The Fourth Circuit is poised to review the bankruptcy court’s decision that a debtor may rely on the 60-day rollover rule to withdraw funds from his IRA, use them for living expenses, and redeposit them within 60 days without their losing their exempt status in bankruptcy. In re Rudd, 2013 WL 2684541 (Bankr. E.D. N.C., June 12, 2013). [Read more…] about 60-Day Rollover Does Not Disqualify IRA Funds from Exemption
State Exception to Homestead Exemption Pre-empted
The Bankruptcy Appellate Panel for the Eighth Circuit found that a Missouri exception to its homestead exemption was preempted by section 522(c) of the federal exemption scheme. In re Moore, 495 B.R. 1 (B.A.P. 8th Cir. July 8, 2013). [Read more…] about State Exception to Homestead Exemption Pre-empted
FDCPA and Bankruptcy Law Not Necessarily Mutually Exclusive
The Third Circuit found that a debtor may maintain an action under the FDCPA even though the conduct giving rise to the claim is also addressed by bankruptcy rules. Simon v. FIA Card Services (In re Simon), No. 12-3393 (3d Cir. Oct. 7, 2013). [Read more…] about FDCPA and Bankruptcy Law Not Necessarily Mutually Exclusive
Fifth Circuit Applies Judicial Estoppel Doctrine
In a disturbing trend favoring personal injury defendants over debtors who, without actual intent to deceive, fail to inform the bankruptcy court of a potential lawsuit, the Fifth Circuit applied the doctrine of judicial estoppel to prevent the debtor from benefiting from her state lawsuit. Flugence v. Axis Surplus Ins.(In re Flugence), No. 13-30073 (5th Cir. Oct. 4, 2013). [Read more…] about Fifth Circuit Applies Judicial Estoppel Doctrine
Student Loan May Be “Special Circumstance” under Section 707(b)(2)(B)(i)
In a fact-specific analysis, the court in In re Bradley found that the debtors’ nondischargeable student loan debt constituted a “special circumstance” that could be used to adjust current monthly income to rebut the presumption of abuse otherwise created by the means test calculation under section 707(b). 2013 WL 4663125 (Bankr. S.D. Ala. Aug. 30, 2013). [Read more…] about Student Loan May Be “Special Circumstance” under Section 707(b)(2)(B)(i)
Nondischargeability of Debt Not Per Se “Cause” for Lifting of Stay
The Eleventh Circuit vacated the district court’s finding that nondischargeability of a debt, standing alone, is “cause” to grant relief from stay under section 362(d)(1). Disciplinary Board of the Supreme Court of Pa. v. Feingold (In re Feingold), No. 12-13817 (Sept. 17, 2013). [Read more…] about Nondischargeability of Debt Not Per Se “Cause” for Lifting of Stay
District Court in Colorado Declines to Adopt McCoy Approach to Late-Filed Tax Returns
In In re Mallo, No. 13-98 (Sept. 11, 2013), and In re Martin, No. 12-3380 (Sept. 23, 2013), the District Court in Colorado was faced with determining under what circumstances a late-filed tax return, filed after the IRS had conducted its own assessment, could be deemed a “return” within the meaning of section 523(a)(1)(B)(i). [Read more…] about District Court in Colorado Declines to Adopt McCoy Approach to Late-Filed Tax Returns
Hardship Test Supports Discharge of Student Loan
The Bankruptcy Appellate Panel for the Eighth Circuit found that there was insufficient evidence of the student loan debtor’s “reasonably reliable future” income to support the bankruptcy court’s finding that her student loan was nondischargeable. Conway v. National Collegiate Trust (In re Conway), No. 13-6016 (Aug. 21, 2013). [Read more…] about Hardship Test Supports Discharge of Student Loan
SunTrust Consent Order Payment Not Part of Estate
After the chapter 7 debtors received their discharge they disclosed to the trustee that they had received funds as a result of a settlement agreement between the Federal Reserve and SunTrust Mortgages. They moved to reopen their bankruptcy and amend their schedules to reflect the payment. They also sought to exempt the payment as related to a “potential wrongful foreclosure claims against SunTrust Mortgage” under applicable state exemption laws. The trustee objected to the exemption and sought to administer the payment as part of the bankruptcy estate.
The issue turned on whether the payment was a “legal or equitable interest” of the debtors that existed as of the commencement of the case. The bankruptcy court found that it was not. In re Vanwart, No. 13-515 (Bankr. E.D. N.C. Aug. 27, 2013).
[Read more…] about SunTrust Consent Order Payment Not Part of Estate
Creditor Lacks Standing to Move for Dismissal under 707(b)
In In re Gandy, No. 11-30369 (Bankr. E.D. Tenn. July 12, 2013), the court found that a creditor had no standing under section 707(b) to seek dismissal of a chapter 7 petition, after conversion from chapter 13, where debtor’s petition documents showed him to be below-median. [Read more…] about Creditor Lacks Standing to Move for Dismissal under 707(b)