The brief asks the Court to reconsider, or at least limit, its holding in Dewsnup to the extent that it turns on whether the underlying claim has been disallowed rather than on whether the lien is supported by value. The brief urges the Court to adhere to the reasoning in Nobelman v. American Sav. Bank, 508 U.S. 324 (1993) and United States v. Ron Pair Enter., Inc. 489 U.S. 235 (1989) ,which confirm that the starting point for treatment of secured claims is section 506(a). The “statutory and constitutional authority to modify, extinguish or avoid secured debts, even without full payment of the face amount of the debt, is in harmony with the economic reality that a lien is only as valuable as the collateral that underlies it.”
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Debtor Brief Filed in SCt Chapter 7 Lien Strip Case
Posted by NCBRC - February 18th, 2015
The debtors have filed their brief in the consolidated Supreme Court cases of Bank of Amer. v. Toledo-Cardona, No. 14-163 and Bank of Amer. v. Caulkett, No. 13-1421 (filed Feb. 17, 2014), addressing the issue of whether a wholly unsecured lien can be stripped off in chapter 7. In McNeal v. GMAC Mortg., 735 F.3d 1263 (11th Cir. 2012) cert. pet. den. (S.Ct. May 20, 2014), the court bucked the trend to find that Dewsnup v. Timm, 502 U.S. 410 (1992), which held that a partially secured lien could not be stripped-down in chapter 7, did not apply to wholly unsecured liens. In Toledo-Cardona and Caulkett, the debtors argue that McNeal was correctly decided. Dewsnup was explicitly limited to its facts and the Supreme Court’s instruction in Nobelman v. Am. Sav. Bank, 508 U.S. 324 (1993), to begin analysis with lien valuation under section 506(a) supports the Eleventh Circuit’s position that valueless liens may be stripped off under section 506(d).
There are currently at least one dozen petitions for certiorari before the Supreme Court on this issue filed by Bank of America and Bank of New York Mellon.
The debtor is represented by Stephanos Bibas, the Director of the Supreme Court Clinic at the University of Pennsylvania Law School.
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Supreme Court to Hear Chapter 7 Lien Stripping Cases
Posted by NCBRC - November 17th, 2014
The Supreme Court granted certiorari today in two of the three Chapter 7 lien-strip-off cases challenging the Eleventh Circuit decision in McNeal. Bank of Amer. v. Toledo-Cardona, No. 14-163 and Bank of Amer. v. Caulkett, No. 13-1421 (petition granted Nov. 17, 2014) (consolidated for argument) (Bank of Amer. v. Bello, No. 14-235 is still pending). In McNeal v. GMAC Mortg., 735 F.3d 1263 (11th Cir. 2012) pet. den. (May 20, 2014), the court bucked the trend to find that Dewsnup v. Timm, 502 U.S. 410 (1992), which held that a partially secured lien could not be stripped-down in chapter 7, did not apply to wholly unsecured liens. There are more than a dozen cases currently pending in the Eleventh Circuit challenging this decision, but, after an early abortive attempt to bring the issue before the Supreme Court (Bank of America v. Sinkfield, No. 13-700 (cert. denied, March 31, 2014)) the issue is now on track for final resolution. Briefing should be completed by March and argument is likely to be scheduled for the last week of March, with decision by June. The debtor is being represented by Stephanos Bibas, the Director of the Supreme Court Clinic at the University of Pennsylvania Law School.
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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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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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