The Bankruptcy Law Firm, Prof. Corp.
The $50 Billion Race to Save America’s Renters from Eviction (While Violating Rights of America’s Landlords)
The Biden administration again extended a federal moratorium on evictions last week, but conflicting court rulings on whether the ban is legal, plus the difficulty of rolling out nearly $50 billion in federal aid, mean the country’s reckoning with its eviction crisis may come sooner than expected, the Washington Post reported. The year-old federal moratorium — which has now been extended through June 30 — has probably kept hundreds of thousands or millions of people from being evicted from their apartments and homes. More than 10 million Americans are behind on rent, according to Moody’s, easily topping the 7 million…
CFPB Proposes Delaying Implementation of Debt-Collection Rules
The Consumer Financial Protection Bureau yesterday proposed postponing the implementation of two new Fair Debt Collection Practices Act rules governing borrower communication, which currently have a Nov. 30 start date, the American Banker reported. One rule delineates what constitutes harassment, false representation and unfair practices by debt collectors. The other clarifies the disclosures collectors must provide to consumers regarding communication with credit-reporting agencies and prohibits collectors from threatening to sue borrowers with time-barred debt. The delay would mean that third-party mortgage-servicing entities and others governed by the FDCPA will not be able to use the new safe harbors for compliance…
Consumer Protection Financial Bureau (“CFPB”) Proposes To Stop Foreclosures Through The End Of 2021
Saying that the pandemic has caused a “shocking increase in housing uncertainty,” the CFPB proposed Monday, 4/6/21, to stop mortgage servicers from foreclosing on most home loans until after the end of 2021. The plan outlined by the agency is an attempt to give borrowers time to find ways to make payments once pandemic relief ends. “We are going to use everything in our toolbox to prevent avoidable foreclosures,” Acting CFPB Director Dave Uejio told reporters in a telephone conference call. “This rule is one of the sharpest tools in our toolbox.” He said the agency wants “to ensure that…
Sandford Landress v. Cambridge Land Co. II LLC (In re Cambridge Land Co. II LLC), 20-1110 (B.A.P. 9th Cir. April 2, 2021)
BAP Says Undisclosed Assets Revest in the Debtor After Dismissal of Bankruptcy case, but Not After Closing of bankruptcy case. If bankruptcy case is closed as fully administered, only scheduled assets are abandoned back to debtor, per 11 USC 350: If a case is dismissed, all assets revest in the debtor and nothing remains in the bankruptcy estate, not even undisclosed assets. Unscheduled, undisclosed property is treated altogether differently when a case was dismissed compared to what happens if the case was closed, as the Ninth Circuit Bankruptcy Appellate Panel explained in an April 2 opinion. If the case was…
A US District Court Rules that the Consumer Financial Protection Bureau (“CFPB”) Lacked Authority To Bring Suit While Its Structure Was Unconstitutional
On March 26, the U.S. District Court for the District of Delaware dismissed a 2017 lawsuit filed by the CFPB against a collection of Delaware statutory trusts and their debt collector, ruling that the Bureau lacked enforcement authority to bring the action when its structure was unconstitutional. As previously covered by InfoBytes, the Bureau alleged the defendants filed lawsuits against consumers for private student loan debt that they could not prove was owed or that was outside the applicable statute of limitations, which allowed them to obtain over $21.7 million in judgments against consumers and collect an estimated $3.5 million…
In re Innerline Engineering, Inc.
In re Innerline Engineering, Inc., 6:21-bk-11349-WJ (Bankr. C.D. Cal. Mar. 31, 2021) Bankruptcy Court DENIED motion of bankruptcy debtor Innerline Engineering, Inc., which moved Bankruptcy Court to extend the debtor’s time to file debtor’s bankruptcy schedules, in the emergency SubV (Chapter 11 bankruptcy, 11 USC 1181 to 11 USC 1195 is the “SubchapterV part of Chapter 11): The United States Bankruptcy Court for the Central District of California (Judge Wayne Johnson) denied the motion of Chapter 11 debtor and debtor-in-possession Innerline Engineering, Inc., that moved to extend the time for Innerline Engineering to file its case initiation documents (schedules, etc),…
On 3/29/21, President Biden extended the National Eviction Moratorium through June 2021
On 3/29/21, President Biden extended the National Eviction Moratorium through June 2021. However, United States Courts are split on whether it is legal for the government to prohibit landlords from evicting tenants who fail to pay the landlords rent that the tenants owe the landlords, without the government paying that rent to the landlords. The legal argument is that the right of landlords to collect rent, per leases, is a property right, which cannot be taken away from landlords by the government, without the government paying the landlords for taking away the landlords’ right to evict nonpaying tenants, as allowed…
Gaske v. Satellite Restaurants Inc. Crabcake Factory USA (In re Satellite Restaurants Inc. Crabcake Factory USA), ___BR___ (Bankr. D. Md. March 19, 2021), bky case no. 21-00012 holds that Corporate Debtors in Subchapter V May Discharge 11 USC 523(a)
Only individuals in subchapter V of chapter 11 are barred from discharging debts found to be nondischargeable under Section 523(a). The first court to grapple with the new issue, Bankruptcy Judge Maria Ellena Chavez-Ruark of Greenbelt, Md., decided that corporate debtors in subchapter V of chapter 11 may discharge debts that would not be discharged under Section 523(a). In other words, according to Judge Ruark, only individual debtors in subchapter V are unable to discharge debts that are found to be excepted from discharge under Section 523(a). Before bankruptcy, more than a dozen former employees filed a wages and hours…
The Us Consumer Financial Protection Bureau (“CFPB”) Is “Encouraging” Banks and Debt Collectors Not To Take, From Consumers, Toward Paying Debts That Consumers Owe
The US Consumer Financial Protection Bureau (“CFPB”) is “encouraging” banks and debt collectors NOT to take, from consumers, toward paying debts that consumers owe, the $1,400 stimulus payments that the federal government is sending out to consumers, under the newest covid relief law. See below article. However, there is nothing in that newest covid relief law that prevents/prohibits banks and debt collectors from taking those $1,400 payments from consumers. Therefore, the CFBP “encouragement” is unlikely to be effective in keeping banks and debt collectors from taking those $1,400 payments from consumers. March 17, 2021WASHINGTON, D.C. – Consumer Financial Protection Bureau…
Educational Credit Management Corp. v. Goodvin, ___BR___ (US District Court Kansas 3/17/21) appeal from bankruptcy court to US District Court #20-1247
Many Bankruptcy Judges (here a bankruptcy judge in Kansas, affirmed on appeal by US District Court in Kansas) looked for and found way to discharge student loan debt, even though the wording of 11 USC 523(a)(8) only allows discharging student loan debt that is federal or federally insured (which is almost all student loan debt) if it would be an UNDUE hardship on the borrower (or the borrower’s dependents) if the borrower was required to repay the student loan debt, over the borrower’s whole working life. Decision turned on 2 things: (1) Inability to Cover Accruing Interest Was Pivotal on…