The lender’s efforts to coerce the debtors to reopen their bankruptcy case to reaffirm the mortgage agreement violated the discharge injunction where post-discharge reaffirmation was legally unavailable and the court found the lender was merely attempting to collect personally against the debtors. In re Go, No. 21-12657 (Bankr. D. Nev. June 29, 2022). Read More
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Lender Sanctioned for Self-Inflicted Wound
Posted by NCBRC - July 6th, 2022
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Carve-Out Agreement Creates Exemptible Equity
Posted by NCBRC - June 30th, 2022
The debtor was entitled to obtain the benefit of her homestead exemption even though, at the time she filed her petition, she had no equity in the property, where “the secured creditor’s agreement to accept less money upon a sale creates equity in the home where none existed before.” Stark v. Pryor (In re Stark), No. 20-4766 (E.D.N.Y. June 28, 2022). Read More
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Language in Divorce Order Did Not Deprive Debtor of Right to Exemption
Posted by NCBRC - June 28th, 2022
The debtor’s interest in her ex-husband’s retirement account was exemptible in her bankruptcy even though the funds had not yet transferred and the Judgment of Dissolution order stated that the funds were to be used to pay off the debtor’s credit card debt. In re Steinke, No. 21-90618 (Bankr. C.D. Ill. June 15, 2022). Read More
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Cat Confiscation Case
Posted by NCBRC - June 24th, 2022
The County Animal Control Office did not violate the automatic stay when it refused to return 36 cats it had confiscated from the debtor’s property where it acted within its police and regulatory powers, and the court lacked jurisdiction to order the return of the cats where the trustee had abandoned them. In re Mitchell-Smith, No. 21-57646 (Bankr. N.D. Ga. June 17, 2022). Read More
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Taggart Contempt Standard Applies in Chapter 13
Posted by NCBRC - June 21st, 2022
A bankruptcy court in the District of South Carolina found that the objective standard in a civil contempt proceeding, under which the creditor may assert a fair ground of doubt as to whether its conduct violated a court order, applies in the context of a contempt action based on violation of a chapter 13 discharge order. In re Seaver, No. 20-2238 (Bankr. D. S.C. May 13, 2022). Read More
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Scotus Denies Cert in Fee Harvesting Case
Posted by NCBRC - June 14th, 2022
The Supreme Court denied certiorari in the case of Sensenich v. PHH Mortgage Corp., No. 21-1322 (cert denied, June 13, 2022). The Chapter 13 Trustee sought reversal of the Second Circuit decision that the bankruptcy court lacked the power to monetarily sanction PHH Mortgage Corp. for its fee harvesting practice which violated Bankruptcy Rule 3002.1. The Second Circuit held that the bankruptcy rule did not allow for punitive damages. The circuit court also held that the award could not be justified under the court’s inherent power because the bankruptcy court did not analyze that ground.
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Conjunction Junction Solves the Case
Posted by NCBRC - June 14th, 2022
Where the debtor’s restitution obligation was payable to Identified Consumers rather than a governmental unit, it did not fall within section 523(a)(7)’s exception to discharge. State of New Hampshire, Banking Department v. Dargon, No. 20-30300, Adv. Proc. No. 20-3017 (Bankr. D. Mass. March 11, 2022). Read More
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Act Not Willful Where Debtor Suffered Acute Psychosis
Posted by NCBRC - June 13th, 2022
A debt based on a civil judgment for pain and suffering arising out of an incident during which the debtor had an acute psychotic break and severely beat the claimant, was dischargeable in bankruptcy because his psychiatric condition prevented him from acting willfully within the meaning of section 523(a)(6). Lombardi v. Picard (In re Picard), No. 16-15432 Adv. Proc. No. 16-359 (Bankr. E.D. Pa. June 10, 2022). Read More
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Divorcing Debtor’s Plan Proposed in Good Faith
Posted by NCBRC - June 8th, 2022
The below-median debtor was entitled to confirmation of his chapter 13 plan where he proposed his plan in good faith and committed all of his disposable income to it despite the fact that he was in the middle of a divorce and his income and expenses were in a state of flux. In re Szafraniec, No. 21-10216 (Bankr. N.D. Ill. May 27, 2022). Read More
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Bifurcated Chapter 7 Fee Agreement Void
Posted by NCBRC - June 3rd, 2022
A fee arrangement bifurcating the chapter 7 bankruptcy attorney’s representation into separate pre-petition and post-petition agreements violated sections 526 and 528 and was void. In re Siegle, No. 21-42321 (Bankr. D. Minn. May 19, 2022).
The chapter 7 debtor’s counsel used a bifurcated fee system under which he offered a pre-petition fee agreement which obligated him only to file the bankruptcy petition. After that, the agreement specified that the debtor had three options: “(1) complete the case pro se; (2) hire another bankruptcy attorney; or (3) execute the Post-Petition Agreement.” The agreement came to the court’s attention when the debtor entered into the post-petition agreement and her attorney filed for court approval. 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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