National Consumer Bankruptcy Rights Center

Protecting The Rights Of Consumer Debtors In Bankruptcy

Attorney fees

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Trustee $65,000 Fee Application Denied

“Trustee’s plan of action from the minute he was assigned these Chapter 7 cases was abundantly clear: he sought to manufacture equity through the Stipulations and Carve-Outs with the IRS to sell the Homesteads and generate funds that would primarily benefit Trustee, Counsel, and other bankruptcy professionals, while only minimally benefitting unsecured creditors.” Based on this conclusion, the Bankruptcy Appellate Panel for the Tenth Circuit, in a lengthy opinion, upheld the denial of over $65,000.00 in fees for the chapter 7 trustee and his counsel. Jubber v. Bird (In re Bird), Nos. 16-39, Jubber v. Christensen (In re Christensen), 16-40 (B.A.P. 10th Cir. Nov. 30, 2017). [Read more…] about Trustee $65,000 Fee Application Denied

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Attorney Fees Paid Out of Undistributed Funds

Undistributed funds in the hands of the Chapter 13 trustee at the time of the debtor’s voluntary dismissal revest in the debtor, and where the debtor’s contract with her bankruptcy counsel provided for payment of attorney’s fees out of undistributed funds there was “cause” for the court to order such payment. In re Beaird, No.16-21725 (Bankr. D. Kans. Sept. 11, 2017).

When Ms. Beaird voluntarily dismissed her Chapter 13 plan, the trustee held $13,788.87 in undistributed funds earmarked for distribution to Rushmore Loan Management Corp. The accumulation of funds was a result of Rushmore’s delay in filing its proof of claim until approximately ten months after Ms. Beaird filed her petition. [Read more…] about Attorney Fees Paid Out of Undistributed Funds

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American Servicing Co. v. Schwartz-Tallard, No. 12-60052 (9th Cir.)

Type: Amicus
Date: January 23, 2015
Description: Whether a debtor can obtain an award of attorney fees under section 362(k) for prosecuting stay violation. Seeking to overturn Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010).
Result: Judgment affirmed, August 29, 2015, Petition for rehearing filed September 12, 2014; En banc decision affirming judgment of BAP and overturning Sternberg.

Schwartz-Tallard opinion

Schwartz-tallard NACBA 9th Jan 2015

Schwartz Tallard 9th Cir En banc opinion

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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

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Berliner v. Pappalardo (In re Puffer), No. 11-1831 (1st Cir.)

NACBA has filed an amicus brief opposing the imposition of a bright line rule prohibiting attorney-fee-only chapter 13 cases as being filed in bad faith. Berliner v. Pappalardo (In re Puffer), No. 11-1831 (1st Cir.). The brief emphasizes that bad faith is necessarily a case-by-case, fact specific inquiry, and that there exist legitimate, good faith, reasons for seeking chapter 13 relief solely to make payments toward attorney fees and administrative costs. Because debtors eligible for chapter 7 relief frequently cannot afford to pay the attorney fees to file their cases, chapter 13 presents a viable alternative and nothing in the Code prohibits such filing. NACBA member David Baker filed the brief on NACBA’s behalf.
Brief