The Bankruptcy Law Firm, Prof. Corp.
Truck Insurance Exchange v. Kaiser Gypsum Co. Inc., 22-1079 (Sup. Ct. June 6, 2024)
In Truck Insurance Exchange v. Kaiser Gypsum Co. Inc., 22-1079 (Sup. Ct. June 6, 2024) the US Supreme Court unanimously ruled that an Insurer for the bankruptcy debtor is a party in interest under 11 USC 1109(b) of the Bankruptcy code, and therefore has standing to object to a proposed Chapter 11 plan. Reversing the Fourth Circuit today, the Supreme Court held that a chapter 11 plan that is “insurance neutral” does not deprive the insurer of standing to raise objections to the plan. For a unanimous Court, Justice Sonia Sotomayor said, “Courts must determine on a case-by-case basis whether…
In re Cummings,___ BR___ (Bankr. Court D.N.M. May 22, 2024) case no, 23-10321
In re Cummings,___ BR___ (Bankr. Court D.N.M. May 22, 2024) case no, 23-10321: This Bankruptcy Court Decision discusses 6 different theories (with 6 different outcomes) that other cases have used, to determine whether a Chapter 7 Trustee can be paid any trustee fee, and if so, what dollar amount of trustee fee, when a Chapter 7 debtor converts the debtor’s Chapter 7 bankruptcy case to Chapter 13, after the Chapter 7 trustee discovers assets that the debtor concealed/failed to schedule, but before Chapter 7 Trustee can sell those assets: In re Cummings decision discusses that Courts have used at least…
American Bankruptcy Institute (“ABI”) 5/23/24 e-newsletter reports that Borrowers, especially the young, struggle with credit card debt in potentially bad sign for economy
NEW YORK (AP) — Consumers are increasingly struggling to pay their credit card bills, raising concerns about severe delinquencies spiraling and sapping consumer spending. The share of credit card debt that’s more than 90 days overdue rose to 10.7% during the first quarter, a 14-year high, according to the Federal Reserve Bank of New York’s report on first-quarter household debt. A year ago severe delinquencies totaled only 8.2% of credit card debt. The first-quarter jump in severe delinquencies was the biggest since 2011. Meanwhile total credit card debt rose to $1.12 trillion from just under $1 trillion a year ago.…
American Bankruptcy Institute (“ABI”) Task Force on Subchapter V Chapter 11 cases, issues its Final Report on 4/23/24
Following is a summary of the Report: Overall The Task Force undertook an in-depth study of Subchapter V statutes and case law, analyzed empirical data, and heard from major bankruptcy constituents. Overall, the Task Force finds that: Subchapter V is working as Congress intended, allowing smaller companies to reorganize and pay creditors; and Subchapter V statutes and practices could benefit from refinement or statutory amendment. Background Smaller businesses are the core of the U.S. economy: U.S. has 33.2 million small businesses, employing over 61 million people and 46% of all private sector employees; but 50% of small businesses fail in…
Chamber of Commerce of the United States of America, et al, v Consumer Financial Protection Bureau, ___F.4th.____ (5th Cir. 5/1/24), case No. 24-10248:
The U.S. Circuit Court of Appeals for the Fifth Circuit, on 5/1/24, directed a US District Judge in Texas, to rule, by the end of next week, whether or not to issue a preliminary injunction, to block the U.S. Consumer Financial Protection Bureau’s new rule capping credit card late fees at $8. The order, opens new tab late Tuesday by the three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals came in response to a bid by banking and business groups to have the appellate court itself decide whether the rule should be blocked. Groups including the…
Americans Are Falling Behind On Their Payments
[reports Credit & Collection 4/25/24 e-newletter, repeating what CNN said] America’s relentless spending has kept the economy motoring. But it’s starting to worry some observers. Chicago Federal Reserve President Austan Goolsbee said Friday that while consumer debt levels aren’t yet “especially” high, the Fed is concerned about the rate of consumer delinquencies, or missed or late payments on expenses such as auto loans, credit card bills and rent. “If the delinquency rate of consumer loans starts rising, that is often a leading indicator for, ‘things are about to get worse,’” he said at a moderated panel hosted by the Society…
RE: CHAPTER 13 FEES Case RARA (“no look”) fees for attorneys representing debtors in Chapter 13 cases Increase effective 5/1/24
RE: CHAPTER 13 FEES Case RARA (“no look”) fees for attorneys representing debtors in Chapter 13 cases Increase effective 5/1/24 The US Bankruptcy Court for the Central District of California has approved increases, effective 5/1/24, in the amounts attorneys for chapter 13 debtors may charge if they execute and file a Rights and Responsibilities Agreement Between Chapter 13 Debtors and Their Attorneys, LBR Form 3015-1.RARA (RARA). For chapter 13 cases filed on or after May 1, 2024, the maximum no-look RARA fees have increased from $6,000 to $8,500 for cases involving a business. For chapter 13 cases involving non-business debtors,…
American Bankruptcy Institute (“ABI”) on 4/11/24 reports Credit Card Delinquency Rates Were Worst on Record in Fed Study
A Federal Reserve Bank of Philadelphia report found that U.S. credit card delinquency rates were the highest on record in the fourth quarter, Reuters reported. Almost 3.5% of card balances were at least 30 days past due as of the end of December, the Philadelphia Fed said. That’s the highest figure in the data series going back to 2012, and up by about 30 basis points from the previous quarter. The share of debts that are 60 and 90 days late also climbed. “Stress among cardholders was further underscored in payment behavior, as the share of accounts making minimum payments…
BankBeat, a digital publication whose audience is mainly banks and other credit card issuer, on 3/14/24 reports, in an article by BankBeat’s digital managing editor, Sam Wilmes, that the Consumer Financial Protection Bureau’s (“CFPB”) newly adopted rule forbidding credit card late fees of more than $8 “Ignores Reality”
The Consumer Financial Protection Bureau’s recent capping of credit card late fees at $8 continues the bureau’s erroneous view of the expense as an unnecessary “junk fee.” The rule also ignores two foreseeable unintended consequences: A rise in instantly declined transactions and reduced customer access to credit lines and credit card reward programs. Finalized March 5, the rule reduces the typical credit card late fee 75 percent from the usual $32 for credit card issuers with more than 1 million open accounts. The CFPB claims limiting late fees will save American families more than $14 billion annually. Alluding to the…
In re Bestwall LLC, __BR__ (Bankr. W.D.N.C. Feb. 21, 2024, case no. 17-31795)
In re Bestwall LLC, __BR__ (Bankr. W.D.N.C. Feb. 21, 2024, case no. 17-31795) holds Lack of Financial Distress of person/entity filing bankruptcy does NOT Divest a Bankruptcy Court of Subject Matter Jurisdiction over the bankruptcy case, but Bankruptcy Court can dismiss the bankruptcy case for being filed in bad faith, or can grant relief from stay to creditors, etc. Example: In In re LTL Management LLC, 58 F.4th 738, 64 F.4th 84 (3d Cir. Jan. 30, 2023), the Third Circuit dismissed the chapter 11 case of a Johnson & Johnson subsidiary for lack of “financial distress”, but didn’t rule there…