A fee arrangement bifurcating the chapter 7 bankruptcy attorney’s representation into separate pre-petition and post-petition agreements violated sections 526 and 528 and was void. In re Siegle, No. 21-42321 (Bankr. D. Minn. May 19, 2022). The chapter 7 debtor’s counsel used a bifurcated fee system under which he offered a pre-petition fee agreement which obligated […]
Author Archives: NCBRC
Bankruptcy Court Empowered to Award Appellate Attorney’s Fees
June 1, 2022 – 2:07 pm
A “bankruptcy court’s traditional power to impose contempt sanctions carries with it the authority to award damages and attorneys’ fees – including appellate attorneys’ fees.” Law Offices of Francis J. O’Reilly, Esq. v. Selene Finance L.P. (In re DiBattista), No. 20-4067 (2d Cir. May 17, 2022). After the debtor received his chapter 7 discharge, his […]
Stay Still Attaches to Undisclosed Property 30 Years after Bankruptcy
May 26, 2022 – 12:59 pm
Plaintiff’s attorneys were liable for monetary contempt sanctions for violating the automatic stay due to their failure to investigate the plaintiff’s bankruptcy petition which was filed decades earlier to determine whether he had disclosed his interest in mineral rights in land that was the subject of a current state lawsuit. In re McConathy, No. 90-13449 […]
No Exemption for IRA Created with Excessive Contribution
May 23, 2022 – 4:55 pm
A retirement annuity account funded by a rolled-over IRA in the debtor’s name which was in turn funded by a contribution in excess of that allowed for tax exempt status, may not be exempted from the debtor’s bankruptcy estate. In re Farber, No. 21-12147 (Bankr. E.D. Pa. April 26, 2022). The chapter 7 debtor sought […]
Debtor May Avoid Tax Sale under 548 but Loses Equity
May 19, 2022 – 3:45 pm
The debtor has standing to avoid a tax sale under section 548 but only to the extent of her exemption and allowed claims. She may not recover her equity in the property. Morawski v. Effect Lake, LLC., No. 20-1125 (Bankr. D.N.J. April 11, 2022). On October 3, 2016, Effect Lake purchased a tax sale certificate […]
Chapter 11 Debtor’s Amendment to File under SBRA Would Prejudice Creditor
May 16, 2022 – 2:21 pm
The debtor’s proposed amendment to file her chapter 11 petition under the newly enacted SBRA under which only the debtor could have a plan confirmed, would unduly prejudice the mortgage creditor who expended a great deal of time, expense, and effort to negotiate and obtain approval of its own plan. Ventura v. Gregory Funding, No. […]
Filing Petition Three Days after Loan Does Not Make Debt Nondischargeable
May 13, 2022 – 1:06 pm
The debtors were entitled to summary judgment on the issue of dischargeability of their payday loans despite the fact that they took out the loans three days prior to filing for bankruptcy. Ameri Best, LLC, v. Holmes, No. 18-20578, Adv. Proc. No. 18-6044 (Bankr. D. Kans. April 27, 2022). As they had done many times […]
Failure to Pay Property Taxes Precludes Discharge
May 12, 2022 – 11:53 am
A mortgage refinance agreement approved by the court is not equivalent to a motion to modify under section 1329. The debtors, who failed to pay their property taxes directly as required by their plan were not entitled to discharge even though the mortgagee paid those taxes on their behalf and the debtors and mortgagee refinanced […]
Debtor Stated Claim for Turnover of Repossessed Vehicle
April 25, 2022 – 7:25 pm
The debtor stated a claim for turnover of the fair market value of a vehicle where the creditor repossessed the vehicle post-petition but prior to the expiration of section 108(b)’s extension of time to redeem or cure a default. Milledge v. Carolina Acceptance, No.21-2968, Adv. Proc. No. 22-80001 (Bankr. D. S.C. April 7, 2022). The […]
City’s Lien on Vehicle Is Judicial and May be Avoided
April 22, 2022 – 4:11 pm
The City’s possessory lien on the chapter 7 debtor’s vehicle was judicial rather than statutory and could therefore be avoided under section 522(f). City of Chicago v. Mance, No. 21-1355 (7th Cir. April 21, 2022). After the chapter 7 debtor incurred several unpaid traffic tickets, the City of Chicago impounded her car subject to a […]
