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 Releases 2025 Year in Review
The National Consumer Bankruptcy Rights Center is pleased to announce the publication of its 2025 Year in Review, highlighting a year of sustained appellate advocacy, national collaboration, and meaningful impact on consumer bankruptcy jurisprudence. The full report is available here: NCBRC 2025 Year in Review.
Read more: NCBRC Releases 2025 Year in ReviewIn 2025, NCBRC’s advocacy reached seven federal circuits and the United States Supreme Court. Through amicus participation, moot courts, case monitoring, and direct collaboration with debtors’ counsel, NCBRC engaged in cases addressing exemptions, Chapter 13 plan feasibility and modification, discharge enforcement, arbitration, and the scope of bankruptcy court authority. Over the course of the year, the organization published more than 28 substantive case-law and advocacy updates and strengthened its Board of Directors with the addition of two distinguished attorneys.
The Year in Review details NCBRC’s work in significant matters such as Warfield v. Nance, Bronitsky v. Saldana, Conte v. Hill, Mission Hen, LLC v. Lee, and Valdellon v. Wells Fargo, among many others. It also outlines the organization’s continued efforts to preserve the integrity of the fresh start, protect exemptions, defend Chapter 13 as a viable reorganization tool, and resist efforts to privatize core bankruptcy remedies through arbitration.
As NCBRC looks ahead to 2026, several major appellate matters are already underway. With the continued support of debtors’ counsel nationwide, board members, and contributors, NCBRC remains committed to shaping bankruptcy law in ways that protect consumer debtors and promote fairness and uniformity in the federal appellate courts.
We invite practitioners, supporters, and members of the bankruptcy community to read the full 2025 Year in Review and join us in advancing the rights of consumer debtors nationwide.
NCBRC Files Amicus in Seventh Circuit to Protect Payment of Debtor’s Counsel in Chapter 13
The National Consumer Bankruptcy Rights Center (NCBRC), joined by the National Association of Consumer Bankruptcy Attorneys (NACBA) and two standing Chapter 13 trustees (Tracy L. Updike, Chapter 13 Trustee for the Northern District of Indiana and Thomas H. Hooper, Chapter 13 Trustee for the Northern District of Illinois), has filed an amicus brief in the Seventh Circuit in In re City of Chicago, (Falkner & Alayah), Nos. 25-2878 & 25-2879. The brief urges affirmance of confirmation orders that permitted payment of debtor’s counsel before distributions to unsecured creditors. At issue is a sweeping and unprecedented argument by the City of Chicago that, if accepted, would fundamentally alter Chapter 13 practice across the country — and effectively make Chapter 13 relief unavailable to many consumer debtors. The brief was drafted by NCBRC Board Member Thomas Moers Mayer of Herbert Smith Freehills Kramer (US) LLP.
Read more: NCBRC Files Amicus in Seventh Circuit to Protect Payment of Debtor’s Counsel in Chapter 13The Issue
The City argues that in below-median Chapter 13 cases, administrative expenses — including court-approved debtor’s attorney fees — cannot be paid until unsecured creditors first receive three years of “disposable income.” In other words, Chicago contends that debtor’s counsel must wait behind general unsecured creditors for payment. The Bankruptcy Court rejected that argument and confirmed the plans. The City appealed.
Why This Matters
This is not a narrow dispute about plan drafting. The City’s theory would:
- Subordinate administrative expenses to general unsecured claims — something Congress has never done in modern bankruptcy law.
- Conflict directly with §§ 1322(a)(2) and 1326(b), which require payment of administrative expenses and trustee fees.
- Make it economically impossible for many debtors to obtain Chapter 13 counsel unless they could pay all fees up front.
- Threaten the viability of Chapter 13 practice in the Seventh Circuit.
As the amicus brief explains, more than half of Chapter 13 debtors are below-median income. If counsel cannot be paid through the plan in the ordinary course, Chapter 13 relief becomes unattainable for tens of thousands of families seeking to save homes and vehicles.
The Absurd Consequences of Chicago’s Position
Perhaps most strikingly, the City’s theory would also:
- Prevent payment of secured prepetition domestic support obligations during the commitment period.
- Elevate municipal parking fines above support obligations and administrative expenses.
- Allow charitable contributions while prohibiting payment of court-approved attorney fees.
Such results are incompatible with the structure of Chapter 13 and Congress’s clear priority scheme.
Why NCBRC Filed An Amicus Brief
NCBRC regularly files amicus briefs in cases that threaten the structural integrity of consumer bankruptcy practice. This appeal presents exactly that risk.
If administrative expenses cannot be paid in the ordinary course:
- Debtors will be unable to obtain counsel.
- Chapter 13 filings will decline.
- Home-saving reorganizations will become rare.
That is not what Congress enacted, and it is not how Chapter 13 has functioned for decades.
What’s Next
The case is now before the Seventh Circuit. A decision will have significant implications for Chapter 13 practice not only in Illinois, Indiana, and Wisconsin, but potentially nationwide.
NCBRC will continue to monitor developments and provide updates.
Briefs
Amicus Brief of NCBRC, NACBA, Trustee Updike & Trustee Hooper
Appellant City of Chicago’s Brief
Appellees/Debtors Brief written by Michael S. Miller of The Semrad Law Firm LLC
NCBRC Urges Supreme Court to Decide Bad Faith Narrowly in Keathley—Without Expanding Disclosure Duties
The National Consumer Bankruptcy Rights Center (NCBRC), joined by the National Consumer Law Center (NCLC) and the National Association of Consumer Bankruptcy Attorneys (NACBA), has filed an amicus curiae brief in Keathley v. Buddy Ayers Construction, Inc., a case now before the United States Supreme Court that could significantly reshape how judicial estoppel is applied in consumer bankruptcy cases. The Court is being asked to decide whether debtors may be barred from pursuing otherwise valid claims based on rigid, punitive presumptions of bad faith—rather than an equitable, fact-specific inquiry—when a claim was not disclosed during a Chapter 13 case.
For debtor’s counsel, the stakes are high: the Court’s decision may determine whether honest mistakes or unsettled disclosure rules can be transformed into case-ending sanctions that benefit civil defendants at the expense of both debtors and creditors.
[Read more…] about NCBRC Urges Supreme Court to Decide Bad Faith Narrowly in Keathley—Without Expanding Disclosure DutiesNinth Circuit to Address Scope of § 524(i) and Discharge Remedies in Valdellon v. Wells Fargo
The Ninth Circuit is poised to address a set of important issues at the intersection of Chapter 13 practice and discharge enforcement in Valdellon v. Wells Fargo. The appeal challenges how § 524(i) applies when a mortgage servicer fails to honor the cure-and-maintain structure of a confirmed Chapter 13 plan and asks whether emotional-distress damages remain available as a contempt remedy after Taggart v. Lorenzen. The outcome will directly affect the reliability of Notices of Final Cure, the finality of the discharge order, and the remedies available to protect debtors from unlawful post-discharge collection efforts.
[Read more…] about Ninth Circuit to Address Scope of § 524(i) and Discharge Remedies in Valdellon v. Wells FargoMichigan Court of Appeals Orders Presentation of Passed Bills, Including Critical Bankruptcy-Exemption Modernization Measure
In a significant constitutional and consumer-protection decision, the Michigan Court of Appeals held that nine bills duly enacted by both chambers of the Legislature—including HB 4901, the long-awaited modernization of Michigan’s bankruptcy exemptions—must be presented to the Governor for consideration. The opinion, released October 27, 2025, reverses the Court of Claims and directs issuance of a writ of mandamus compelling presentment.
[Read more…] about Michigan Court of Appeals Orders Presentation of Passed Bills, Including Critical Bankruptcy-Exemption Modernization Measure5th Circuit Holds That The 30-Day Window To Object to Exemptions in Rule 4003(b)(1) Can Be Waived
In Langston v. Dallas Commodity Company, No. 24-10883 (5th Cir. Nov. 17, 2025), the U.S. Court of Appeals for the Fifth Circuit addressed a recurring challenge in consumer bankruptcy practice: what happens when a trustee fails to properly continue a Section 341 meeting of creditors under Federal Rule of Bankruptcy Procedure 2003(e)? While the court affirmed that such procedural failures do not automatically trigger a bright-line rule concluding the meeting, it established important precedent distinguishing between cases where another meeting is actually held versus cases where no further meeting occurs. Most significantly for practitioners, the decision underscores how easily debtors can waive the protections of the 30-day deadline to object to exemptions under Rule 4003(b)(1)—and provides a roadmap for avoiding such waivers.
[Read more…] about 5th Circuit Holds That The 30-Day Window To Object to Exemptions in Rule 4003(b)(1) Can Be WaivedNinth Circuit Holds Debtor’s Post-Claim Deadline Plan Amendments Do Not Salvage a Late Claim – Duarte v. Hillard
Holding. In Duarte, No. 24-5156, 2025 LX 413952 (9th Cir. Oct. 23, 2025), the Ninth Circuit Court of Appeals affirmed the disallowance of a creditor’s untimely proof of claim. The ruling reinforces strict adherence to the filing deadlines under the Bankruptcy Code and underscores that post-bar-date actions by a debtor do not substitute for a timely proof of claim under Federal Rule of Bankruptcy Procedure 3004.
[Read more…] about Ninth Circuit Holds Debtor’s Post-Claim Deadline Plan Amendments Do Not Salvage a Late Claim – Duarte v. HillardNinth Circuit Rejects Claim Preclusion in Successive Exemption Claims
In a major win for consumer debtors and the attorneys who represent them, the Ninth Circuit Court of Appeals has reversed the District Court’s ruling in Warfield v. Nance, reaffirming that debtors may amend their bankruptcy exemptions even after earlier claims have been denied. The decision safeguards the principle that exemptions must be liberally construed in favor of debtors and upholds the right to a genuine “fresh start.”
[Read more…] about Ninth Circuit Rejects Claim Preclusion in Successive Exemption ClaimsNCBRC and Allies File Amicus Brief in Romero Appeal on Tax Purchaser Interest Rates
On August 20, 2025, the National Consumer Bankruptcy Rights Center (NCBRC), together with Legal Aid Chicago, filed an amicus curiae brief in the Seventh Circuit in support of debtor–appellant Bernardo Romero. The case raises a recurring and important issue for homeowners who seek Chapter 13 relief to save their homes from tax purchasers.
[Read more…] about NCBRC and Allies File Amicus Brief in Romero Appeal on Tax Purchaser Interest Rates