bankruptcy

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Bank May Not Hide Settlement Amount

The amount of a settlement was not “confidential commercial information” requiring that it be sealed by the bankruptcy court. In re Gibbs, No. 11-3070 (Bankr. D. Haw. Dec. 19, 2017).

Judith Lynn Gibbs’s bankruptcy estate included a claim against Bank of America for wrongful foreclosure. The Bank and the bankruptcy trustee settled and jointly sought an order to seal the settlement agreement and redact the settlement amount from any other court records. The Office of the U.S. Trustee opposed the motion. [Read more…] about Bank May Not Hide Settlement Amount

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Criminal Restitution Is Nondischargeable

A debt is nondischargeable when it is incurred as part of a criminal sentence. Medical Lien Management, Inc. v. Dampier, No. 17-1160 (10th Cir. Feb. 14, 2018) (unpublished).

Billy Dampier was convicted of theft from his employer and, as part of his criminal sentencing, was ordered to make restitution. His efforts to discharge that debt failed in the bankruptcy court and before the BAP for the Tenth Circuit. On appeal to the Tenth Circuit, the court addressed two issues: 1. Whether his former employer had standing to object to the discharge of the debt, 2. Whether the debt was dischargeable under Section 523(a)(7). Section 523(a)(7) provides for the nondischargeability of a debt which is “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for  actual pecuniary loss.” [Read more…] about Criminal Restitution Is Nondischargeable

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No Excuses for Student Loan Servicer’s Failure to Comply with Plan

The Chapter 13 debtor was entitled to an award of attorney’s fees for her efforts to get the DOE’s student loan servicer to comply with the terms of her confirmed Plan. In re Berry, No. 16-1460 (Bankr. D. S.C. Feb. 2, 2018). [Read more…] about No Excuses for Student Loan Servicer’s Failure to Comply with Plan

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Debtor May Not Modify Rights of Tax Purchaser

By operation of state law, a tax sale purchaser has title to the purchased property and cannot have its rights modified in Chapter 13 to permit the debtor to redeem over the course of the plan. Deed Co. v. Jimerson, No. 17-513 (N.D. Ga. Jan. 23, 2018). [Read more…] about Debtor May Not Modify Rights of Tax Purchaser

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Court Not Required to Dismiss Case Exceeding Debt Limits

A court is not required to dismiss a Chapter 13 case where the debtor’s student loan debt causes his total unsecured debts to exceed the statutory debt cap. In re Pratola, 578 B.R. 414 (Bankr. N.D. Ill. Dec. 27, 2017), appeal filed, Stearns v. Pratola, Case No. 1:18-cv-213 (N.D. Ill. filed Jan. 11, 2018). [Read more…] about Court Not Required to Dismiss Case Exceeding Debt Limits

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District Court Reassesses Evidence of Undue Hardship

The district court reassessed the evidence presented at the adversary hearing and overturned the discharge of the debtor’s student loan debt. DeVos v. Price (In re Price), No. 17-3064 (E.D. Pa. Jan. 24, 2018). Chapter 7 debtor, Kristin M. Price, was a mother of three pre-school children, separated from her husband, and employed part-time as a vascular sonographer. She sought to discharge her almost $26,000.00 federal student loan. The bankruptcy court applied the three-part Brunner test, specifically finding that Ms. Price’s financial distress was likely to persist for at least five of the seven years remaining on her loan contract. Because this constituted a “significant portion of the repayment period,” the court granted discharge under section 523(a)(8). [Read more…] about District Court Reassesses Evidence of Undue Hardship

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How Much Notice is Enough?

The Eleventh Circuit found that even though Nationstar did not receive notice of the debtor’s objection to its claim, it was enough that Nationstar had actual notice of a court-ordered change in the status of its claim from secured to unsecured and failed to take timely action to protect its interest. Nationstar Mortgage v. Iliceto, No. 16-16815 (11th Cir. Dec. 11, 2017) (unpublished).

Robert Iliceto filed for Chapter 13 bankruptcy, listing U.S. Bank as his mortgage creditor. Nationstar filed a transfer of claim establishing itself as the assignee of the mortgage from U.S. Bank. Nationstar listed both its street address and a P.O. Box as “preferred” addresses. Mr. Iliceto filed a claim on Nationstar’s behalf in his Chapter 13 bankruptcy and, at the same time, objected to the claim on the basis that Nationstar was not a proper assignee. Mr. Iliceto failed to serve the objection on Nationstar as required by Rule 3007(a) and Section 502 of the Code. [Read more…] about How Much Notice is Enough?

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Right to Attorneys’ Fees for Stay Violations Extends to Appeals

In a case of first impression, the Eleventh Circuit held that the “explicit, specific, and broad language [in section 362(k)] permits the recovery of attorneys’ fees incurred in stopping the stay violation, prosecuting a damages action, and defending those judgments on appeal.” Mantiply v. Horne (In re Horne), No. 16-16789 (11th Cir. Dec. 5, 2017). [Read more…] about Right to Attorneys’ Fees for Stay Violations Extends to Appeals

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Court Won’t Let Bank of America “Buy and Bury” Judgment Against It

“To name and to shame Bank of America on the public record in an opinion that stays on the books serves a valuable purpose, casting sunlight on practices that affect ordinary consumers.” Sundquist v. Bank of America, No. 10-35624, Adv. Proc. No. 14-2278 (Bankr. E.D. Cal. Jan. 18, 2018).

Calling it a “naked effort to coerce this court to erase the record,” the bankruptcy court declined to vacate its 2017 judgment in which it awarded damages for violation of the automatic stay for $1,074,581.50 and ordered an additional $5 million in punitive damages based on Bank of America’s conduct in connection with Erik and Renee Sundquist’s home mortgage. In addition to the award directed to the Sundquists, the 2017 order included a $45 million punitive damage award to be distributed to various public interest entities, which were added to the case as Intervenors. The order also cancelled the Sundquists’ attorney’s contingency fee agreement, citing section 329(b), and ordered payment of her fees on a lodestar basis. Sundquist v. Bank of America (In re Sundquist), 566 B.R. 563 (Bankr. E.D. Cal. 2017) (2017 order) (blogged here). [Read more…] about Court Won’t Let Bank of America “Buy and Bury” Judgment Against It

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Debtor May Exempt 100% FMV When Value Does Not Exceed Statutory Cap

“There are certain situations where a debtor claiming federal exemptions under § 522 of the Bankruptcy Code can claim an exemption of a 100% interest in an asset. What we do not decide is whether doing so entitles such a debtor to clear title in that asset and any post-petition appreciation.” Ayobami v. Peake, No. 16-20589 (5th Cir. Jan. 3, 2018). [Read more…] about Debtor May Exempt 100% FMV When Value Does Not Exceed Statutory Cap