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…] about NACBA Weighs in on Sternberg Issue
Creditor’s Failure to Comply with Rule 3002.1(g) Is Basis for Violation of State Consumer Law
The district court denied PNC’s motion to dismiss the borrowers’ complaint for violations of California consumer protection laws and common law claims based on PNC’s foreclosure action after the plaintiffs completed their Chapter 13 plan. Sokoloski v. PNC Mortgage, No. 14-1374, 2014 WL 6473810 (E.D. Cal. Nov. 18, 2014). [Read more…] about Creditor’s Failure to Comply with Rule 3002.1(g) Is Basis for Violation of State Consumer Law
TILA Rescission Effective upon Notification
In a unanimous decision delivered by Justice Scalia, the Supreme Court held that so long as the borrower notifies the lender within three years of the transaction, his rescission is timely. Jesinoski v. Countrywide Homes, 574 U. S. ____ (2015), No. 13-684 (Jan. 13). [Read more…] about TILA Rescission Effective upon Notification
It’s Alive! – McCoy Adopted by Tenth Circuit
The Tenth Circuit has concluded that late-filed tax returns are not “returns” for dischargeability purposes unless filed by the IRS in cooperation with the debtor. Mallo v. IRS (In re Mallo), __ F.3d __, 2014 WL 7360130 (Dec. 29, 2014) (consolidated with In re Martin, 14-1488). [Read more…] about It’s Alive! – McCoy Adopted by Tenth Circuit
Sixth Circuit Reverses Denial of Amendment to Exemptions
The Sixth Circuit found that prejudice to creditors was unlikely to be a legitimate basis for denying a debtor’s motion to amend her schedules to increase her exemption claim and that even if it were a legitimate basis, the trustee failed to show the existence of such prejudice. Westry v. Lim (In re Westry), No. 14-1440 (6th Cir. Dec. 30, 2014). [Read more…] about Sixth Circuit Reverses Denial of Amendment to Exemptions
Bankruptcy Reopened to Add Insurance Proceeds to Estate
The bankruptcy court properly reopened the debtor’s Chapter 7 case to permit the trustee to administer insurance proceeds where the debtor’s interest in the funds pre-dated his bankruptcy even though he did not acquire the funds until post-discharge. Wojcik v. Gold (In re Daher), No. 14-8028 (B.A.P. 6th Cir. Dec. 4, 2014). [Read more…] about Bankruptcy Reopened to Add Insurance Proceeds to Estate
National Bankruptcy Conference Chimes in on Wellness and the Constitutional Validity of Consent
In Wellness International Network Ltd. V. Sharif, a creditor (WIN) sought a finding that a state court judgment against the debtor was non-dischargeable in the debtor’s Chapter 7 bankruptcy and that a trust for which the debtor was the trustee was, in fact, an alter ego of the debtor and therefore liable for his debts. In the bankruptcy court, the debtor failed to respond to discovery requests and court orders, and, as a result, the court ordered default judgment to WIN. The debtor appealed to the district court of Illinois and during the pendency of that appeal, the Supreme Court decided Stern v. Marshall. The district court dismissed the debtor’s Stern objection as untimely. At the Seventh Circuit, the court found that the dischargeability of the debt was a core matter properly decided by the bankruptcy court. The court remanded the alter ego issue to the district court for a determination of whether it was core or noncore and concluded that, if it was core, the bankruptcy court lacked constitutional authority to decide it and the parties could not waive objection to the lack of authority. Wellness International Network Ltd. v. Sharif, 727 F.3d 751, 774 (7th Cir. 2013), cert. Granted, 134 S. Ct. 2901 (July 1, 2014) (No. 13-935). [Read more…] about National Bankruptcy Conference Chimes in on Wellness and the Constitutional Validity of Consent
Homestead Exemption May Not Be Denied Based on Bad Faith, but . . .
Absent a statutory basis for doing so, a bankruptcy court may not deny a debtor’s homestead exemption based on bad faith or prejudice to creditors. Elliott v. Weil (In re Elliott), No. 14-1050, 14-1059 (consolidated) (B.A.P. 9th Cir. Dec. 10, 2014). [Read more…] about Homestead Exemption May Not Be Denied Based on Bad Faith, but . . .
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 in excess of 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