The Bankruptcy Law Firm, Prof. Corp.
Gray1 CPB, LLC vs. SCC Acquisitions, Inc
Gray1 CPB, LLC vs. SCC Acquisitions, Inc., ___ CA3d___, 2014 Westlaw 1388697 (California State Court Court of Appeals 2014): A California appellate court has held that once a judgment creditor has accepted a cashier’s check from a judgment debtor, the creditor no longer has the right to collect post-judgment attorneys’ fees. Comment: Take the money!! A judgment creditor should ALWAYS accept full payment of the judgment, if the judgment debtor sends it to judgment creditor. Lucky (and rare) judgment creditor who gets paid judgment, without struggling to collect the judgment. Unless the attorneys fees claim is a very large claim,…
Law v. Siegel, Chapter 7 Trustee
Law v. Siegel, Chapter 7 Trustee, __ U.S. __, 134 S.Ct. 1188, 2014 WL 813702 (March 4, 2014): The Supreme Court of the United States held that a bankruptcy court exceeded the limits of its authority by imposing a surcharge on a debtor’s homestead exemption to pay for a chapter 7 trustee’s litigation fees and costs incurred in avoiding a fraudulent lien against estate property created by the debtor. In a unanimous opinion written by Justice Scalia, the Court held that a bankruptcy court cannot exercise its authority under 11 U.S.C. § 105(a) or its inherent equitable powers in contravention…
Menjivar v. Wells Fargo Bank, N.A.
Menjivar v. Wells Fargo Bank, N.A. (9th Cir. BAP January 28, 2014)(Unpublished): The United States Bankruptcy Appellate Panel (the "BAP") upheld a bankruptcy court’s dismissal of the debtors’ claims against Wells Fargo Bank ("WFB") without leave to amend. The claims sought to invalidate a trust deed against the debtors’ residence relating to a refinance transaction. The BAP found that: (1) any amended allegations in regard to the fraudulent transfer claims were preempted as inconsistent with the Home Owners’ Loan Act of 1933 ("HOLA"); (2) the actual fraudulent transfer allegations improperly focused on the transferee’s intent; and (3) the constructive fraudulent…
Analysis: Supreme Court Hears Arguments on Whether an Inherited IRA is Exempt
By Charles J. Tabb Mildred Van Voorhis Jones Chair in Law, University of Illinois, and Resident Scholar for the American Bankruptcy Institute The United States Supreme Court yesterday heard oral arguments in the case of Clark v. Rameker, on the issue of whether an inherited IRA is exempt. The Seventh Circuit had denied the debtor’s exemption, disagreeing with the Fifth Circuit in the Chilton case, as well as the clear majority of lower courts, which had held that an inherited IRA is exempt under section 522(b)(3)(C) or 522(d)(12) (depending on whether the debtor elects the state or federal exemptions). On…
Fowler vs. U.S. Bank, N.A., 2014 Westlaw 850527 (District Court S.D. Tex. 2014)
Facts: Two homeowners facing foreclosure filed an action against their mortgage lender under the Truth in Lending Act (“TILA”), alleging a variety of violations. One of the plaintiffs’ theories was that the mortgage had been assigned and that the assignee had failed to inform the borrowers of the assignment. The lender moved to dismiss the complaint, arguing that the borrowers themselves had disputed whether the assignment had actually taken place. Reasoning: Although the court dismissed some of the plaintiffs’ claims, the court upheld the claim under 15 U.S.C.A. §1641(g), enacted in 2009, which provides that “not later than 30 days…
Preview: Scope of Protections for Retirement Funds in Bankruptcy at Issue in Case Before Supreme Court on Monday
Scheduled for oral argument on Monday, Clark v. Rameker presents the Supreme Court with a case that has a clean and straightforward question of statutory interpretation, with no looming shadow of oppressive media scrutiny, according to a SCOTUSBlog preview of the argument. Among the assets exempt from the estate of a debtor in bankruptcy, Congress has with steadily increasing generosity included a wide variety of retirement funds. The specific question in this case is whether those provisions exempt the $450,000 IRA that petitioner Heidi Clark inherited upon the death of her mother. If the IRA is exempt, she can keep…
Law v. Siegel (In re Law)
Law v. Siegel (In re Law), No. 12-5196, 571 U.S. __ (United States Supreme Court 3/4/14): In a unanimous decision authored by Justice Scalia, the Supreme Court found that a bankruptcy court may not surcharge the homestead exemption as a result of the debtor’s misconduct. The bankruptcy court found that the debtor created a fictional loan "to preserve his equity in his residence beyond what he was entitled to exempt" by perpetrating "a fraud on his creditors and the court." That court surcharged the debtor’s $75,000 homestead exemption to reimburse the trustee’s attorney fees. The surcharge was upheld on appeal…
Public Comment Period Ending Soon for Proposed Amendments to the Federal Rules of Bankruptcy Procedure
The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed amendments to the Federal Rules of Bankruptcy Procedure and Official Forms, and requested that the proposals be circulated to the bench, bar, and public for comment. On August 15, 2013, the public comment period opened for the proposed amendments to Bankruptcy Rules 2002, 3002, 3007, 3012, 3015, 4003, 5005, 5009, 7001, 9006, and 9009, and Official Forms 17A, 17B, 17C, 22A-1, 22A-1Supp, 22A-2, 22B, 22C-1, 22C-2, 101, 101A, 101B, 104, 105, 106Sum, 106A/B, 106C, 106D, 106E/F, 106G, 106H, 106Dec, 107, 112, 113, 119, 121, 318, 423, and 427. The public…
First-Citizens Bank & Trust Co. v. Reikow
First-Citizens Bank & Trust Co. v. Reikow, 313 P.3d 1208 (Wash.App. 2013) An appellate court in Washington has held that despite a broad waiver of antideficiency protections contained in a guarantee, the guarantor was nevertheless protected by the “fair value” limitation on the lender’s right to recover. Though this is a Washington state court decision, not a federal court decision, it is useful because it highlights certain issues relating to liability of persons who GUARANTEE they will pay debts owed by some other person/entity. Facts: A lender funded a $6.7 million construction loan to a development company. The equity holders…
Bradley vs. Franklin Collection Service, Inc.
Bradley vs. Franklin Collection Service, Inc., __ F.3d __, 2014 Westlaw 23738 (11th Cir. 2014). The Eleventh Circuit Court of appeals held that an attempt by a collection agency to collect a 33% “collection fee” violates the Federal Debt Collection Practices Act, unless the consumer has agreed in advance to pay “reasonable collection agency fees.” Facts: Two patients incurred medical expenses. One of the patients signed an agreement stating that he would pay “all costs of collection including … reasonable collection agency fees.” The other patient’s agreement stated that he would pay “all costs of collection,” but that agreement did…