The Bankruptcy Law Firm, Prof. Corp.
Inst. of Imaginal Studies v. Christoff (In re Christoff) (B.A.P. 9th Cir., 2015)
Inst. of Imaginal Studies v. Christoff (In re Christoff) (B.A.P. 9th Cir., 2015): Held that debtor who was contractually obligated to pay a student loan, but did not actually receive funds, could discharge that contract obligation. May be case of first impression. Facts: Meridian is a for-profit California corporation which operates a private university licensed under California’s Private Post Secondary Education Act of 2009, Cal. Educ. Code § 94800, et seq. If a graduate of Meridian fulfills other post-graduate requirements, the graduate may obtain a license from California to practice as an independent, unsupervised psychologist. Debtor applied for admission to…
Ezra v. Seror (In re Ezra)
Ezra v. Seror (In re Ezra), 537 B.R. 924 (B.A.P. 9th Cir. 2015): The Ninth Circuit Bankruptcy Appellate Panel ruled that res judicata barred an appellant, who had raised one state law limitations argument at trial in defense of a trustee’s fraudulent conveyance action, from raising a related but different limitations defense for the first time on appeal. Appellant could not raise the second limitations defense, for the first time on appeal, because an appellate court will not consider such an argument first raised on appeal, except under circumstances not present in the case. The court also decided that the…
HSBC Bank v. Blendheim (In re Blendheim)
HSBC Bank v. Blendheim (In re Blendheim), ___F.3d ___, 2015 WL 5730015 (9th Cir. Oct. 1, 2015). 9th Circuit Court of Appeals joins Fourth Circuit, and Eleventh Circuit, in holding that a Chapter 13 debtor can strip from secured, to unsecured, a completely underwater junior DOT loan, owed on debtor’s primary residence, in a "Chapter 20" bankruptcy case. "Chapter 20" is bankruptcy slang for a debtor first filing a Chapter 7 bankruptcy case, and receiving a discharge of unsecured debt in that Chapter 7 bankruptcy case, and then soon thereafter filing a Chapter 13 bankruptcy case (7 + 13 +…
Coyle v. United States (In re Coyle)
Coyle v. United States (In re Coyle), 524 B.R. 863 (Bankr. S.D.Fla., 2015) addresses issues regarding whether a tax can be dischargeable, per 11 USC 523(a)(1), when the debtor’s tax return for that tax is filed later than when it was due, but is filed more than 2 years before debtor files bankruptcy. In Coyle, the taxpayer filed his tax returns later than they were due, and filed the tax returns after the IRS had already assessed the taxes. In Coyle, the bankruptcy for the Southern District of Florida avoided following the so called McCoy rule (McCoy rule prevents late…
Fed Interest Rate Countdown Begins Amid Deluge Of Data
Thursday, 9/17/15, is D-Day for the Federal Reserve to come to a decision on whether to increase interest rates. And the nation’s central bank, which keeps insisting its decision is dependent on incoming economic data, will have to sort through an onslaught of data points before it goes public with its decision Sept. 17 at 2 p.m. ET. The Fed is weighing its first rate hike since 2006. The Janet Yellen-led Fed has emphasized that its decision-making is data-dependent. Well, recent U.S. data on jobs, the pace of economic growth, the health of the economy’s services sector and sales of…
COMMENTARY: Supreme Court Denies Law Firm Payment for Defending Right to be Paid
On 6/16/15, the US Supreme Court issued its decision in Baker Botts, LLP v. ASARCO, LLC. The US Supreme Court had granted certiorari to decide the issue of: “whether Sect. 330(a)(1) permits a bankruptcy court to award attorneys’ fees for work performed in defending a fee application.” By a vote of 6-3, with US Supreme Court Justice Thomas writing for the majority, the US Supreme Court held that Bankruptcy Code section 11 USC 330(a) does not give bankruptcy courts the discretion to award fee-defense fees under any circumstances. The Court reasoned that the plain text of the statute, which only…
In re Gatewood, a new case, by 8th Circuit BAP, and 11st Circuit Crawford case, disagree
In re Gatewood, a new case, by 8th Circuit BAP, and 11st Circuit Crawford case, disagree: In Gatewood, a Bankruptcy Appellate Panel for the Eighth Circuit has held that a proof of claim filed by a creditor on an out-of-statute debt is not a violation of the Federal Fair Debt Collection Practices Act. The debtors had urged the court to follow the Eleventh Circuit’s holding in Crawford v. LVNV Funding, LLC, 738 F.3d 1254 (11th Cir. 2014), which said debt-collector creditors who file a time-barred proof of claim in a Chapter 13 bankruptcy case engage in deceptive, misleading, unconscionable, or…
Debt Collection Report Captures Horror Stories
A new report by the Center for Responsible Lending has revealed what many consumers have known for years. Debt collectors often cross the line with abusive behaviors. From coercive language to outright lies about debt to forged documents, federal and state regulator investigations into debt buyers and debt collectors revealed a pattern of abuses prevalent within the industry. Recent investigations have forced debt collectors to pay tens of millions of dollars in fines for multiple instances of illegal activity. The report comes as several state legislatures are considering legislation to put in place new rules-of-the-road for debt collectors to protect…
US Supreme Court rules on 6/1/15 that Chapter 7 debtors CANNOT lienstrip a junior lien, even if that junior lien is completely under water, meaning there is not even $1 of equity available to pay the junior lien, after the senior lien(s) are paid in full
The U.S. Supreme Court on June 1, 2015, unanimously held in Bank of America, N.A. v. Caulkett that a chapter 7 debtor cannot "strip off" even a totally underwater mortgage under § 506(d), reversing the Eleventh Circuit. In so holding, the Court not only reaffirmed but extended its controversial decision in Dewsnup v. Timm, 502 U.S. 410 (1992), in which the Court had held that a chapter 7 debtor cannot "strip down" a partially underwater mortgage under § 506(d). Many observers had thought — especially after oral argument in Caulkett — that the Court might take this opportunity to overturn…
New Life Adult Medical Day Care Center v. Failla & Banks, LLC, et al. (In re New Life Adult Medical Day Care Center, Inc.
New Life Adult Medical Day Care Center v. Failla & Banks, LLC, et al. (In re New Life Adult Medical Day Care Center, Inc., ___BR___, 2014 WL 6851258 (Bankruptcy Court, D. NJ 2014): Held that a fraudulent transfer, made by the debtor, could NOT be avoided and recovered from the recipient of the fraudulent transfer, because recovering the fraudulent transfer would not benefit the bankruptcy estate, and 11 USC 550(a), the Bankruptcy Code section governing recovering fraudulent transfers, only allows recovering a fraudulent transfer where recovering the fraudulent transfer would "benefit the bankruptcy estate" of the debtor. In Medical Day…