The Bankruptcy Law Firm, Prof. Corp.
A New Challenge for Debtors Who Received PPP Loans Under the federal CARES Act
A New Challenge for Debtors Who Received PPP Loans Under the federal CARES Act: if the borrow is in bankruptcy, the borrower may not be able to get the borrower’s PPP loan forgiven, because the borrower filing bankruptcy may be claimed by lender to constitute an act of default, under the PPP loan terms: The CARES Act and corresponding paycheck protection program (PPP) provisions continue to provide fertile ground for discourse concerning policy implications and legislative intent amid an unprecedented pandemic, according to an analysis by David M. Barlow of the U.S. Bankruptcy Court for the District of Arizona in…
Hull v. Rockwell (In re Rockwell)
Hull v. Rockwell (In re Rockwell), ___F.3d___ (1st Cir. July 30, 2020, appeal #19-2074) sets up a Circuit Split among US Circuit Courts, which may eventually get decided by the US Supreme Court, about whether a bankruptcy debtor must reinvest homestead exemption funds in a new residence, within 6 months after the bankruptcy debtor receives the homestead exemption amount, or LOSE the exemption. In re Rockwell US First Circuit Ct of Appeals 7/30/20 case is contrary to US Ninth Cir Ct of Appeals case, In re Jacobson, 676 F.3d 1193 (9th Cir. 2012), also contrary to 5th Cir. Frost decision…
CARES Act Amendment
In two decisions on 7/30/20, by two different bankruptcy judges in two different states, the bankruptcy judges’ decisions agree that the CARES Act Amendment, which allows chapter 13 plans to be extended to last for seven years (instead of the statutory 5 year maximum Chapter 13 plan length stated in 11 USC ……) is applicable only to plans confirmed before March 27, 2020. 3/27/20 is the date the CARES Act went into effect. A Chapter 13 plan confirmed after 3/27/20 can only be maximum length 5 years (60 months), NOT 7 years. No answer yet as how Courts in the…
The United States Senate has unanimously passed legislation protecting stimulus checks from being garnished by creditors
Credit & Collection e-newsletter of 7/28/20 reports:The United States Senate has unanimously passed legislation protecting stimulus checks from being garnished by creditors. The bipartisan bill, co-sponsored by senate finance committee chairman Sen. Chuck Grassley (R-IA) and Sen. Sherrod Brown (D-OH), will ensure that coronavirus relief payments go directly to the aid of Americans. “This is a common sense measure that will ensure the $1,200 Economic Impact Payments Congress provided to help individuals meet essential needs during these trying times don’t instead end up in the pockets of creditors and debt collectors,” Grassley said in a statement, according to Newsweek. “The…
In re Specialty Shops Holding Corp.
In re Specialty Shops Holding Corp.,___F.4th___ (US District Court, District of Nebraska July 24, 2020; case number 18-405): 11 USC 546( c ) allows a creditor, which has sold goods to a debtor, shortly before the debtor files bankruptcy, to reclaim the creditor’s goods from the debtor, where the debtor has failed to pay for the goods. Specialty Shops hold that a creditor doesn’t get the goods back, it only gets a only has a general unsecured claim, if a secured lender already has a lien on the goods sought to be reclaimed, at the time the debtor files bankruptcy.…
American Bankrutpcy Institute E-newsletter of 7/23/20 Reports that Democratic Senators Push Bill Allowing Student Loans to Be Discharged in Bankruptcy, Under Certain Circumstances
Democratic Senators introduced a bill today (7/23/20) that would allow people to cancel student loan debt in bankruptcy if they can show income loss tied to economic fallout from the coronavirus pandemic, the Wall Street Journal reported. The measure from Sens. Sheldon Whitehouse (D-R.I.) and Sherrod Brown (D-Ohio) would allow student loan cancellations for people who either racked up large medical bills in the past three years or lost wages because of the coronavirus fallout. Republicans have expressed concerns that widespread student loan cancellations will cause the cost of higher education to rise, and earlier attempts to ease student loan…
Merriman v. Fattorini (In re Merriman)
Merriman v. Fattorini (In re Merriman), ___BR___ (B.A.P. 9th Cir. July 13, 2020, appeal 19-1245): 9th Circuit BAP holds that the US Supreme Court’s Acevedo opinion, which is viewed as barring federal courts, in most circumstances, from entering orders nunc pro tunc, does NOT bar a Bankruptcy Court from granting an order annulling the bankruptcy automatic stay retroactively (even though doing so is a nunc pro tunc order). In Merriman, the Ninth Circuit Bankruptcy Appellate Panel held that this year’s Acevedo decision from the Supreme Court does not bar bankruptcy courts from annulling the automatic stay. Except in unusual circumstances,…
Bankruptcy Press reports a 26% increase in Chapter 11 bankruptcy filings so far in 2020, over 2019
A 26% increase in Chapter 11 filings so far in 2020 as compared to last year can largely be blamed on the effects of COVID-19, and restructuring professionals say the spike is mirroring trends seen at the beginning of the 2008 financial crisis. Legal services firm Epiq Global released a report this week with data on the number of bankruptcy filings so far this year, revealing commercial restructuring cases are up 26% over 2019 as of the end of June, while the number of bankruptcy cases of all kinds was actually down by a similar margin over last year. The…
U.S. Weekly Jobless Claims Fall; But a Record 32.9 Million People are receiving Unemployment
Benefits, reports American Bankruptcy Institute’s 7/9/20 e-newsletter: New applications for U.S. jobless benefits fell last week, but a record 32.9 million Americans were collecting unemployment checks in the third week of June, Reuters reported. Economists cautioned against reading too much into the drop in weekly jobless claims reported by the Labor Department on Thursday, noting that the period included the July 4 Independence Day. Claims data are volatile around holidays. Large parts of the country, including densely populated states like Florida, Texas and California, are dealing with record spikes of new COVID-19 cases, which have forced a scaling back or…
In re Cherry, ___F.3d ___ (7th Cir. July 6, 2020, appeal number 19-1534)
US Court of Appeals for the Seventh Circuit Requires the Bankruptcy Court to Make Specific Findings for why the Bankruptcy Court is confirming a Chapter 13 plan that contains a plan provision that is expressly allowed by 11 USC 1322(b)—the Bankruptcy Code Section that lists what provisions a Chapter 13 plan may contain. This is a poorly reasoned decision, which, happily, is not what the US Court of Appeals for our Circuit, the 9th Circuit, or the 9th Circuit BAP, or bankruptcy courts in the 9th Circuit, require. There is nothing in 11 USC 1322(b) that would require a Bankruptcy…