A recent BAP decision found that the debtor may not exempt her federal Child Tax Credit refund under Missouri’s exemption for “public assistance.” Hardy v. Fink (In re Hardy), No. 13-6029 (B.A.P. 8th Cir. Dec. 23, 2013) (notice of appeal to 8th Cir. filed January 2, 2014). [Read more…] about CTC Refund Not Exemptible Under Missouri Exemption Statute
NCLC Issues Paper on Foreclosure Crisis’s Effect on Credit Reporting
In addition to the 4.5 million families who lost their homes, the foreclosure crisis had another insidious and long-lasting consequence both to individual consumers and on a broader economic scale. In a new white paper issued by the National Consumer Law Center, author Chi Chi Wu explores the devastating credit reporting problems left in the wake of the Great Recession. The report explores the scope of the problem and offers a variety of policy solutions. Solving the Credit Conundrum: Helping Consumers’ Credit Records Impaired by the Foreclosure Crisis and the Great Recession. [Read more…] about NCLC Issues Paper on Foreclosure Crisis’s Effect on Credit Reporting
Supreme Court Hears Homestead Surcharge Case
The US Supreme Court heard arguments yesterday in the case of Law v. Siegel (In re Law), No. 12-5196. That case involves the issue of whether a bankruptcy court has the power under section 105(a) to impose a special surcharge by taking the debtor’s homestead exemption due to debtor misconduct.
NCBRC filed an amicus brief on behalf of the NACBA membership arguing that while section 105(a) grants equitable power to the court to effectuate the terms of the Bankruptcy Code, it does not permit the court to contravene other sections of the Code or bypass its otherwise applicable provisions. In sections 522(c) and (k) Congress specified that exempt property cannot be used to pay pre-petition debts or administrative expenses. In addition, in sections 522(o) and (q), Congress specified conditions under which a homestead exemption may be compromised as a result of debtor’s misconduct. Section 105(a) permits a court to use its equitable power to “carry out the provisions” of the Code, not to override or contradict them.
The transcript of the argument can be found here. Law v Siegel transcript
Tax Purchaser Claim May Be Modified in Chapter 13
In a chapter 13 bankruptcy filed prior to the expiration of the redemption period, a real property tax purchaser’s claim is treated as a secured claim which may be modified in the plan. Alexandrov v. LaMont (In re LaMont), No. 13-1187 (7th Cir. Jan. 7, 2014). [Read more…] about Tax Purchaser Claim May Be Modified in Chapter 13
Current Possession of Bank Funds Not Necessary for Turnover
In an unfortunate decision, the Ninth Circuit held that current possession is not necessary to turnover of funds in a checking account. Shapiro v. Henson (In re Henson), No. 11-16019 (9th Cir. Jan. 9, 2014). [Read more…] about Current Possession of Bank Funds Not Necessary for Turnover
Debtor Need Not Commit All PDI in 100% Plan
It was not enough that the chapter 13 debtors committed to paying off their unsecured debts in their entirety, the trustee demanded that they comply with the disposable income test of section 1325(b)(1)(B). In re Bailey, No. 13-60782 (Bankr. E.D. Ky. Nov. 21, 2013). [Read more…] about Debtor Need Not Commit All PDI in 100% Plan
Exemption Allowed Where No Intent to Defraud
Actual intent to hinder, delay, or defraud a creditor is a required element for a reduction of homestead exemption under section 522(o). In re Halinga, No. 13-925 (Bankr. Idaho Nov. 27, 2013). [Read more…] about Exemption Allowed Where No Intent to Defraud
Bankruptcy Cannot Be Reopened to Permit Reaffirmation Agreement
Some banks are refusing to enter into post-discharge mortgage modification agreements when debtors have not reaffirmed the debt in bankruptcy. In In re Conner, No. 09-42532 (Bankr. S.D. Ga. Oct. 25, 2013), the debtor moved to reopen his chapter 7 bankruptcy in order to reaffirm his mortgage and clear the way to enter into a mortgage modification agreement with Wells Fargo. [Read more…] about Bankruptcy Cannot Be Reopened to Permit Reaffirmation Agreement
Charitable Contribution in Excess of 15% Avoidable in its Entirety
In a sharply circumscribed opinion, the Tenth Circuit found that the trustee could avoid in their entirety charitable contributions over 15% of the debtors’ gross annual income. Wadsworth v. The Word of Life Christian Center (In re McGough), No. 12-1142 (Dec. 16, 2013). [Read more…] about Charitable Contribution in Excess of 15% Avoidable in its Entirety
Debtor Not Responsible for Lender’s Rule 3002.1 Legal Fees
A bankruptcy court in Texas ruled that the legal fees incurred by a mortgage company in filing a Notice of Fees, Expenses, and Charges, could not be passed along to the debtor. In re Roife, No. 10-34070 (Bankr. S.D. Tex. Nov. 26, 2013). [Read more…] about Debtor Not Responsible for Lender’s Rule 3002.1 Legal Fees