The Ninth Circuit has cracked open a door that Sternberg seemed to have slammed shut by holding that a debtor is not precluded from recovering, as damages, attorneys’ fees for defending against a creditor’s appeal of a finding that the creditor violated the automatic stay. America’s Servicing Co. v. Schwartz-Tallard, No. 12-60052 (9th Cir. Apr. 16, 2014). [Read more…] about Ninth Circuit Permits Award of Appeal Fees
Denial of Confirmation of Fee-Only Plan
The Eleventh Circuit upheld the lower court’s denial of confirmation in the debtor’s fee-only chapter 13 plan finding that it did not satisfy the good faith requirements of section 1325(a)(3) and (7). Brown v. Gore (In re Brown), No. 13-10260 (11th Cir. Feb. 14, 2014). [Read more…] about Denial of Confirmation of Fee-Only Plan
Court Rejects Proposed Order for Payment of Attorney Fees in Event of Dismissal
Language in a proposed order for attorney fees that, in the event of dismissal or conversion, the fees were to be paid out of undistributed funds held by the trustee was rejected by the bankruptcy court as unsupported by the Code. In re Weatherspoon, No. 11-46755 (Bankr. W.D. Wash. Jan. 3, 2014). [Read more…] about Court Rejects Proposed Order for Payment of Attorney Fees in Event of Dismissal
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
Attorney Fees for Litigating Damage Actions Based On Stay Violation
The Ninth Circuit decision in Sternberg v. Johnston, reared its ugly head to limit recovery of attorney fees in a stay violation action in the recent case of Check Into Cash v. Snowden (In re Snowden), No. 12-1095 (W.D. Wash. March 11, 2013). Snowden came to the district court on appeal and cross-appeal of the Bankruptcy Court’s award of damages for emotional distress and punitive damages resulting from Check Into Cash (CIC)’s violation of the automatic stay.
After affirming both the emotional distress and punitive damage awards the court rejected the debtor’s invitation to revisit its earlier decision in a previous appeal that the award of attorney fees was properly limited, under Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), cert. denied, 131 S. Ct. 102 (2010), to those fees pre-dating the adversary proceeding. [Read more…] about Attorney Fees for Litigating Damage Actions Based On Stay Violation
Lack of Notice Constitutes Waiver of Wells Fargo’s Claim
Declining to “dim the light that shines at the end of the long 60-month tunnel for compliant debtors,” the Bankruptcy Court for the Southern District of Texas held that Wells Fargo waived its right to collect post-petition shortfalls in escrow payments due to its failure to comply with notice requirements. In re Garza, No. 08-60088 (Bankr. S.D. Tex. Oct. 1, 2012). [Read more…] about Lack of Notice Constitutes Waiver of Wells Fargo’s Claim
Fifth Circuit Approves “Fee-Only” Chapter 13 Plan
In good news for bankruptcy debtors who cannot afford to file chapter 7 or for whom chapter 7 is otherwise impracticable, the Fifth Circuit affirmed the bankruptcy court’s confirmation of the debtor’s “fee-only” chapter 13 plan finding that such plan are not per se bad faith. Sikes v. Crager (In re Crager), No. 11-30982 (5th Cir. August 16, 2012), rev’g, W.D. La. 10-1863 (Sept. 30, 2011). [Read more…] about Fifth Circuit Approves “Fee-Only” Chapter 13 Plan
Puerto Rican Law Justifies Reduction of Attorney Fee Penalty
The Bankruptcy Appellate Panel for the First Circuit affirmed the bankruptcy court’s reduction of the mortgage creditor’s attorney fee “penalty” against the debtor where the penalty, ten percent of the original loan, was provided for in the mortgage document. RNPM, LLC v. Alvarez, No. 11-80 (B.A.P. 1st Cir. June 28, 2012). [Read more…] about Puerto Rican Law Justifies Reduction of Attorney Fee Penalty
Ninth Circuit BAP Permits Appellate Attorney Fee Award for Stay Violation
When a debtor is forced to defend both the ruling that the creditor violated the automatic stay and the award of sanctions for that violation, the debtor may recover her appellate attorney fees under section 362(k). Schwartz-Tallard v. America’s Servicing Co., No. 11-1429 (B.A.P. 9th Cir. June 28, 2012). [Read more…] about Ninth Circuit BAP Permits Appellate Attorney Fee Award for Stay Violation
Fee-Only Plans Not Per Se Bad Faith
Making specific reference to NACBA’s “helpful” amicus brief, the First Circuit Court of Appeals found that fee-only chapter 13 plans are not per se bad faith under section 1325(a)(3). In re Puffer, No. 11-1831 (1st Cir. March 22, 2012). Debtor’s chapter 13 plan proposed to pay $2,900 to his counsel, $300 to general unsecured creditors and $400 as trustee fees. The bankruptcy court declined to confirm the plan on the basis that it was per se bad faith to file a plan in which debtor’s bankruptcy counsel was essentially the only beneficiary. In reversing, the first circuit borrowed the totality of the circumstances analysis from section 706(a), placing the burden on the debtor to establish that the facts are such that the chapter 13 plan is in good faith. The decision will make bankruptcy relief more available to debtors who otherwise could not find competent counsel and for whom proceeding pro se is a poor alternative. [Read more…] about Fee-Only Plans Not Per Se Bad Faith