This case centered on whether rent collected by the debtors becomes part of the bankruptcy estate even though the right to collect the rents had been absolutely assigned to their lender PHH Mortgage (“PHH” or “assignee”). Relying on In re Jason Realty, 59 F.3d 423 (3d Cir. 1995), the bankruptcy court found that PHH, as assignee, was the owner of the right to collect rents and, therefore, the debtor had no ownership interest to augment the bankruptcy estate. The district court affirmed. In re Cordova, No. 13-810 (D. N.J. Oct. 22, 2013). [Read more…] about Absolute Assignment of Rents Precludes Turnover
Trustee’s Abandonment of Property Does Not End Court’s Jurisdiction
The BAP for the First Circuit determined that the bankruptcy court erred when it found that it lacked jurisdiction over a motion to avoid a lien under section 522(f). In re Rosado-Ramos, No. 13-5 (Oct. 22, 2013). [Read more…] about Trustee’s Abandonment of Property Does Not End Court’s Jurisdiction
Inheritance Received more than 180 Days Post-Petition Part of Chapter 13 Estate
The Fourth Circuit found that an inheritance acquired after section 541(a)(5)’s 180 day look-back period but prior to termination of the chapter 13 case, becomes part of the bankruptcy estate under section 1306(a)(1). Carroll v. Logan (In re Carroll), No. 13-1024 (Oct. 28, 2013). [Read more…] about Inheritance Received more than 180 Days Post-Petition Part of Chapter 13 Estate
No Bad Faith in Failure to Modify
It is not bad faith for a debtor to fail to move to modify her chapter 13 plan to take into account post-confirmation increased equity in her residential property. In re Garajau, 10-18478 (Bankr. D. Mass. Sept. 30, 2013). [Read more…] about No Bad Faith in Failure to Modify
Judge Johnson’s Dismissal of Chapter 13 Reversed by District Court
The mean-spirited, and legally insupportable approach to chapter 13 cases that led to denial of confirmation and dismissal of the debtor’s case in In re Mycek, has been reversed and remanded by the district court for the Central District of California. No. 12-369 (C.D. Cal. Oct. 22, 2013). [Read more…] about Judge Johnson’s Dismissal of Chapter 13 Reversed by District Court
State Exemption Limited to Amount of Equity
The BAP for the Eighth Circuit found that, under the relevant Iowa exemption statute, the debtor could not exempt a vehicle in which she had no equity. In re Goben, No. 13-6039 (Sept. 23, 2013). [Read more…] about State Exemption Limited to Amount of Equity
CFPB Circumvents Rulemaking Process to Create A Bankruptcy Exemption in Servicing Rules
Without advance notice and with no opportunity to comment, the CFPB yesterday issued an interim final rule concerning the mortgage servicing regulations that take effect January 2014. The new rule now exempts servicers from the periodic statement requirement when the borrower is a debtor in bankruptcy. The CFPB states that the interim final rule “clarifies” its previous final rule on mortgage servicing, but the bankruptcy exemption is not a “clarification” of the previously issued rule. Rather, the new exemption marks a 180-degree reversal from its previous position. Previously, and rightly so, the CFPB found that the complexities of the bankruptcy scenario necessitated periodic statements for debtors. The rule allowed servicers to make changes in statements to reflect accurate payment obligations of the debtor, but put an end to servicers’ practice of stopping monthly statements to borrowers who filed for bankruptcy. Without statements, it is more difficult for homeowners to remain current on their mortgages post-petition. In developing the original rule the CFPB carefully considered input from various stakeholders and rejected a bankruptcy exemption for periodic statements. Since the CFPB sidestepped the notice and comment procedure in its recent about face on periodic statements and bankruptcy, it can only be presumed that the CFPB relied upon less public input in reversing its previous “carefully considered” decision. Shame on the CFPB!
60-Day Rollover Does Not Disqualify IRA Funds from Exemption
The Fourth Circuit is poised to review the bankruptcy court’s decision that a debtor may rely on the 60-day rollover rule to withdraw funds from his IRA, use them for living expenses, and redeposit them within 60 days without their losing their exempt status in bankruptcy. In re Rudd, 2013 WL 2684541 (Bankr. E.D. N.C., June 12, 2013). [Read more…] about 60-Day Rollover Does Not Disqualify IRA Funds from Exemption
State Exception to Homestead Exemption Pre-empted
The Bankruptcy Appellate Panel for the Eighth Circuit found that a Missouri exception to its homestead exemption was preempted by section 522(c) of the federal exemption scheme. In re Moore, 495 B.R. 1 (B.A.P. 8th Cir. July 8, 2013). [Read more…] about State Exception to Homestead Exemption Pre-empted
FDCPA and Bankruptcy Law Not Necessarily Mutually Exclusive
The Third Circuit found that a debtor may maintain an action under the FDCPA even though the conduct giving rise to the claim is also addressed by bankruptcy rules. Simon v. FIA Card Services (In re Simon), No. 12-3393 (3d Cir. Oct. 7, 2013). [Read more…] about FDCPA and Bankruptcy Law Not Necessarily Mutually Exclusive