NACBA has filed an amicus brief arguing that the Eighth Circuit Court of Appeals should find that a debt collector that files a proof of claim for a time-barred debt is subject to suit under the FDCPA. Nelson v. Midland Credit Management, No. 15-2984 (8th Cir.) (filed January 25, 2016). The brief seeks reversal of the district court’s finding that filing a proof of claim for a time-barred debt does not violate the FDCPA. [Read more…] about NACBA Weighs in on FDCPA Claims for Time-Barred Debts
Loan Servicer Lack of Good Faith in Loss Mitigation Program
Failure to tell the debtor that a down payment toward mortgage arrears was essential to loan modification rendered the loan servicer’s loss mitigation negotiations in bad faith. Rushmore Loan Management Services v. Hosking, No. 15-3999 (S.D. N.Y. Jan. 11, 2016). [Read more…] about Loan Servicer Lack of Good Faith in Loss Mitigation Program
Court Permits Strip-off of Lien for Delinquent HOA Assessments
A condominium lien which is wholly unsecured under section 506(a) by virtue of a first mortgage may be treated as unsecured in the chapter 13 plan and may be avoided through the mechanism of either a valuation hearing under Fed. R. Bankr. P. 3012 or through a stand-alone adversary proceeding. The court rejected the condo association’s attempt to benefit from the state’s “super lien” law in light of the fact that no judicial sale of the property had taken place. Sligh v. Northpoint I Condominium Assoc., No. 14-14544, Adv. Pro. No. 15-56 (Bankr. E.D. Pa. Dec. 3, 2015). [Read more…] about Court Permits Strip-off of Lien for Delinquent HOA Assessments
9th Circuit BAP Discusses Late-Filed Return Dischargeability
The Bankruptcy Appellate Panel for the Ninth Circuit found that the bankruptcy court erred by failing to follow Ninth Circuit precedent when it held that a late-filed tax return is a “return” for purposes of dischargeability so long as it meets the objective test of proper form and substance. United States v. Martin, No. 14-1180 (B.A.P. 9th Cir. Dec. 17, 2015). [Read more…] about 9th Circuit BAP Discusses Late-Filed Return Dischargeability
Previously Discharged Personal Liability Does Not Count Toward Debt Limit
The unsecured debt limit circumscribing eligibility for chapter 13 bankruptcy does not include personal liability on wholly unsecured liens where that liability was discharged in a prior chapter 7 case. Free v. Maliaer (In re Free), No. 14-1395 (B.A.P. 9th Cir. Dec. 17, 2015). [Read more…] about Previously Discharged Personal Liability Does Not Count Toward Debt Limit
FDCPA Not Repealed by Bankruptcy Code
In good news to start off the New Year, the Second Circuit has found that the Bankruptcy Code does not preclude application of the FDCPA to a claim involving a debt discharged in bankruptcy. Garfield v. Ocwen Loan Servicing, No. 15-527 (2d Cir. Jan. 4, 2016). [Read more…] about FDCPA Not Repealed by Bankruptcy Code
Debtor with No Mortgage May Take Housing Expense Deduction
May a bankruptcy debtor with no mortgage payments nonetheless take the deduction for “Local Standards: Housing and Utilities; mortgage/rent expense” when calculating her disposable income on the Means Test? The Bankruptcy Court for the Central District of Illinois said, “yes.” In re Currie, No. 14-71331 (Sept. 17, 2015). [Read more…] about Debtor with No Mortgage May Take Housing Expense Deduction
Sale of Assets Results in Disposable Income
Gliding over the crucial question of whether the sale of an asset results in income, a Florida bankruptcy court ordered the debtors, Mr. and Mrs. McMillan, to distribute a portion of their sale proceeds to their creditors as disposable income. In re McMillan, No. 11-5348 (Bankr. M.D. Fla. July 2, 2015). [Read more…] about Sale of Assets Results in Disposable Income
No Issue Preclusion Where Verdict Could Have Been Based on Negligence
The element of “willful and malicious injury” in the discharge exception under section 523(a)(6) could not be established by issue preclusion where the state court judgment could have been based on negligence. Gerard v. Gerard, No. 14-1496 (7th Cir. March 12, 2015). [Read more…] about No Issue Preclusion Where Verdict Could Have Been Based on Negligence
Agent’s Fraud Does Not Lead To Nondischargeability
When a debt is the result of fraud may the debtor still discharge it if he was not complicit in the fraud? What if the fraudulent actor was an agent of the debtor? Judge Posner of the Seventh Circuit answered both questions in the negative. Sullivan v. Glenn (In re Glenn), No. 14-3213 (7th Cir. Apr. 2, 2015). [Read more…] about Agent’s Fraud Does Not Lead To Nondischargeability