Post-confirmation wages that are undisbursed upon dismissal of the debtor’s chapter 13 case must be returned to the debtor without distribution to the debtor’s attorney, the trustee, or creditors. In re Edwards, 2015 Bankr. LEXIS 3195, No. 13-30230 (Bankr. S.D. Ill. September 22, 2015). Read More
Tag Archive: Attorney Fees
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Undisbursed Funds Go To Debtor upon Dismissal
Posted by NCBRC - October 20th, 2015
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Ninth Circuit Overturns Sternberg
Posted by NCBRC - October 15th, 2015
The Ninth Circuit Court of Appeals issued an en banc decision “that 11 U.S.C. § 362(k) authorizes an award of attorney’s fees reasonably incurred in a debtor’s prosecution of a suit for damages to provide redress for a violation of the automatic bankruptcy stay.” America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), ___ F.3d. ___, No. 12-60052 (Oct. 14, 2015). In so holding, the court overruled Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), which held that section 362(k) “allowed a debtor to recover only those fees incurred to end the stay violation itself, not the fees incurred to prosecute a damages action.” Read More
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Devious Device Disables Debtors’ Car
Posted by NCBRC - September 28th, 2015
Use of a device that renders a vehicle inoperable in the event of failure to make a payment on the car loan violates the automatic stay. In re Horace, No. 14-30103 (Bankr. N.D. Ohio Aug. 28, 2015). Read More
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Harris Does Not Preclude Attorney Fees Upon Pre-Confirmation Conversion
Posted by NCBRC - September 18th, 2015
A bankruptcy court for the District of Maryland held that the chapter 13 trustee could use funds that were undisbursed at the time of conversion to pay accrued fees owed by the debtors to their bankruptcy attorneys. In re Everest, No. 14-29084 (Sept. 10, 2015) consolidated with In re Brandon, No. 14-23735 (lead case), In re Rucker, No. 14-27630, and In re Burrows, No. 14-28940. Read More
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Harris Precludes Attorney Fee Payments Out of Undisbursed Funds
Posted by NCBRC - August 25th, 2015
In two cases involving the courts’ practice of permitting the chapter 13 trustee to distribute undisbursed funds to creditors upon conversion to chapter 7, the courts found that Harris v. Viegelahn, 575 U.S. ___, 135 S.Ct. 1829 (2015), dictated a different result, even with respect to the debtor’s chapter 13 attorney fees and without regard to whether the case was converted prior to confirmation of the plan. In re Beauregard, No. 11-13069, consolidated with, In re Rule-Osburn, No. 14-13624, In re Montano, No. 14-12950 (Bankr. N. M. July 10, 2015); In re Sowell, No. 14-44130 (Bankr. D. Minn. Aug. 7, 2015). Read More
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Chapter 7 Trustee Fee Application Denied
Posted by NCBRC - August 11th, 2015
Where the chapter 7 trustee did not make distributions or turn over any money to parties in interest he cannot recover fees for time spent prior to conversion to chapter 13. In re Mingledorff, No. 12-41543 (Bankr. S.D. Ga. June 23, 2015). Read More
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Sternberg Does Not Preclude Attorney Fee Award
Posted by NCBRC - April 15th, 2015
Where the creditor had not returned garnished funds at the time of the hearing for damages for the stay violation, the debtor was entitled to recovery of attorney fees incurred in connection with that hearing. In re Eeds, No. 14-61005 (Bankr. Mont. March 16, 2015). Read More
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NACBA Weighs in on Sternberg Issue
Posted by NCBRC - January 27th, 2015
The NACBA membership has filed an amicus brief in the Ninth Circuit case of America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), No. 12-60052 (filed Jan. 23, 2015). The brief seeks reconsideration of that court’s 2010 decision in Sternberg v. Johnston, 595 F.3d 937 which limited the right to recover attorney fees to those incurred in the effort to terminate a stay violation, but not to the fees incurred prosecuting section 362(k) damage claims. Read More
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En Banc Rehearing Granted on Sternberg Issue
Posted by NCBRC - December 20th, 2014
The Ninth Circuit Court of Appeals has granted America’s Servicing Company’s petition for rehearing en banc in In re Schwartz-Tallard, No. 12-60052 (Petition granted, Dec. 19, 2014). The case arose out of the debtor’s motion for attorney fees relating to ASC’s appeal of a finding that it had violated the automatic stay. The Ninth Circuit found that the debtor’s attorney fees were actual damages under section 362(k)(1). In re Schwartz-Tallard, 765 F.3d 1096 (9th Cir. August 29, 2014), aff’g, In re Schwartz-Tallard, 473 B.R. 340 (B.A.P. 9th Cir. 2012). The court distinguished Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), which held that a debtor’s attorneys’ fees for work on an adversary proceeding seeking damages for a stay violation were not actual damages and thus were not recoverable under 11 U.S.C. § 362(k)(1). In this case, ASC’s appeal challenged both the fee award and the substantive stay violation ruling, therefore, the debtor’s fees were incurred in defending both the damage award and the finding of stay violation.
Oral argument is scheduled for the week of March 16, 2015, though debtor’s counsel has asked for a new date.
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“Non-Routine” Fees for Objections to Late Claims Allowed
Posted by NCBRC - November 24th, 2014
In two nearly identical cases, the bankruptcy court granted the debtors’ attorney’s supplemental fee motions seeking compensation for work performed opposing proofs of claim for debts that were unenforceable due to the lapse of the state statute of limitations. In re Swilling, No. 13-12583 (Bankr. E.D. Tenn. Oct. 23, 2014), In re Alexander, No. 13-13462 (Bankr. E.D. Tenn. Oct. 22, 2014) (debtor’s attorney filed motions in five other cases based on similar factual scenarios).The court noted, however, that since the 2012 changes to Fed. Bankr. R. 3001(c), objections to those claims would now be deemed “routine.” Read More
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