The Bankruptcy Law Firm, Prof. Corp.
New Form Motion
8/1/21 The Bankruptcy Court, CD CA, has just created a new, easy to use, form motion, for consumer debtors to use to seek an order compelling a creditor which has seized an item of debtor’s property, before debtor files bankruptcy, to immediately return that item of property to debtor, after debtor files bankruptcy. Most often, the seized item is debtor’s car/truck/other vehicle, which the secured lender on the vehicle repossessed prepetition, usually because debtor defaulted in making make monthly vehicle payments the debtor owed the secured lender, to repay the secured car loan. The Central District Consumer Bankruptcy Attorneys Association…
Recommend Improvements to the Consumer Bankruptcy System
The ABI Commission on Consumer Bankruptcy was created in December 2016 to research and recommend improvements to the consumer bankruptcy system that can be implemented within its existing structure. The Commission’s Final Report contains recommendations for amendments to the Bankruptcy Code, and to the Federal Rules of Bankruptcy Procedure, designed to make the consumer bankruptcy system more accessible and efficient for both financially struggling Americans and the professionals who serve them. After soliciting public feedback, Commission members identified nearly 50 discrete issues for study and divided these issues among three advisory committees composed of 52 bankruptcy professionals. The Comissions’ NUMBER…
What Is an “Executory Contract” Pursuant to 11 USC 365
ABI (American Bankruptcy Institute) Article on What is an “Executory Contract” pursuant to 11 USC §365 : The bankruptcy community needs a better definition of what’s an executory contract, and Prof. Jay Westbrook has it. A decision–In re Financial Oversight and Management Board for Puerto Rico, 17- 3283 (D. P.R. June 29, 2021)–by the district court in restructuring Puerto Rico’s debt demonstrates the gyrations a court must sometimes undertake to conclude that a contract is capable of assumption under the “Countryman” definition of an executory contract. Rather than decide whether a contract is executory under the dueling “Countryman” and “functional”…
As Forbearance Protections End, Nonbank Mortgage Lenders Face High-Volume Processing Tests, Ginnie Mae Risks
Tech-savvy millennials fled to the suburbs during the coronavirus pandemic, fueling a hot housing market that enabled nonbank and fintech mortgage companies to grab a big piece of the growing market share, churning out loans at a faster pace than more traditional bank lenders, according to a Morning Consult report. That booming market has so far shielded a vulnerability. Homeowners had multiple options to buoy their finances, from refinancing opportunities to extra unemployment insurance and stimulus checks. As those programs come to a close this year, most homeowners that took advantage of coronavirus-era policies to delay their loans have now…
Moratorium on Residential Evictions
On 6/29/21 the US Supreme Court refused to overturn the CDC’s (federal Center for Disease Control) nationwide moratorium on residential evictions, which continues to be in effect until the end of July 2021. The petitioners were a coalition of landlords and realtors. The vote against the landlords and realtors was 5-4, with Chief Justice John Roberts Jr. and Justice Brett Kavanaugh joining the liberal members of the court to form a majority. The CDC had said that this is the last moratorium on residential evictions that the CDC will order. But that CDC representation is likely NOT enforceable. In their…
In TransUnion LLC v. Ramirez,___US___(June 2021), the US Supreme Court Substantially Restricts Ability To Sue In Federal Court For violations by credit reporting agencies and creditors of various federal statutes protecting consumers, regarding credit reporting (Fair Credit Reporting Act), debt collection (Fair Debt Collection Protection Act), and creditors phoning consumers (Telephone Consumer Protection Act)
On June 25, 2021, the Supreme Court of the United States held that a plaintiff must suffer a concrete injury resulting from a defendant’s statutory violation to have Article III standing to pursue damages from that defendant in federal court. The Court also held that plaintiffs in a class action must prove that every class member has standing for each claim asserted and for each form of relief sought. Justice Kavanaugh wrote the majority opinion, which was joined by Chief Justice Roberts as well as Justices Alito, Gorsuch, and Barrett. Justice Thomas, often considered the Court’s most conservative member, wrote…
CDC Extends Eviction Moratorium a Month, Says It’s Last Time
The Biden administration on Thursday extended the nationwide ban on evictions for a month to help millions of tenants unable to make rent payments during the coronavirus pandemic but said this is expected to be the last time it does so, the Associated Press reported. Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, extended the eviction moratorium from June 30 until July 31. The CDC said that “this is intended to be the final extension of the moratorium.” A Biden administration official said the last month would be used for an “all hands on deck” multi-agency…
EXCLUSIVE U.S. Watchdog to Adopt Mortgage Moratorium Rule with Some Exclusions – Sources
WASHINGTON, June 22 (Reuters) – The federal Consumer Protection Financial Bureau (“CFPB”), which is the U.S. consumer watchdog, will, in coming weeks, adopt a rule requiring mortgage servicers to give struggling homeowners until next year (2022), to resume repayments, but is expected to carve out some groups of borrowers following industry pushback, four people with knowledge of the matter told Reuters. The Consumer Financial Protection Bureau (CFPB) in April proposed, among other measures, a new review process that would generally prohibit mortgage servicers from starting a foreclosure until after Dec. 31, 2021. The rule will throw a lifeline to hundreds…
Child Tax Credit
The California Attorney General Rob Bonta warned today that it is illegal for California creditors, debt collectors, and financial institutions to take Child Tax Credit payments from California families. According to the Attorney General, eligible families will receive $300 a month for young children and $250 per month for families with children between the ages of 6 and 17. The IRS will provide the credit as a monthly payment. “The pandemic has been tough on families across California,” said Bonta. “The Child Tax Credit payments should be a bright spot for our families, putting money in their pockets as the…
In re Dockins, ___BR___ (Bankr. W.D.N.C. June 4, 2021)
In re Dockins, ___BR___ (Bankr. W.D.N.C. June 4, 2021), bky case no. 20-10119, holds that, unlike IRAs, Debtors keep inherited 401(k)s because inherited 401(k)s are NOT property of the Debtor’s bankruptcy estate: In the decision, Bankruptcy Judge Hodges explains exemptions never come into play with inherited 401(k)s because inherited 401(k)s aren’t estate property in the first place,. In Clark v. Rameker, 573 U.S. 122 (2014), the Supreme Court held that individual retirement accounts inherited before bankruptcy are not exempt and belong to creditors. It follows, does it not, that a debtor cannot keep a 401(k) inherited before bankruptcy? Answer: Wrong.…