News
Bankruptcy Venue Reform Act
The American Bankruptcy Institute 11/10/21 e-newsletter reports that: A Bipartisan Coalition of Attorneys General Support the US Congress passing, and President Biden signing into law, the Bankruptcy Venue Reform Act The National Association of Attorneys General (NAAG) sent a letter yesterday to Congress signed by 43 attorneys general in support of the Bankruptcy Venue Reform Act of 2021. Venue reform has long been needed, to require corporations, LLCs and partnerships to file bankruptcy in the State which is the principal place of business of the corporation, LLC or partnership, instead of having the option of filing bankruptcy in the State…
Mass Evictions Didn’t Result After U.S. Ban Ended, Despite Fears
When the federal moratorium on evictions ended in August, many feared that hundreds of thousands of tenants would soon be out on the streets. More than six weeks later, that hasn’t happened, the Wall Street Journal reported. Instead, a more modest uptick in evictions reflects how renter protections at the city and state levels still remain in parts of the country, housing attorneys and advocates said. Landlords, meanwhile, say the risk of an eviction epidemic was always overstated and that most building owners have been willing to work with cash-strapped tenants. Both groups also think that federal rental assistance, slow…
Debt Collection Licensing Act
The New California Debt Collection Licensing Act (“DCLA”) may require some lawyers to get licensed as debt collectors: California had been one of 16 states that did not require licensing of debt collectors. That changed last year with the enactment of the Debt Collection Licensing Act (“DCLA”). 2020 Cal. Stats. ch. 163 (SB 908). The DCLA will go into effect at the beginning of next year and provides for the licensing and regulation of debt collectors. As defined by the DCLA, a debt collector is “any person who, in the ordinary course of business, regularly, on behalf of that person…
One-Third Of American Families Weren’t Prepared For Financial Emergencies, Even Before The Pandemic
There’s a reason we’re supposed to load our savings accounts with cash for a rainy day. You never know when a catastrophic financial event might occur. And without money in the bank, you could wind up in a dire situation that sends you into debt or even bankruptcy. Now, when we think about financial catastrophes, it’s easy to point to the coronavirus outbreak as a recent example. The pandemic has been a major health crisis that many are still grappling with. But it also upended a lot of people’s finances. And unfortunately, a large number of Americans weren’t prepared to…
Update on Trying to Discharge Student Loan Debt
American Bankruptcy Institute 9/10/21 Update on Trying to Discharge Student Loan Debt: In July 2021, the Second Circuit issued an opinion favoring the dischargeability of certain private student loans in what appears to be a growing circuit trend. This trend correlates with the call for student loan reform, which has been at the forefront of the news in recent months. In Homaidan v. Sallie Mae Inc., the Second Circuit affirmed the bankruptcy court’s denial of lender Navient’s motion to dismiss on the basis that 11 U.S.C. § 523(a)(8)(A)(ii) does not except private student loans from discharge. [1] Debtor Homaidan filed…
American Bankruptcy Institute Reports that 44 Percent of U.S. Small Businesses Have Less than 3 Months’ Worth of Cash
[ABI e-newsletter of 9/9/21] More than 18 months into the pandemic, bakery owner Letha Pugh is so low on cash that she’s afraid to spend it on anything other than paying her employees. She’s hardly alone: 44% of U.S. small businesses have less than three months of cash reserves, leaving them vulnerable to another shutdown due to COVID-19 or other financial emergencies, according to a Goldman Sachs survey of more than 1,100 small businesses, CBSNews.com reported. An even greater share — 51% — of Black-owned small businesses have less than three months’ cash on hand, according to the same survey.…
Federal Jobless Aid, a Lifeline to Millions, Reaches an End on 9/4/21
Unemployment benefits have helped stave off financial ruin for millions of laid-off workers over the last year and a half. After this week, that lifeline will snap: An estimated 7.5 million people will lose their benefits when federally funded emergency unemployment programs end, the New York Times reported. Millions more will see their checks cut by $300 a week. The cutoff is the latest and arguably the largest of the benefit “cliffs” that jobless workers have faced during the pandemic. Last summer, the government ended a $600 weekly supplement that workers received early in the crisis, but other programs remained…
Bankruptcy Code 11 USC 523(a)(3)(A)
There is a split in case law, on how courts read Bankruptcy Code 11 USC 523(a)(3)(A) (which is about nondischargeability of late filed claims, where creditor did not have knowledge or notice of existence of bankruptcy case in time to file a proof of claim before the deadline set by the Bankruptcy Court for filing proofs of claim), should be read in conjunction with 11 USC 726(a)(2)(C) (which is about paying late filed claims under some circumstances). A Bankruptcy Court decision from Florida, Creative Enterprises HK Ltd. v. Simmons (In re Simmons), ___BR___20-0081 (Bankr. M.D. Fla. Aug. 24, 2021). discusses…
The Family Farmer or Family Fisherman Chapter of the Bankruptcy Code
Chapter 12—the Family Farmer or Family Fisherman Chapter of the Bankruptcy Code (11 USC 1201 to 1232)–was added to the Bankruptcy Code in 1986 in response to the farm crisis of the 1980s. Chapter 12 became a permanent part of the Code in 2005. For many reasons, farmers have continued to struggle in the intervening years, causing this chapter to be more relevant than ever. In 2016, farm real estate debt surpassed the 1981 peak. In 2019, commodity prices were 50 percent lower than their peak in 2012, and the weather in 2019 — including massive Midwest floods — prevented…
Four Presidents of the United States Filed for Bankruptcy
Did You Know? Four Presidents of the United States filed for Bankruptcy: Thomas Jefferson, Abraham Lincoln, Ulysses S. Grant and William McKinley [as reported by Credit & Collection e-newsletter of 8/23/21].