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FDCPA Not Repealed by Bankruptcy Code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 [Read more…] about FDCPA Not Repealed by Bankruptcy Code
Attorney Fees Are Actual Damages for Stay Violation
Under the plain language of section 362(k)(1), costs and attorney fees are “actual damages” for violation of the automatic stay. Parker v. Credit Central South, Inc., No. 15-11204 (11th Cir. Dec. 17, 2015). [Read more…] about Attorney Fees Are Actual Damages for Stay Violation
POC for Time-Barred Debt May Violate FDCPA
The Bankruptcy Court for the Northern District of Illinois added to its body of law finding that a debt collector may violate the FDCPA by filing a proof of claim for a time-barred debt. Davenport v. Calvary Investments (In re Davenport), No. 14-30261, Adv. Pro. 15-559 (Bankr. N.D. Ill. Dec. 14, 2015). [Read more…] about POC for Time-Barred Debt May Violate FDCPA
Student Loan Discharged Despite IBRP
The debtor met his burden of establishing undue hardship for discharging his student loan despite eligibility for an income-based repayment program. Abney v. United States Dep’t of Educ. (In re Abney), 2015 Bankr. LEXIS 3849, No. 15-60501, Adv. Pro. 15-6027 (Bankr. W.D. Mo. Nov. 10, 2015). [Read more…] about Student Loan Discharged Despite IBRP
Code Preempts State Exemption Exception
When a state law that precludes the application of the debtor’s state-created homestead exemption conflicts with federal bankruptcy law, state law must yield. In re Smither, No. 14-40607 (Bankr. D. Mass. Nov. 30, 2015). [Read more…] about Code Preempts State Exemption Exception
Debtor Equitably Estopped from Claiming Homestead Exemption
The debtor’s unfair manipulation of her state homestead exemption claim justified denial of the claim under principles of equitable estoppel. Lua v. Miller (In re Lua), No. 15-04026 (C.D. Cal. Nov. 10, 2015). [Read more…] about Debtor Equitably Estopped from Claiming Homestead Exemption