The Sixth Circuit recently affirmed the lower courts’ holding that the IRS’s failure to immediately issue a post-petition tax refund was not a violation of the automatic stay. In re Harchar, No. 10-4201 (6th Cir. Sept. 12, 2012). [Read more…] about IRS Refund “Freeze” Not in Violation of Automatic Stay
Arbitration vs. Bankruptcy
Finding, under the circumstances of the case, that the Federal Arbitration Act conflicts with the underlying purposes of the Bankruptcy Code, the Ninth Circuit upheld the denial of the creditor’s motion to compel arbitration where such arbitration would necessarily have resolved a core bankruptcy issue. In re Eber, No. 11-55341 (9th Cir. July 9, 2012). [Read more…] about Arbitration vs. Bankruptcy
Fifth Circuit Affirms Class Certification Challenging Fee Collection Practices
The Fifth Circuit found that the bankruptcy court did not abuse its discretion when it certified a class of plaintiffs, under Rule 23(b)(2), who challenged certain fee-charging and collection practices of Countrywide Home Loans. Rodriguez v. Countrywide Home Loans, No. 11-40056 (5th Cir. Sept. 14, 2012). [Read more…] about Fifth Circuit Affirms Class Certification Challenging Fee Collection Practices
Life After Bankruptcy
Vicki Elmer at the New York Times has written about getting a mortgage after filing for bankruptcy (here). The bottom line is that bankruptcy isn’t the end of the world. Indeed, for many, bankruptcy provides a much needed fresh start, putting people on sounder financial footing and allowing them to rebuild their credit. It is even possible to get a mortgage.
Creditor Found to Have No Obligation to Foreclose on Surrendered Property
The District Court for the Southern District of Georgia found that a bank has no affirmative duty under section 1325(a)(5)(C) to transfer title to surrendered property out of the debtor’s name. Arsenault v. JP Morgan Chase, No. 11-106 (S.D. Ga. Aug. 27, 2012). [Read more…] about Creditor Found to Have No Obligation to Foreclose on Surrendered Property
Eighth Circuit Puts Off Lien-Stripping in Chapter 13 Issue for Another Day
In a cranky opinion chastising “judicially careless attorneys” and remanding the case to the bankruptcy court on procedural grounds, the Eighth Circuit sidestepped the issues of whether a wholly unsecured mortgage can be stripped in chapter 13, and whether, if such stripping is allowed, availability of discharge is a necessary prerequisite to it. In re Fisette, No. 11-3119 (8th Cir. Sept. 12, 2012). [Read more…] about Eighth Circuit Puts Off Lien-Stripping in Chapter 13 Issue for Another Day
Turnover Amicus Brief
NACBA has filed an amicus brief on the issue of whether a creditor must return collateral that was repossessed prior to bankruptcy once the creditor learns of the bankruptcy filing. Weber v. SEFCU, No. 12-1632 (2d Cir.). NACBA argues that section 542(a) imposes an affirmative duty on a creditor in possession of collateral to turn it over to the bankruptcy estate and that failure to do so is an unlawful “exercise of control over the property” and a violation of the automatic stay under section 362(a) meriting sanctions.
Thanks to Ray DiGuiseppe for writing NACBA’s brief.
Kagenveama Survives Direct Assault
Wielding Hamilton v. Lanning, 130 S. Ct. 2464 (2010), the trustee in the Ninth Circuit case of In re Flores, launched a full-scale attack on Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008). Kagenveama won. The Ninth Circuit stood by its previous position that an above-median debtor with zero or negative disposable income does not need to confirm a 60 month plan under section 1325(b). Danielson v. Flores (In re Flores), No. 11-55452 (9th Cir. Aug. 31, 2012). NACBA assisted in drafting the debtor’s brief in this case. [Read more…] about Kagenveama Survives Direct Assault
No Lien Stripping under Section 506(d)
The Tenth Circuit has declared what will surprise few: that a lien may not be stripped under section 506(d) in a chapter 13 case. Woolsey v. Citibank, No. 11-4014 (10th Cir. Sept. 4, 2012). [Read more…] about No Lien Stripping under Section 506(d)
Condominium Lien May Be Partially Avoided
Interpreting the condominium documents and state law, the Western District of Pennsylvania found that the debtor could partially avoid a lien based upon unpaid condominium assessments. Young v. 1200 Buena Vista Condominiums, No. 12-786 (W.D. Pa. Aug. 27, 2012), rev’g, 467 B.R. 792 (Bankr. W.D. Pa. 2012). The case turned on whether a lien created through the operation of the condominium declaration and by-laws and state statute, 68 Pa. C.S. § 3315, constituted a “security interest” under Bankruptcy Code section 101(51) which would be subject to the anti-modification provision of section 1322(b), or a “statutory lien” under section 101(53) which could be bifurcated into secured and unsecured portions. [Read more…] about Condominium Lien May Be Partially Avoided