The Bankruptcy Law Firm, Prof. Corp.
In re McIntosh, ___BR___ (Bankruptcy Court, SD Fla 01/12/24: Bankruptcy Court ordered Debt Purchaser to pay Debtor $65,000 (including $21,500 punitive damages, plus $10,000 emotional distress damages) for violating debtor’s bankruptcy Discharge, by debt purchaser trying to collect a debt from debtor, that had been discharged in debtor’s bankruptcy
Bankruptcy Judge Scott M. Grossman of Fort Lauderdale, Fla., explained why “merely selling a debt to another holder” does not “somehow immunize a creditor and create a fair ground of doubt as to whether that debt was discharged.” Taggart decision doesn’t give more protection to a purchaser of debt than it does to the original creditor, Judge Scott Grossman says. Finding that the conduct of the purchaser of discharged debt was “reckless, reprehensible, and egregious,” Judge Grossman awarded the debtor almost $65,000, including $10,000 for emotional distress and some $21,500 in punitive damages. The Chapter 7 Discharge in 2002 The…
“National Guard and Reservists Debt Relief Extension Act of 2023” Signed into Law
The “National Guard and Reservists Debt Relief Extension Act of 2023” (H.R. 3315) was signed into law yesterday by President Biden after passing the Senate on Monday and the House of Representatives on Dec. 11.
Supreme Court Seems Dubious About Purdue’s Nonconsensual, Nondebtor Releases
At oral argument, by the US Supreme Court, on 12/4/23, of the Harrington v. Purdue Pharma LP appeal, which is an appeal about whether nonconsensual, releases of non-debtors, are allowed to be contained in a Chapter 11 plan, the Supreme Court justices seemed skeptical. The justices were focused on whether the word “appropriate” in Section 1123(b)(6) allows chapter 11 plans to include nonconsensual, nondebtor third-party releases. The justices were not unreceptive to the argument that creditors with claims related to opioid addiction may receive nothing if the Court reverses the Second Circuit and sets aside confirmation of Purdue’s chapter 11…
Amendments to Federal Bankruptcy Rules and Forms Effective 12/1/22
The following amended and new Bankruptcy Rules and Forms became effective on 12/1/22, in bankruptcy cases, motions, and adversary proceedings, nationwide: Bankruptcy Rules 1007, 1020, 2009, 2012, 2015, 3002, 3010, 3011, 3014, 3016, 3017.1, 3018, 3019, 5005, 7004 and 8023; new Rule 3017.2; and Official Forms 101, 309E1 and 309E2. The Judicial Conference of the United States on Sept. 28, 2021, approved the proposed amendments to the Federal Rules of Bankruptcy Procedure Bankruptcy Rules and official Bankruptcy Forms. The proposed amendments were transmitted to the Supreme Court on October 18, 2021. The Supreme Court adopted these proposed amendments and transmitted…
ABI Releases Preliminary Report Recommending Congress Maintain the $7.5 Million Debt Eligibility Limit for Small Businesses Looking to Reorganize Under Subchapter V
The American Bankruptcy Institute (ABI) Subchapter V Task Force today released its “Preliminary Report of ABI’s Subchapter V Task Force on Maintaining the $7,500,000 Debt Cap for Subchapter V Eligibility” with findings to support permanently maintaining the eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V.
Courts Are Split on Counting Future Rent Toward the $7.5 Million Debt Cap in Sub V Chapter 11
If future liability on unexpired leases and executory contracts is counted, many companies will be ineligible for Subchapter V of chapter 11. Courts disagree on whether future liability on a lease counts toward the $7.5 million eligibility limit for Subchapter V. See In re Zhang Medical PC, 23-10678 (Bankr. S.D.N.Y. Nov. 30, 2023) Not counting future rent liability, Bankruptcy Judge Philip Bentley of New York disagreed with Bankruptcy Judge Klinette H. Kindred of Alexandria, Va., who knocked a debtor out of Subchapter V solely as a result of liability on a long-term lease. See In re Macedon Consulting Inc., 652…
It Is Very Difficult to Discharge Student Loans In Bankruptcy
Credit & Collection e-newsletter reports that on 11/16/22, the Biden administration on Thursday unveiled unprecedented policy changes designed to make it easier for federal student loan borrowers to discharge their student debt in bankruptcy. Here are the details, as reported in the Article: It Is Very Difficult to Discharge Student Loans In Bankruptcy While it is by no means impossible for borrowers to discharge their student loans in bankruptcy, it can be quite difficult. Student loans are treated differently in bankruptcy from other consumer debts, like medical bills and credit card debts. Under the bankruptcy code, student loan borrowers generally…
Barclay vs. Boskoski, ___F.4th___, 2022 WL 16911862 (9th Circuit Court of Appeals. November 14, 2022)
In Barclay, a published decision, the United States Court of Appeals for the Ninth Circuit found that the bankruptcy court correctly applied the $600,000 homestead exemption in effect on the filing date of the bankruptcy petition, rather than the significantly lower homestead exemption available when the judgment lien was recorded seven years prior. As a result, the judgment lien was avoided in its entirety. FACTS In 2014, Greek Village, LLC, Konstantinos Manassakis, and Aimilia Manassakis recorded a $256,075.95 judgment lien (“Greek Village Judgment Lien”) against Debtor Dejan Boskoski’s Carlsbad, California home. Because the debtor was married in 2014, the maximum…
US Supreme Court on 10/3/23 heard argument regarding whether the way the federal Consumer Financial Protection Bureau (“CFPB”) is funded is unconstitutional
Credit & Collection e-newsletter of 10/3/23 reports: The fate of the CFPB, and other agencies that are similarly funded, is now “under submission” to the U.S. Supreme Court. If you have a mortgage or a loan or a credit card, you likely have more protection from deceptive practices in the financial services industry today than you did at the time of the 2008 financial crash. Now, however, those protections could be in doubt. On Tuesday, the U.S. Supreme Court hears arguments in a major case that could threaten the very existence of the Consumer Financial Protection Bureau and potentially numerous…
American Bankruptcy Institute (“ABI”) 9/28/23 Article reports that in some SubV Chapter 11 cases, the SubV Trustees are NOT getting their fees paid
A relatively new bankruptcy law, frequently used by mom-and-pop businesses during the pandemic, has largely been considered a success—but not always for some of the lawyers supervising these job-saving cases. Los Angeles bankruptcy lawyer Susan Seflin has served as trustee in more than 40 reorganization cases filed under subchapter V, otherwise known as the Small Business Reorganization Act, since it took effect. Seflin said at a recent American Bankruptcy Institute, or ABI, discussion that, in roughly a quarter of those bankruptcies, “I haven’t gotten paid and I don’t think I will get paid.” “That’s a pretty big loss,” she said,…