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
Tuition Credit Dischargeable
Where the debtor did not actually receive any funds, her debt based on a tuition credit agreement with a for-profit institution was not excepted from discharge under section 523(a)(8)(A)(ii). Institute of Imaginal Studies v. Christoff, No. 14-1336 (B.A.P. 9th Cir. March 27, 2015). [Read more…] about Tuition Credit Dischargeable
Co-Debtor’s Death Drops Debtor to Below-Median Permitting Reduced ACP
When the major contributor to the debtors’ joint chapter 13 plan died, the surviving spouse fell to below median status and the applicable commitment period fell from 5 years to 3 years. In re Childers, No. 10-10405 (Bankr. N.D. Tex. Jan. 26, 2015). [Read more…] about Co-Debtor’s Death Drops Debtor to Below-Median Permitting Reduced ACP
IRS Tax Lien Secured by All Debtor’s Property
An IRS tax lien attaches to all of debtor’s property, both personal and real, therefore, so long as there is some equity to which it can attach it may not be stripped off. In re Blackburn, No. 12-31658 (Bankr. N.D. Fla. Feb. 3, 2015). [Read more…] about IRS Tax Lien Secured by All Debtor’s Property
Supreme Court Hears Oral Argument in Ch. 7 Lien Stripping Cases
Today, the Supreme Court heard oral argument in Bank of America, N.A. v. Caulkett and Bank of America, N.A., v. Toledo-Cardona. At issue is whether chapter 7 debtors may strip off junior mortgages where there is no value in the collateral to support the junior lien. Here’s the transcript. Well worth the read!
Debtor Lacks Standing to Bring Adversary Complaint Based on Pre-Petition Claims
The debtor’s pre-petition TILA claims were part of his chapter 7 bankruptcy estate and, therefore, only the trustee had standing to bring those claims while the bankruptcy was pending. Bernstein v. Wells Fargo (In re Bernstein), No. 14-65054, Adv. Proc. 14-5306 (Bankr. N.D. Ga. Jan. 2, 2015). [Read more…] about Debtor Lacks Standing to Bring Adversary Complaint Based on Pre-Petition Claims
Fourth Circuit Addresses CashCall’s Arbitration Clause
In a lengthy, per curiam opinion, the Fourth Circuit affirmed in part and reversed in part a district court decision declining to enforce CashCall’s notorious arbitration clause. Moses v. CashCall, No. 14-1195 (4th Cir. March 16, 2015). [Read more…] about Fourth Circuit Addresses CashCall’s Arbitration Clause
Right to Cure Preempts State Law Property Rights
Bankruptcy law enhances and expands a debtor’s state law property rights by specifying the time within which a debtor may cure a mortgage default. In re Ausburn, No. 16153 (Bankr. E.D. Ark. Feb. 10, 2015). [Read more…] about Right to Cure Preempts State Law Property Rights
Ocwen Stuck with Debtor’s Proof of Claim for $1
Relying on equitable principles, the court declined to allow Ocwen’s late-filed proof of claim after the debtor filed a proof of claim on its behalf in the amount of $1. In re Egan, No. 14-36831, __ B.R. __ (Bankr. S.D. N.Y. March 2, 2015). [Read more…] about Ocwen Stuck with Debtor’s Proof of Claim for $1
Chapter 13 Dismissed When Infeasibility Discovered at End of Plan
After making plan payments for fifty-eight months, the debtors’ chapter 13 was dismissed due to infeasibility that was built into the confirmed plan. Schlegel v. Billingslea (In re Schlegel), No. 14-1132 (B.A.P. 9th Cir. Feb. 25, 2015). [Read more…] about Chapter 13 Dismissed When Infeasibility Discovered at End of Plan