Despite repeated bludgeoning by the courts for its conduct, Wells Fargo Home Mortgage, Inc., has tenaciously and relentlessly fought against accepting responsibility for misapplying mortgage payments and charging unapproved fees. Now the district court for the Eastern District of Louisiana has upheld a punitive damages award of over $3 million against Wells Fargo. Jones v. Wells Fargo, No. 12-1362 (E.D. La. March 19, 2013). [Read more…] about $3 Million Punitive Damage Award Upheld against Wells Fargo
Social Security Income May Not Be Considered in Good Faith Analysis
The Ninth Circuit today held that “Congress’s adoption of the BAPCPA forecloses a court’s consideration of a debtor’s Social Security income or a debtor’s payments to secured creditors as part of the inquiry into good faith under 11 U.S.C. § 1325(a).” Drummond v. Welsh (In re Welsh), No. 12-60009 (9th Cir. March 25, 2013), aff’g Drummond v. Welsh (In re Welsh), 465 B.R. 843 (B.A.P. 9th Cir. 2012).
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Post-Petition Bonus Not Part of the Bankruptcy Estate
In an important win for debtors, the BAP for the Eighth Circuit found that, under section 541 a debtor’s post-petition bonuses were not property of her bankruptcy estate. Klein-Swanson v. Seaver (In re Klein-Swanson), No. 12-6054 (B.A.P. 8th Cir. March 22, 2013). [Read more…] about Post-Petition Bonus Not Part of the Bankruptcy Estate
Attorney Fees for Litigating Damage Actions Based On Stay Violation
The Ninth Circuit decision in Sternberg v. Johnston, reared its ugly head to limit recovery of attorney fees in a stay violation action in the recent case of Check Into Cash v. Snowden (In re Snowden), No. 12-1095 (W.D. Wash. March 11, 2013). Snowden came to the district court on appeal and cross-appeal of the Bankruptcy Court’s award of damages for emotional distress and punitive damages resulting from Check Into Cash (CIC)’s violation of the automatic stay.
After affirming both the emotional distress and punitive damage awards the court rejected the debtor’s invitation to revisit its earlier decision in a previous appeal that the award of attorney fees was properly limited, under Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), cert. denied, 131 S. Ct. 102 (2010), to those fees pre-dating the adversary proceeding. [Read more…] about Attorney Fees for Litigating Damage Actions Based On Stay Violation
Bank is Sanctioned for Rule 3001 Violation
A bankruptcy court in Colorado sanctioned FirstBank for failure to comply with the itemization requirements of Rule 3001. In re Jimenez, No. 12-26282 (Bankr. Colo. Feb. 1, 2013). [Read more…] about Bank is Sanctioned for Rule 3001 Violation
Social Security May Not Be Considered in 707(b)(3)(B) Totality of Circumstances Test
The Catch-22 of considering social security income for a Chapter 7 abuse analysis while excluding its use in a Chapter 13 plan was recently addressed by a bankruptcy court in the Central District of California. In In re Suttice, No. 12-21006 (Bankr. C.D. Cal. Jan. 9, 2013), the debtors were an 85-year-old husband and a 69-year-old wife, both with significant medical concerns. The bulk of their income consisted of social security benefits, pension and retirement accounts, and Veterans Benefits with a small amount coming from family contributions. Their combined income minus expenses left them with a monthly surplus of $896.94. The trustee sought to dismiss their Chapter 7 bankruptcy on the basis that the totality of the circumstances indicated abuse of bankruptcy under section 707(b)(3)(B). Specifically, the trustee sought to have the debtors’ social security income considered in their ability to pay. [Read more…] about Social Security May Not Be Considered in 707(b)(3)(B) Totality of Circumstances Test
Property Associations Lose Battle of the Liens in Two Florida Cases.
In two cases out of the Middle District of Florida, property associations fought for priority over mortgage lenders in order to prevent their liens from being stripped as wholly unsecured. In re Plummer, No. 12-3870 (Bankr. M.D. Fla. Jan. 14, 2013); In re Buckner, No. 12-4962 (Bankr. M.D. Fla. Jan. 17, 2013). The Associations failed to convince the court, however, and, in Plummer, the court permitted the lien stripping under section 1322(b)(1), while in Buckner, the lien was stripped under section 506(d). [Read more…] about Property Associations Lose Battle of the Liens in Two Florida Cases.
Applicable Commitment Period Where No Projected Disposable Income
The Bankruptcy Court for the Eastern District of North Carolina found that the applicable commitment period outlined in section 1325(b)(1)(B) does not apply to above-median debtors with zero or negative disposable income and that early termination of the plan does not alter the debtor’s projected disposable income calculation. In re Ballew, 12-4059 (Bankr. E.D. N.C. Jan. 11, 2013). [Read more…] about Applicable Commitment Period Where No Projected Disposable Income
U.S. Bank Fails to Establish Standing to Seek Relief from Stay to Foreclose
The Bankruptcy Court for the Southern District of New York denied U.S. Bank’s motion for relief from stay on the basis that U.S. Bank had failed to show that it had standing to obtain such relief. In re Idicula, No. 12-12120 (Bankr. S.D. N.Y. Jan. 10, 2013). [Read more…] about U.S. Bank Fails to Establish Standing to Seek Relief from Stay to Foreclose
Bankruptcy-Specific Exemptions Found Constitutional by Tenth Circuit BAP
The Bankruptcy Appellate Panel for the Tenth Circuit found that Kansas’s bankruptcy-only exemption scheme, under which a debtor in bankruptcy is permitted to exempt his Earned Income Tax Credit, is constitutional. Williamson v. Westby (In re Westby), No. 12-27 (B.A.P. 10th Cir. Feb. 4, 2013). [Read more…] about Bankruptcy-Specific Exemptions Found Constitutional by Tenth Circuit BAP