The 9th Circuit Confirms that Chapter 13 Debtors Have an Absolute Right to Dismiss
Posted by Jim Haller - October 1st, 2024
In TICO Constr. Co. v. Van Meter (In re Powell), Case No. 22-60052 (9th Cir. October 1, 2024) the court considered whether a debtor has an absolute right to dismiss a Chapter 13 bankruptcy case under 11 U.S.C. § 1307(b), even if the debtor is potentially ineligible for Chapter 13 relief at the time of filing due to bad faith.
Holding: The court held that a debtor has an absolute right to voluntarily dismiss their Chapter 13 bankruptcy case under 11 U.S.C. § 1307(b), regardless of bad faith allegations or ineligibility for Chapter 13 relief at the time of filing. Read More
Debtor’s Right to Propose Chapter 13 Plans Affirmed by Fourth Circuit: Flexibility Over Local Form Defaults
Posted by Jim Haller - August 13th, 2024
Holding
The Fourth Circuit Court of Appeals reversed the district court’s decision, holding that Sheila Ann Trantham had standing to appeal the bankruptcy court’s ruling and that the bankruptcy court erred in denying confirmation of her Chapter 13 plan based on a local form’s vesting provision. The court affirmed that a debtor has the right to propose a Chapter 13 plan with provisions that may deviate from local form defaults, provided they comply with the Bankruptcy Code. Read More
Posted by Jim Haller - July 31st, 2024
The Sixth Circuit in Wylie v Miller is reviewing the decision of the District Court for the Eastern District of Michigan. The district court reversed the bankruptcy court’s decision, holding that the bankruptcy court erred in applying a per se rule that the debtors’ post-petition application of their tax overpayment to future tax liabilities constituted an intent to hinder the trustee. Read More
Posted by Jim Haller - July 31st, 2024
The 9th Circuit Court in Nance v Warfield is considering whether to overrule the District Court of Nevada which held that the bankruptcy court erred in overruling the trustee’s res judicata-based objection to the debtor’s federal exemptions in the property and RV. The court also concluded that the bankruptcy court exceeded its authority by sua sponte granting an exemption for the RV under the federal wildcard exemption. Read More
Posted by Jim Haller - July 31st, 2024
The 4th Circuit Court is considering an appeal from the District Court for the Northern District of West Virginia which dismissed the Debtor’s FDCPA complaint due to lack of standing since his debt was discharged in a prior chapter 7 bankruptcy. Read More
Posted by Jim Haller - July 31st, 2024
The Ninth Circuit held that the failure to object to a claimed homestead exemption within the 30-day period does not allow the debtor to exempt more than the statutory limit when the case originated as a Chapter 11 bankruptcy and included conflicting representations regarding the exemptions. Read More
4th Circuit Holds a Deferred Entry of Conviction by Probation Before Judgment is Non-Dischargeable as a “Conviction” Under Section 1328(a)(3)
Posted by Jim Haller - June 28th, 2024
In In re Feyijinmi, the 4th Circuit held that a debt for restitution ordered as part of a criminal conviction is nondischargeable under 11 U.S.C. § 1328(a)(3), even if the conviction was expunged or the restitution was later converted to a civil matter. Additionally, the State’s characterization of the debt on its proof of claim as “court fees” did not change its nondischargeable nature. Read More
The Supreme Court Holds That the Bankruptcy Code Does Not Authorize a Nondebtor Discharge Without the Consent of the Claimants
Posted by Jim Haller - June 27th, 2024
Holding
On June 27, 2024, the Supreme Court in a 5-4 decision in Harrington v Purdue Pharma, Case No. 23-124 (2024) held that the Bankruptcy Code does not authorize a release and injunction that, as part of a Chapter 11 reorganization plan, effectively discharges claims against nondebtors without the consent of affected claimants.
Facts
Purdue Pharma, owned by the Sackler family, faced numerous lawsuits due to its role in the opioid crisis. The Sacklers withdrew approximately $11 billion from Purdue before the company filed for Chapter 11 bankruptcy in 2019. As part of Purdue’s reorganization plan, the Sacklers proposed to return $4.3 billion to the bankruptcy estate in exchange for a judicial order releasing them from all opioid-related claims.
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Posted by Jim Haller - June 23rd, 2024
In In re Cooper, Case No. 24-1084 (9th Cir. 2024) the Ninth Circuit is determining whether the Ninth Circuit B.A.P. erred when it held that the Social Security Administration (SSA) could recoup an overpayment of Social Security Disability Insurance (SSDI) benefits from Darrin Cooper’s ongoing SSDI payments, without violating the discharge injunction in bankruptcy. Read More
Posted by Jim Haller - June 23rd, 2024
In Mission Hen LLC v Lee, Case No. 23-4220 (9th Cir. 2023), the Ninth Circuit is considering whether the Ninth Circuit B.A.P. erred by concluding that a chapter 13 plan may modify and bifurcate an undersecured lien secured by the debtor’s principal residence pursuant to 11 U.S.C. § 1322(c)(2). Read More
