The Bankruptcy Law Firm, Prof. Corp.
Analysis: Parents Who Borrowed for Children’s College Face Looming Deadline
On 4/9/26, the American Bankruptcy Institutes reports: Time is running out for parents who took out college loans for their children and want to keep affordable repayment and debt-forgiveness options, the New York Times reported. Because of new rules on student loans, parents who borrowed federal parent PLUS loans and want to keep monthly payments low need to apply soon to merge the loans into a new loan — a step known as consolidation. That will keep them eligible for a plan that bases monthly payments on their income, as well as for loan forgiveness programs. While the formal deadline…
Creditors Holding High-Ranking Debt
On 4/9/26, a bankruptcy newsletter reported that creditors holding high-ranking debt issued by companies that emerged from bankruptcy in 2025 faced the worst average recoveries on their investment in the past 10 years, as liability management exercises that supply firms with new financing put increased pressure on lenders, Fitch Ratings has said in a new report.
Ramierz v. River Flow Funding LLC (In re Ramirez)
Ramierz v. River Flow Funding LLC (In re Ramirez), 25-1000 (B.A.P. 9th Cir. March 17, 2026) An order disallowing a claim didn’t mean the lien securing the claim was disallowed; only meant debtor’s in personam liability was discharged. To avoid an inequitable result, the Ninth Circuit Bankruptcy Appellate Panel relied on fundamental principles about secured claims in chapter 7 to conclude that an order declaring a secured claim to have been “disallowed” didn’t really mean it was disallowed. Believing that “the bankruptcy court’s use of the word ‘disallowed’ in the claim disallowance order was unfortunately imprecise,” the BAP interpreted the…
Representatives Reintroduce Bankruptcy Venue Reform Act in US Congress
Reps. Zoe Lofgren (D-Calif.) and Ben Cline (R-Va.) today introduced the “Bankruptcy Venue Reform Act,” bipartisan legislation that requires that chapter 11 proceedings take place where the principal place of business or principal assets of a company are located. The bill has been introduced in both chambers in previous sessions of Congress. “Bankruptcies should be adjudicated locally in a court familiar with all the affected stakeholders, not in some court all the way across the country,” Lofgren said. Cline agreed, adding that “[v]enue shopping erodes trust in the process and shuts out the very people most affected by these decisions.”…
ABI Applauds Renewed Congressional Efforts to Expand Access for More Distressed Small Businesses to Reorganize Under Subchapter V
On 3/26/26 The American Bankruptcy Institute (ABI) and ABI’s Subchapter V Task Force announced its support for bipartisan legislation that would restore and permanently increase the debt eligibility cap for subchapter V small business reorganizations to $7.5 million. The “Bankruptcy Threshold Adjustment Act of 2026” was recently introduced by Senate Pro Tempore and Senate Judiciary Committee Chair Charles Grassley (R-Iowa) and Rep. Ben Cline (R-Va.) in the House of Representatives. In a letter to the sponsors, co-sponsors and members of both the House and Senate Judiciary Committees, ABI and its Subchapter V Task Force emphasized that expanding access to subchapter…
Savage v. Coastal Capital LLC (In re Savage)
Savage v. Coastal Capital LLC (In re Savage), 25-1249 (1st Cir. Feb. 27, 2026) Retired Bankruptcy Judge Bruce Harwood, is affirmed by the First Circuit. To deny an individual’s discharge under Section 727(a)(5) for failure “to explain satisfactorily” a loss of assets, the First Circuit held that the missing assets need not be substantial. Objecting to the debtor’s discharge, a secured creditor established at trial that the debtor had not explained the disappearance of almost $57,000 from a total of about $700,000 that the debtor had received from the corporation he controlled in the year before his chapter 7 filing.…
Farms Facing Bankruptcy
Comment of The Bankruptcy Law Firm, PC, by KPMarch, Esq: Most people in urban areas in California are not aware that there is a huge amount of farming in California. In fact, the US Department of Agriculture reports that the state of California has the highest gross receipts from agriculture of any of the 50 states. As a result, stress on farming can have a big negative effect, not just on California farmers, but on the whole state of California. See the following March 4, 2026 Report of Caroline Weier KAALTV, KSTP KSTP, that between 2024 and 2025, 1,300 farms…
In re Town & Country Event Center LLC, 25-24205 (Bankr. E.D. Cal. Feb. 11, 2026)
In re Town & Country Event Center LLC, 25-24205 (Bankr. E.D. Cal. Feb. 11, 2026): bankruptcy court decision by BkyJudge Christopher Klein in Sacramento. He’s just a bankruptcy judge, but very well thought of. I will cite this case in updates Chapter 8-I or 8-II, and suggest it be cited in updates re sanctions, since Klein uses FRBP Rule 11 to sua sponte sanction a debtors atty whom judge client found knowingly participated in scheme to hinder, delay or defraud creditors. Cites that 11 USC 362(d)(4). 362(d)(4) says ct can grant RFStay if filing petition was part of a scheme…
Trump administration identifies more borrowers eligible for student loan forgiveness, court filing shows
CNBC on 2/17/26 reports that: Key Points The Trump administration identified more than 40,000 borrowers eligible for federal student loan forgiveness in January, according to a recent court filing. Borrowers became eligible for the debt cancellation under the terms of their repayment plan or through Public Service Loan Forgiveness. “We have several clients who got the ‘golden email’ this month,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York. The Trump administration has identified more than 40,000 borrowers eligible for federal student loan forgiveness in January, a recent court filing revealed. More than 10,800…
Herlihy v. DBMP LLC, 24-2109 (4th Cir. Feb. 11, 2026): Over Dissent Again, Fourth Circuit Allows Mass Tort Reorgs Without Financial Distress
Fourth Circuit needs to sit en banc before deciding whether Carolin and Robbins apply when the debtor is not in financial distress. For the fourth time, Circuit Judge Robert Bruce King has filed a vigorous dissent imploring his colleagues on the Fourth Circuit to sit en banc and reconsider whether the circuit’s Carolin and Robbins decisions permit chapter 11 reorganization by solvent debtors able to pay tort claims in full. As he had done twice last year in Bestwall dissents, Judge King said that “our Circuit has become the ‘safe haven’ for ultra-wealthy corporations seeking to evade asbestos-related civil tort…