The Bankruptcy Law Firm, Prof. Corp.
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,…
In re Trinity Legacy Consortium LLC,___BR___ (Bankr. D.N.M. Sept. 25, 2023), case # 22-10973
The Standard for Enlarging the Time to File a Subchapter V Plan Judge Jacobvitz of New Mexico follows Judge Harner of Maryland in developing a standard for deciding whether a Subchapter V debtor may extend the time for filing a plan. In the form of an opinion, Bankruptcy Judge Robert H. Jacobvitz of Albuquerque, N.M., wrote a treatise identifying the best definition of Section 1189(b), which requires a debtor in Subchapter V of chapter 11 to file a plan within 90 days of filing, but allows the court to “extend the period if the need for the extension is attributable…
In re Boteilho Hawaii Enterprises, Inc., ___BR___ (Bankr. D. Hawaii 10/24/23): Bankruptcy Judge decision explains why a hypothetical chapter 7 sale isn’t necessarily ‘FMV’
A chapter 7 trustee’s obligation to sell can mean that chapter 7 prices don’t fit the ordinary definition of fair market value. An opinion by Bankruptcy Judge Robert J. Faris explains why the valuation of a debtor’s assets in a chapter 11 cramdown can be lower than “fair market value” in an ordinary appraisal, because a hypothetical chapter 7 trustee is typically compelled to sell expeditiously without the luxury of operating the business. Sitting in Honolulu, Judge Faris composed a template for someone writing a cramdown opinion where the focus is valuation. Judge Faris also sits on the Ninth Circuit…
In re Litton,___BR___ 23-10189 (Bankr. W.D. La. Sept. 18, 2023)
In re Litton,___BR___ 23-10189 (Bankr. W.D. La. Sept. 18, 2023): holds nonpurchase money debt service on a car is NOT a deductible ‘ownership of vehicle’ cost in ‘13’, which debtor can deduct in determining debtor’s monthly disposable income which debtor must generally pay into chapter 13 plan, each month, to fund chapter 13 plan Courts aren’t fully in agreement, but most hold that non-purchase money debt service on a car isn’t an ‘ownership cost’ deducted from current monthly income to arrive at disposable income in chapter 13. On a question where the courts are divided, Bankruptcy Judge John S. Hodge…
Auto Loans Pass Student Loans in Consumer Debt Load, Fed Data Shows
Auto loans have moved past student loans this year as the second-largest debt burden for consumers, at $1.582 trillion compared with $1.569 trillion for student loans, according to Federal Reserve Bank of New York data, WSJ Pro Bankruptcy reported. At $12 trillion, mortgages are the largest debt for consumers. Consumers had owed more in student loans than auto loans since early 2010, when a surge of college students, some of whom lost jobs in the financial crisis and sought education and new training, led to big student loan borrowing. But the U.S. government froze payments and interest on federal student…
Americans’ Credit Card Balances Hit New Peak
Credit & Collection e-newsletter of 8/28/23 reports that Americans’ credit card balances rose briskly in the second quarter of 2023, hitting a sobering milestone of more than $1 trillion, the Federal Reserve Bank of New York reported this month. Credit cards are the most prevalent type of household debt, New York Fed researchers wrote in a blog post, and saw the biggest increase of all debt types. More than two-thirds of Americans had a credit card in the second quarter, up from 59% roughly a decade earlier, the researchers found. And, they noted, card balances were more than 16% higher…
In re Elassal, ___BR___, 2023 WL 5537061 (Bankr. E.D. Mich. Aug. 28, 2023)
This new bankruptcy court decision notes that cases use 5 different procedures (with differing outcomes) regarding who gets to keep the money (above money to pay of liens on house) when a chapter 13 debtor sells the debtor’s house, in chapter 13, after the bankruptcy court has confirmed (approved) debtor’s chapter 13 plan, and the confirmed chapter 13 plan provides debtor keeps the house. When, post-confirmation, a chapter 13 debtor sells his or her home, who gets the benefit of the appreciation: the debtor, or his or her creditors? Judge Randon in Michigan adopted the so-called “estate replenishment approach” and…
Credit Card And Car Loan Delinquencies Surpass Pre-Pandemic Levels
Credit & Collection e-newsletter of 8/15/23 reports that Credit Card And Car Loan Delinquencies Surpass Pre-Pandemic Levels More Americans are falling behind on their credit card payments. Driving the news: The rate of new credit card delinquencies has surpassed its pre-COVID level, clocking in at 7.2% in the second quarter, per a report out this month from the New York Fed. Auto loan delinquencies were at 7.3% in Q2, also higher than pre-pandemic levels. Meanwhile, mortgage delinquencies remain very low. Why it matters: Even as inflation declines, Americans are increasingly relying on credit cards to make their budgets work —…