The court denied a motion to dismiss the debtors’ class action adversary complaint against Wells Fargo based on Wells Fargo’s inaccurate notices to various bankruptcy courts that the debtors’ loans had been placed in COVID forbearance at the debtors’ request. Harlow v. Wells Fargo & Co., No. 17-71487, Adv. Proc. No. 20-7028 (Bankr. W.D. Dec. 12, 2022). [Read more…] about Wells Fargo and False Loan Forbearance Class Action
Unemployment Overpayment Not a Priority Tax Debt
Kentucky’s Office of Unemployment Insurance’s claim for an overpayment of unemployment compensation benefits was not entitled to priority in the debtor’s chapter 13 case where the nature of the claim was better characterized as a “penalty” than a “tax.” In re Clardy, No. 22-30089 (Bankr. W.D. Ky. Dec. 1, 2022). [Read more…] about Unemployment Overpayment Not a Priority Tax Debt
Who Would Win in a Fight, Allowed Claim or Confirmed Plan?
The winner? Confirmed plan. Where the mortgagee had notice and opportunity to object to confirmation of the debtor’s Chapter 13 plan providing for mortgage arrears in the amount of approximately half the mortgagee’s allowed proof of claim, the mortgagee could not be heard, at the debtors’ successful completion of their plan, to complain that the debtors still owed pre-petition arrears. In re Edelstein, No. 17-11461 (Bankr. N.D. Ill. Nov. 7, 2022). [Read more…] about Who Would Win in a Fight, Allowed Claim or Confirmed Plan?
Post-Petition Fee Agreement a No-Go
A fee agreement that purports to attach an attorney’s lien on the debtor’s as exempt personal property is unenforceable under section 526(a) where state law allows such liens only on non-exempt property or on exempt personal property for specified exceptions, not including attorney’s fees. In re Turner, No. 22-41570 (Bankr. D. Minn. Dec. 2, 2022). [Read more…] about Post-Petition Fee Agreement a No-Go
First Circuit Dodges Late-Filed Tax Return Issues
Faced with the question of whether the debtor’s tax debt based on a late-filed tax return was excepted from discharge, the circuit declined to reexamine its holding in Fahey where it applied the strict “one day late” rule, found the debtor waived his argument in support of an objective test that does not consider timing of filing, and instead, held the debtor’s late-filed tax return did not meet Beard’s subjective test for a “return.” In re Kriss, 21-1206 (1st Cir. Nov. 22, 2022). [Read more…] about First Circuit Dodges Late-Filed Tax Return Issues
Bruce v. Citigroup, Inc., No. 22-1000 (2d Cir.)
Type: Amicus
Date: November 23, 2022
Description: Whether bankruptcy court has authority to adjudicate a national class action claim for a violation of the discharge injunction. Debtor is the appellee.
Result: Pending.
Exemption Amount in Lien Avoidance Action
For purposes of lien avoidance under section 522(f), the debtor was able to claim a homestead exemption in the amount of the California exemption in effect at the time of his bankruptcy petition, despite California law that fixed the exemption amount at the time of lien creation. Barclay v. Boskoski (In re Boskoski), No. 22-55098 (9th Cir. Nov. 14, 2022). [Read more…] about Exemption Amount in Lien Avoidance Action
Tribal Sovereign Immunity Waived
In a succinct opinion, the Ninth Circuit reaffirmed its 2004 decision that Congress abrogated tribal sovereign immunity with respect to the automatic stay. Numa Corp. v. Diven, No. 22-15298 (9th Cir. Nov. 14, 2022) (unpublished).
NCBRC and NACBA filed an amici brief in support of the debtor in this case. [Read more…] about Tribal Sovereign Immunity Waived
Ovation Denied Keys to the Candy Store
A bankruptcy court rejected the tax lender’s challenge to the district’s Mandatory Form Chapter 13 Plan where it found the lender, whose claim would be fully paid through that plan, simply did “not want this Court’s oversight in approving claims for reimbursement for any post-petition expense charges.” In re Martin, No. 22-30148 (Bankr. S.D. Tex. Nov. 14, 2022). [Read more…] about Ovation Denied Keys to the Candy Store
Pawn Contract Disavowing Bankruptcy Intent Is Enforceable
A pawn agreement requiring the borrower to affirm that she was not in bankruptcy and did not intend to file for bankruptcy was not unenforceable as against public policy because the agreement did not commit the borrower to an agreement not to file for bankruptcy at a later date. TitleMax v. Roby, No. 21-630 (M.D. Ala. Sept. 19, 2022). [Read more…] about Pawn Contract Disavowing Bankruptcy Intent Is Enforceable