Posted by NCBRC - December 5th, 2016
The Nevada personal injury exemption applies to multiple claims rather than being limited to the aggregate total of all claims. Kaplan v. Dutra (In re Kaplan), No. 69065 (Nev. Dec. 1, 2016).
Chapter 7 debtor, David John Kaplan, was involved in two unrelated incidents in which his back was injured. He claimed two personal injury exemptions for $16,150 each in his bankruptcy schedules. The chapter 7 trustee objected to the exemptions arguing that the debtor was entitled to a maximum $16,150 for one or more personal injury claims. Finding no state court precedent on the issue, the bankruptcy court certified the question to the Nevada Supreme Court. Read More
Posted by NCBRC - December 1st, 2016
NCBRC has filed an amicus brief in the Eleventh Circuit on behalf of the NACBA membership to address the issue of that circuit’s approach to judicial estoppel. Slater v. U.S. Steel, No. 12-15568 (filed October 24, 2016).
Twenty one months after filing an employment discrimination suit in federal district court against her former employer, U.S. Steel, Sandra Slater filed for bankruptcy. (The original case was filed under chapter 7 and later converted to chapter 13). She failed to list the pending federal case in her bankruptcy schedules. U.S. Steel then moved the district court to bar the discrimination suit based on the doctrine of judicial estoppel. The district court granted the motion and Ms. Slater appealed. Read More
Posted by NCBRC - November 29th, 2016
This year, the National Consumer Bankruptcy Rights Center, is participating in #GivingTuesday, a global day dedicated to giving. Last year, more than 45,000 organizations in 71 countries came together to celebrate #GivingTuesday. We invite you to join the movement by supporting the work NCBRC does on behalf of consumer bankruptcy debtors.
Each year millions of individuals and families across the country struggle to pay their bills. Often financial distress follows on the heels of other unanticipated events such as job loss, divorce, substantial out-of-pocket medical expenses and natural disasters. Sometimes filing for bankruptcy is the best alternative for relieving the pressure of extreme financial distress. Bankruptcy can provide debtors with a fresh start–a new opportunity in life and a clear field for future effort. The Bankruptcy Code grants financially distressed debtors certain rights that are critical to the proper functioning of the bankruptcy system as a whole. However, bankruptcy debtors, with their limited financial resources and limited exposure to the bankruptcy system, often do not have the ability to protect the integrity of the bankruptcy system and preserve the bankruptcy rights of consumer debtors more generally. The National Consumer Bankruptcy Rights Center (NCBRC) is meant to fill that vacuum by filing briefs or providing assistance to consumer debtors’ or their attorneys, especially at the appellate level where a favorable decision will often help thousands of consumer bankruptcy debtors.
Posted by NCBRC - November 29th, 2016
Where the creditor sought to establish a judicial lien against the debtor’s interest in a tenancy in the entirety the threshold question is not whether the lien impairs the homestead exemption and may be avoided under section 522(f)(1), but whether a lien has been created at all. CRP Holdings v. O’Sullivan, No. 16-1526 (8th Cir. Nov. 14, 2016).
CRP obtained a default judgment against Casey Drew O’Sullivan and, attempting to secure a judicial lien on his real property, filed a notice of foreign judgment in the county where Mr. O’Sullivan’s residence was located. Mr. O’Sullivan filed for chapter 7 bankruptcy and claimed the property, which he owned as tenants in the entirety with his wife, as his homestead. The bankruptcy court sustained Mr. O’Sullivan’s motion to avoid the judicial lien. The BAP affirmed, finding that while CRP’s lien may not have been enforceable, it could still be avoided. In re O’Sullivan, 544 B.R. 407 (B.A.P. 8th Cir. 2016). Read More
Posted by NCBRC - November 23rd, 2016
A homestead that is exempt in chapter 7 is not part of the bankruptcy estate and, therefore, proceeds from its post-petition sale do not enter the estate for purposes of distribution to creditors. In re Montemayor, 547 B.R. 684 (Bankr. S.D. Tex. 2016) (Case No. 14-10031, Adv. Proc. No. 15-1003).
Juan Jose Montemayor filed for chapter 7 bankruptcy and claimed an exemption in a half-interest in real property as his homestead under Texas law. Post-petition he sold his interest in the property. With some of the proceeds, he bought land and commenced construction on a new residence. He deposited the rest of the proceeds into a bank account for use in building his new residence. When he had not invested all the proceeds in a new homestead within six months, as required by Texas homestead law, the trustee moved for an order requiring him to turn over the funds. The case was before the court on the trustee’s motion for summary judgment. Read More
Posted by NCBRC - November 18th, 2016
Where the debtor’s historical use of bankruptcy filings suggested improper purpose to hinder and delay creditors, the trustee’s adversary complaint stated a claim for violation of section 727(a)(2)(A). Rupp v. Pearson (In re Pearson), No. 15-4191 (10th Cir. Nov. 7, 2016).
Ms. Pearson filed a chapter 13 bankruptcy petition and had a plan confirmed in which she agreed to contribute her expected tax refund to the extent it exceeded $2,000. However, she kept the entire $4,829 refund and spent it on non-exempt personal items. As a result, the bankruptcy court dismissed her chapter 13 case. Two week later, she filed the current chapter 7 bankruptcy petition. The trustee filed an adversary complaint seeking to have Ms. Pearson’s discharge denied due to her misappropriation of the tax refund with intent to defraud creditors, in violation of section 727(a)(2)(A). Read More
Posted by NCBRC - November 16th, 2016
Vehicles subject to title pawn are property of the bankruptcy estate where the debtors filed their bankruptcy petitions prior to expiration of the redemption period. Title Max v. Northington, No. 16-172 (M.D. Ga. Oct 27, 2016).
In this consolidated appeal, the chapter 13 debtors, Jonathan Northington and Gustavius Wilber, pawned their vehicles with Title Max. Under Georgia law, the debtors had the right to redeem the vehicles within thirty days of maturation of the pawn transaction by paying the remaining principal, plus interest and pawnshop fees. Both debtors filed for bankruptcy before the redemption period expired and Title Max filed proofs of claims as a secured creditor. Read More
Posted by NCBRC - November 11th, 2016
Where the debtor failed to timely appeal the bankruptcy court’s holding that it lacked jurisdiction over his motion for damages based on violation of the automatic stay, the BAP did not have jurisdiction to rule on the debtor’s petition for writ of mandamus concerning that same holding. Ozenne v. Chase Manhattan Bank, No. 11-60039 (9th Cir. Nov. 9, 2016). Read More
Posted by NCBRC - November 8th, 2016
Sovereign immunity precludes a damages award for emotional distress based on the IRS’s violation of the automatic stay. Hunsaker v. United States, No. 16-386 (D. Or. Oct. 20, 2016). The district court reversed the bankruptcy court’s damage award (blogged here), finding that sovereign immunity can be waived only by “unequivocal, clear statutory language. F.A.A. v. Cooper, 132 S. Ct. 1441, 1448 (2012).” Read More
Posted by NCBRC - November 3rd, 2016
“If a creditor wishes to participate in the distribution of a debtor’s assets under a Chapter 13 plan, it must file a timely proof of claim.” Spokane Law Enforcement Fed’l Credit Union v. Barker, No. 14-60028 (9th Cir. Oct. 27, 2016).
Marcella Lee Barker filed her chapter 13 petition, and the Spokane Law Enforcement Federal Credit Union was notified of the filing and the deadline for filing a proof of claim. In the schedules accompanying her proposed plan, Ms. Barker listed a secured loan from the Credit Union in the amount of over $6,600 and an unsecured loan in the amount of over $47,000. Four months after the filing deadline had elapsed, the Credit Union filed its proofs of claim. The Credit Union sought an order from the bankruptcy court to allow the claims. The court denied the motion and disallowed the claims as untimely. The BAP for the Ninth Circuit affirmed. Read More