Recent Cases
Kerns v. Foss (In re Chapter 13 Trustee’s Motions for Declaratory Relief Challenging the Constitutionality of 28 U.S.C. § 586(e)(1) and 11 U.S.C. § 1326(b)(2)
Kerns v. Foss (In re Chapter 13 Trustee’s Motions for Declaratory Relief Challenging the Constitutionality of 28 U.S.C. § 586(e)(1) and 11 U.S.C. § 1326(b)(2), ___BR___ (9th Cirm. B.A.P. Nov. 12, 2024), appeal 24-1012: The Ninth Circuit Bankruptcy Appellate Panel (“BAP”) denied the Chapter 13 Trustee’s argument that it denieds Chapter 13 Trustees due process, for Chapter 13 Trustees to only be paid Chapter 13 Trustees’ fees if a Chapter 13 plan is confirmed, and for Chapter 13 Trustees to be paid ZERO Trustee’s fees, if the Chapter 13 Plan is not confirmed in the debtor’s chapter 13 case, such…
Chicago & Vicinity Laborers’ District Council Pension Plan v. R&W Clark Construction Inc. (In re R&W Clark Construction Inc.)
Chicago & Vicinity Laborers’ District Council Pension Plan v. R&W Clark Construction Inc. (In re R&W Clark Construction Inc.), ___BR___ (US District Ct, N.D. Ill. Nov. 14, 2024), appeal 24-1463: This is turning into a trend: Judges deciding that debts can be held to be nondischargeable, per 11 USC 532, in SubV Chapter 11 cases where the subV debtor is a corporation or other entity. Here a US District Judge follows the Fourth and Fifth Circuits and rejects a contrary holding by the Ninth Circuit BAP. In his November 14 opinion, District Judge Manish S. Shah followed the Fourth and…
Klemkowski v. CitiMortgage Inc. (In re Klemkowski), __ BR__ (Bankr. D. Md. Oct. 30, 2024)
Klemkowski v. CitiMortgage Inc. (In re Klemkowski), __ BR__ (Bankr. D. Md. Oct. 30, 2024), bankruptcy case number 22-10257 which holds that it violates the bankruptcy automatic stay for a mortgage servicer to prohibit a bankruptcy debtor from using the mortgage servicer’s online payment processing system, to pay the debtor’s monthly mortgage payments. Bankruptcy Judge Michelle Harner decided that a mortgage servicer must allow a chapter 13 debtor’s continued use of an online payment platform. Bankruptcy Judge Michelle M. Harner of Baltimore decided that a mortgage servicer who barred the chapter 13 debtor from using the servicer’s online payment platform…
In re Jin, ___ BR ___ (Bankr.Ct, D. Md. Oct. 15, 2024) case
Bankruptcy Court decisions disagree on whether a Chapter 7 Trustee is entitled to be paid a trustee’s fee on the money the trustee pays to a NON-debtor Co-Owner of a Property, partly owned by the Chapter 7 bankruptcy debtor, which the Chapter 7 Trustee sells: Bankruptcy courts are divided on whether the calculation of a trustee’s commissions includes distributions made to co-owners of property that the trustee has sold. On a question where the bankruptcy courts are divided, Bankruptcy Judge Maria Elena Chavez-Ruark of Greebelt, Md., decided that the calculation of the compensation of a chapter 7 trustee is based…
Okorie v. Citizens Bank (In re Okorie)
A US Fifth Circuit Court of appeals case, Okorie v. Citizens Bank (In re Okorie), 24-60255 (5th Cir. Oct. 11, 2024) discusses 3 limited circumstances in which a chapter 7 debtor has standing to object to a creditor’s proof of claim, or to oppose the chapter 7 bankruptcy trustee selling the chapter 7 debtor’s house or other property. A bankruptcy court decision, In re Atiyat, 21-32555 (E.D. Va. Oct. 11, 2024) says there is a fourth circumstance in which a chapter 7 debtor has standing to do these things: On 10/11/24, both the US Fifth Circuit Court of Appeals, and…
Samson v. LCF Group Inc. (In re Bridger Steel Inc.), ___BR___ (Bankr. D. Mont. Sept. 30, 2024)
Samson v. LCF Group Inc. (In re Bridger Steel Inc.), ___BR___ (Bankr. D. Mont. Sept. 30, 2024): Can a Bankruptcy Trustee be forced to arbitrate trustee’s allegation that a creditor’s claim was usurious under applicable state law: this decision says no, Trustee cannot be forced to arbitrate. Bankruptcy Judge Hursh Decision refuses to order trustee to arbitrate trustee’s allegations that creditor’s claim was usurious under applicable state usury law. When a trustee objects to the allowance of a claim because it was allegedly usurious under state law, the trustee cannot be compelled to arbitrate the question of usury, according to…
Tico Construction Co. v. Van Meter (In re Powell), ___F.4th___ (9th Cir. Ct. Appeals 10/1/24)
Tico Construction Co. v. Van Meter (In re Powell), ___F.4th___ (9th Cir. Ct. Appeals 10/1/24): Ninth Circuit Court of Appeals, in a 2 to 1 decision, holds that even when a person/entity which is NOT eligible to file Chapter 13 bankruptcy, files a Chapter 13 bankruptcy in bad faith, that the person none-the-less has an absolute right to later dismiss the Chapter 13 case, pursuant to Bankruptcy Code section 11 USC 1307(b), which governs debtor’s right to dismiss a Chapter 13 case. This decision is correct based on the wording of 11 USC 1307(b), but will just encourage people who…
Analysis: More Young Adults Filing for Bankruptcy
Bankruptcy filings among 18- to 29-year-olds have surged nearly 17% from Q1 to Q2 of 2024 and are up 13% compared to last year, according to Forbes. While the pandemic sparked a drop in filings due to relief measures, debt among young adults has since risen, reaching $1.12 trillion for 18- to 29-year-olds. Filings have jumped 50% since a 24-year low in early 2022. There’s been a rise in both potential and actual bankruptcy filings since late 2022, and the trend has continued into 2023, says Justin Gillman, bankruptcy attorney at Gillman, Bruton & Capone, LLC in New Jersey. “This…
Senior Living and Care Leads Record-Breaking Distress in Health Care Sector Bankruptcy Filings
American Bankruptcy Institute (“ABI”) reports, in ABI’s 8/15/24 e-newsletter, that distress levels in health care, as measured by the number of bankruptcy filings, had another record-breaking quarter, led by the senior living and care sector, according to the latest Polsinelli-TrBK Distress Indices Report, McKnight’s Senior Living reported. The Health Care Index reached the highest level of distress in the report’s history for the fifth consecutive quarter, according to the Second Quarter 2024 Chapter 11, Healthcare and Real Estate Distress Indices report. Data show that the current level of chapter 11 filings is almost 50% higher than health care distress at…
US Farmers are in Precarious Financial Position, and So are the Community Banks which Loan Farmers Money, to Enable Farmers to Plan/Grow/Harvest their next season of crops
US farmers are in a precarious financial position, and so are the community banks which loan farmers money, to enable farmers to plant/grow/harvest their next season of crops. The US Congress urgently needs to pass an extension of the current federal farm bill. The current farm bill expires on 9/30/24. But as of 8/15 24 legislation is bogged down in Congress to extend the current version of the federal farm bill expires, or pass a new improved farm bill. Though Congress could extend the current version of the bill for another year before it expires on Sept. 30, Congress should…