As a majority continue to follow stay at home orders due to the COVID-19 crisis, NACBA’s Legislative Committee with support from NACBA’s Board of Directors have been working nonstop with House and Senate staff to ensure significant bankruptcy provisions were included in H.R. 6800, Health and Economic Recovery Omnibus Emergency Solutions Act, also known as the “HEROES Act”.
The Debtor in this case was successfully represented by NACBA member Mr. David Wilkinson of Frego & Associates – The Bankruptcy Law Office, PLC in Dearborn Heights, Michigan. In this case the Debtor filed a chapter 7 bankruptcy without her spouse. Their combined income was above median and therefore the Debtor had to complete Chapter 7 Means Test Calculation on Form 122A-2.
This week NACBA performed a survey of how different courts are addressing the coronavirus pandemic. Every district’s website was examined for published orders or policies. All orders regarding wet signatures are linked along with other orders regarding COVID-19 in an Excel spreadsheet.
The National Association of Consumer Bankruptcy Attorneys (NACBA) has been working hard advocating behind the scenes (while maintaining a safe social distance) with House and Senate Judiciary Members and staff to get bankruptcy provisions passed in the current legislation known as the “CARES Act”.
The unprecedented pandemic we are now experiencing will without doubt cause financial hardship to millions of Americans who had no hint that their otherwise stable economic situations would be disrupted so completely. Even with payment moratoria and temporary bans on foreclosures and evictions, their bills will eventually come due and in many cases, without income that is lost forever, those debts will be insurmountable. Absent permanent relief, families will face wage garnishments, evictions and foreclosures.
NACBA is carefully monitoring the evolving coronavirus situation. Like many, we are hopeful for an effective solution in the near future. In the meantime, we are pleased to announce that NACBA’s 2020 Members-Only Workshop, December 1 – December 4, 2020 at the Grand Hyatt Kauai Resort & Spa in Koloa, Hawaii will be transformed to a convention / workshop hybrid atmosphere.
Prior to the Debtor’s bankruptcy he had some serious real estate tax issues. He owned real property in Pendleton County, Kentucky (the “Rogers Property”) but failed to pay taxes for tax years 2003, 2004, 2006 and 2007. The County sold the tax certificates to Kentucky Tax Bill Servicing, Inc. (“KTBS”) which filed a state court lawsuit in 2010. The lawsuit requested a personal judgment against the debtor, foreclosure of the certificates and public sale of the property. The Debtor did not respond and the state court entered an “In Rem Judgment and Order of Sale” against the Rogers Property. The 2012 judgment was silent as to the Debtor’s in personal liability. Ultimately the Rogers Property was conveyed to KTBS.
Prior to this case the Debtors had filed three chapter 13 cases in quick succession from late 2015 to early 2016 all of which were dismissed without a confirmed plan. The debtors filed this chapter 13 case in March of 2019 and were originally represented by counsel. Counsel was forced to file an emergency petition to stay a state court hearing. This was a skeleton petition without schedules, statement of financial affairs or the plan. Later, council move to withdraw as Debtors’ counsel which was granted.
Prior to filing for bankruptcy, the Debtor incurred a student loan (ultimately held by Navient) to attend the Reformed Theological Seminary. The seminary was not a Title IV accredited institution. The Debtor filed bankruptcy, listed this loan and received an order of discharge. Both Navient and Experian Information Solutions LLC. (“Experian”) received notice of the discharge order. Experian prepared the Debtor’s credit report and described the Navient Loan as “account charged off,” with an outstanding balance and a past due balance.
Prior to filing bankruptcy, the Debtor borrowed money to pay for his undergraduate education. After graduating and serving in the United States Navy for five years, he borrowed additional funds to attend and complete law school. After graduating from law school his consolidated debt was $116,464.75. The total outstanding balance as of November 2019 was $221,385.49.
Does a creditor violate the automatic stay by threatening a debtor with criminal prosecution to collect a civil debt? (Bankr. W.D.VA.) In chapter 13, can an under-secured 910-car creditor tack on post-petition attorney’s fees? (Bankr. W.D.AR.) In a chapter 7 case, does the bankruptcy estate include proceeds from a post-petition settlement for events that occurred pre-petition? (Bankr. ID.) Can an appellate court summarily affirm a lower court when the appellant’s argument is seriously deficient and in utter disregard of the applicable procedural rules? (B.A.P. 1st. Cir.) Is the bankruptcy court required to dismiss a chapter 7 bankruptcy for failure to comply with the credit counseling requirements when dismissal is opposed by the Trustee holding assets? (Bankr. W.D.N.C.)
Does a bankruptcy court have the discretion to deny an amendment of exemptions if the amendment is in bad faith or would prejudice creditors? (8th Cir.) What are the dangers in filing an emergency bankruptcy petition for a Debtor you never met and who didn’t sign the bankruptcy petition? (Bankr. N.D.TX.) Does the bankruptcy court have to sustain an objection to confirmation of a provision of the national uniform plan (Official Form 113), because the plan fails to include an additional non-standard provision specifically providing that the holder of the ‘910 claim’ retain the lien securing its claim until the earlier of payment of the underlying debt determined under nonbankruptcy law or discharge under section 1328? (6th B.A.P.) In a chapter 13 bankruptcy, can a debtor claim an expense on the means test for a monthly mortgage obligation for her elderly mother-in-law? (Bankr. E.D.VA.) In an above-median income chapter 13 bankruptcy, can the Trustee object to confirmation based on the necessity of expenses claimed solely on Schedule J? (Bankr. N.D.TX.)
Does a chapter 7 debtor have standing to object to the trustee’s proposed sale of assets? (8th B.A.P.) Can a debtor exempt a rifle as “[n]ecessary apparel, bedding, foodstuffs, household furniture and appliances?” (Bankr. D.CT.). Is failure to disclose ownership of real estate grounds to deny a debtor’s motion to convert a chapter 7 to chapter 13? (Bankr. N.D.MS.) In a chapter 7 proceeding filed by one spouse only, what method should the Bankruptcy Court use to allocate tax refunds received from a joint tax return? (Bankr. N.D.IL.) Can a bankruptcy appeal be dismissed under the “fugitive disentitlement doctrine” for an appellant that has “skedaddled”? (1st Cir.).
Does a calendaring error made by Debtor’s counsel constitute “excusable neglect” under Civ. P. 60(b)(1) and Fed. R. Bankr. P. 9024? (Bankr. E.D.MI.) Can Debtors defend against a trustee’s tuition claw back by asserting they received the economic benefit of a financially self-sufficient child? (1st Cir.) In a dispute whether a chapter 7 case should be dismissed for “substantial abuse” does the Debtor’s voluntary plans to retire soon constitute “special circumstances” under the means test? (Bankr. N.D.GA.) Can judicial estoppel be used to dismiss an undisclosed lawsuit even if all creditors in the bankruptcy have been paid? (10th Cir.)
Are chapter 13 debtors required to file objections to unsecured claims that claim interest in Section 9 of Official Form 410 (Proof of Claim)? (Bankr. N.D.OH.) In a chapter 13 proceeding, should post-petition parking or moving violation tickets be treated as administrative expenses? (7th Cir.)
Can a state agency argue that a debt is non-dischargeable under Section 523(a)(7) if it began criminal proceedings to collect the debt post-petition?(Bankr. N.D.AL.) Does a chapter 7 debtor have standing to object to a claim? (Bankr. E.D.NY.) Can debtor’s counsel be paid for work performed in a chapter 7 after the case is converted to a chapter 13 bankruptcy? (Bankr. E.D.MI.) Can the Court appoint counsel to assist a pro se debtor who is facing contempt sanctions including incarceration? (Bankr. D.ME.) Are a debtor’s alleged false verbal statements about his employment to a state unemployment agency enough to find the debt is non-dischargeable under 11 U.S.C. § 523(a)(2)(A)? (Bankr. D.CO.) Can a chapter 7 discharge be revoked under Sections 727(a)(6)(A) or 727(d)(3) (refusal to obey an order) if the debtor is unable to comply with the order? (Bankr. W.D.OK.) What is better evidence of real property value, a tax assessment or a broker price opinion? (Bankr. C.D.CA.)
In a chapter 13, does a car creditor violate the automatic stay if the storage lot owner does not release a repossessed vehicle? (Bankr. E.D.MI.) Is a homestead refund credit received post-petition on real estate taxes paid pre-petition part of the bankruptcy estate? (Bankr. MN.) Does “excusable neglect” under FRCP 60 and Rule 9023 include out-and-out lawyer blunders—the type of action or inaction that leads to successful malpractice suits by the injured client? (Bankr. E.D.MI.) In a chapter 13, does a creditor have an affirmative duty to return a pre-petition repossessed vehicle? (3rd Cir.) Post-discharge, is a collection letter with a bankruptcy disclaimer a violation of the discharge injunction? (Bankr. W.D.MI.) Can a debtor use § 522(f) to avoid a judgment lien against property she acquired after the creditor recorded its judgments? (Bankr. S.D.FL.) Can a bankruptcy court sua sponte dismiss a chapter 7 bankruptcy as a bad faith filing? (Bankr. D.CT.)
Does a Defendant asserting judicial estoppel have standing to object to a motion to reopen a bankruptcy (11 U.S.C. § 503) to disclose the omitted claim? (D. W.D.WA.) Can a debtor pay off a car title pawn loan over the duration of a chapter 13 bankruptcy? (Bankr. M.D.AL.) Can a physically separated married couple, filing separately, each claim a homestead exemption in two homes? (Bankr. KS.) Does a Section 362(k) action (stay violation) survive the dismissal of the underlying bankruptcy? (3rd Cir.) Can a bankruptcy court enforce a discharge order entered in a different jurisdiction? (5th Cir.) Can a debtor discharge a private education loan for attendance at an institution not eligible to participate under Title IV of the Higher Education Act? (5th Cir.)
If a bankruptcy court denies a discharge under Section 727, does it have the authority to enter a money judgment against the debtor under a non-dischargeability proceeding under Section 523? (Bankr. E.D.MI.) Can a chapter 13 debtor cram down a residence which is part of a multi-use property? (10th B.A.P.) In a judicial estoppel situation, can the bankruptcy court infer an “intent to misuse the courts” just from a non-disclosure of an asset? (11th Cir.) In a 9011 sanctions proceeding, does a movant meet the “safe harbor” rule if it just serves the respondent with the motion for sanctions 21 days before filing it? (Bankr. C.D.CA.) Do bankruptcy courts have discretion to refuse to compel arbitration in proceedings seeking enforcement of a discharge injunction after the Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018)? (5th Cir.)
Prior to filing bankruptcy, the Debtor was sued in state court for fraudulent misrepresentation and for breaching a contract to restore a vintage automobile. A default judgment was entered against her. Ten years later she filed a chapter 13 bankruptcy. The creditor filed an adversary proceeding to determine the debt was non-dischargeable and a motion to dismiss or convert. The Debtor then filed an application to voluntarily dismiss her case under 11 U.S.C. § 1307(b). The bankruptcy court dismissed the case. On appeal the creditor’s chief argument was that Section 1307(b) does not give the debtor an absolute right to dismiss. The District Court disagreed.
Can a debtor, post-deposition, make material, contradictory changes to his deposition transcript on the Errata Sheet? (Bankr. N.D.GA.) Can the bankruptcy court allow a late claim by a creditor omitted from a timely filed creditors list? (Bankr. MD.) Can a chapter 7 debtor invalidate a mortgage lien if the mortgage holder doesn’t maintain its files and delays 10 years before completing a non-judicial foreclosure? (Bankr. E.D.WA.) Can a chapter 13 debtor strip off an unsecured lien from real property that is titled as joint tenants with rights of survivorship, where the joint tenant is not a joint debtor in the bankruptcy case? (Bankr. E.D.VA.) Is an assignee of a consumer creditor contract liable for misdeeds of the originator of the contract under the “Holder Rule”? (Bankr. N.D.TX.) In a chapter 13 plan can a debtor cram down a 910-vehicle to value if the vehicle also secured other obligations to the credit union? (Bankr. S.D.FL.) Does the “weekend rule” in Bankruptcy Rule 9006(a)(1)(C) (deadline occurring on a weekend is extended to the next business day) apply to deadlines with a specific date? (Bankr. N.D.TX.) Can a Stern objection to the Bankruptcy Court’s authority be implicitly waived if not pled in a responsive pleading per Bankruptcy Rule 7012? (Bankr.N.D.IL.)
In 2011 the Debtors filed a voluntary chapter 13 bankruptcy which was converted later that year to a chapter 11. Several years later it was converted to a chapter 7 bankruptcy. At the same time of the Debtors conversion, one of Debtor’s companies Nattco, LLC (“Nattco”) filed a chapter 11 bankruptcy. While the individual and corporate bankruptcy cases were pending, a former employee of Nattco submitted a fraud referral to the Trustee, alleging misconduct by the Debtors, including “stockpiling cash,” “taking trips to Hawaii, Puerto Rico, and Florida,” and undergoing plastic surgery. The Trustee received the referral and additional communications about alleged fraud between October 2013 and January 2014, and consequently initiated an investigation into the allegations.
The Debtor was injured in a traffic accident in 2012. Later that year he filed a chapter 7 bankruptcy. He didn’t list the personal injury as an asset on Schedule B. Instead he listed it on Schedule I in response to the request to “Describe any increase or decrease in income reasonably anticipated to occur within the year following the filing of this document:”
“Debtor was hit by a car from behind and pinned between two cars in early 2012. He had to have surgery on his arm from the fall he took after the car backed up an [sic] he hit the ground. His forearm muscle has ripped in two right in the center so the operation to repair any damage was futile. Debtor is not working right now, but [sic] Debtor is able to, he intends to apply for employment.”
In a chapter 13, should debtor’s attorney’s fees be paid before commencing repayment to unsecured creditors? (S.D.Ind.) Can a debtor get reimbursed from estate assets for paying off a debt outside of the bankruptcy? (Bankr. N.D.Ohio) In a chapter 7 bankruptcy, when is the deadline for creditors to file claims? (Bankr. N.D. Ohio) Can a bankruptcy petition preparer side-step a temporary bar order by failing to notify potential clients of the bar order and by referring those clients to friends she had trained as petition preparers? (Bankr. E.D.Wis.) When considering whether a chapter 7 bankruptcy constitutes an abusive filing under 11 U.S.C. § 707(b)(3), should the court disallow retirement deductions to determine disposable income? (Bankr. W.D.Penn.) When a child support enforcement creditor was not sent notice of a chapter 13 confirmation order, can a debtor successfully hold a creditor in contempt of that order? (Bankr. E.D.Wis.) Is failure to repossess or release the lien on a surrendered vehicle constitute contempt of a chapter 7 discharge order? (Bankr. E.D.Ky.)
Can a Chapter 7 Debtor amend his bankruptcy petition to add his spouse? (Bankr. D.Ariz.
Prior to filing bankruptcy, the Debtor hired NACBA member Jeffrey B. Kelly of the Law Office of Jeffrey B. Kelly, P.C. out of Rome, Georgia. Mr. Kelly successfully argued this case on behalf of the Debtor. The Debtor agreed to pay Mr. Kelly $4,500.00 for representation in a chapter 13 bankruptcy. The Debtor filed a chapter 13 bankruptcy and the attorney’s fees were provided to be paid in the chapter 13 plan. The Debtor had above median income and therefore was required to complete and submit Official Form 122C-2 listing his allowable expenses and calculating his projected disposable income (“PDI”).
Are voluntary retirement contributions valid means test deductions in a chapter 13? (E.D.Mich.) Can a debtor claim a homestead exemption for sale proceeds received post-petition that were not reinvested timely? (D.ME.) Does the automatic stay stop a sanction proceeding by the United States Trustee? (Bankr. D.VT.) Is a “safe harbor” letter required before filing a 9011 motion if the conduct complained of involves the filing of the bankruptcy petition? (Bankr. D.N.J.) When are punitive damages warranted when a creditor violates the automatic stay? (Bankr. W.D.VA.) Can a bankruptcy court strike a 97 page pleading because it exceeded the 25 page limit in the local rules? (Bankr. N.D.GA.) Is a state court injunction prohibiting the filing of bankruptcy invalid? (Bankr. N.D.IL.)
Prior to filing bankruptcy, the Debtors were involved in a tax dispute with the IRS. The IRS demanded the Debtors pay $107,000.00 in taxes plus $80,000.00 in fraud penalties for tax years 2009-2011. The Debtors petitioned the Tax Court for review. Shortly before the trial, the parties agreed the Debtors owed $100,000.00 but were split over calculation of the penalties. The IRS sought a 75% fraud penalty under 26 U.S.C. §6663(a), while the Debtors argued for a 20% negligence penalty under 26 U.S.C. §6662(a).
In a student loan dischargeability proceeding, can a Debtor still demonstrate undue hardship if a student loan lender offers an IBRP of $0.00 per month? (Bankr. D.OR.) In a “Chapter 20” scenario, is it bad faith for the Debtor to file the chapter 13 if the plan will not strip off a wholly unsecured second mortgage? (Bankr. S.D.Fla.) In a chapter 13 confirmation context, can a creditor successfully move for summary judgment on the issues of bad faith plan and petition under 11 U.S.C. §§ 1325(a)(3) and (a)(7)? (Bankr. D.ME.) Is intentional concealment of a lawsuit in a bankruptcy grounds to bar the law suit under the judicial estoppel principle? (7th Cir.) Does a bankruptcy court have jurisdiction to enter a monetary judgment on a disputed state law claim in the course of making a dischargeability determination? (D.NV.) Can a chapter 7 trustee reopen a bankruptcy to administer a previously disclosed and abandoned asset? (Bankr. C.D.IL.) In a dischargeability sanctions proceeding, which party bears the burden to prove that there is no objectively reasonable basis for concluding the discharge makes a creditor’s actions unlawful? (Bankr. N.D.Ohio) In resolving a trustee plan objection to confirmation, can the parties agree to strike the offending language without service or notice to creditors? (Bankr. E.D.Tenn.) Does the means test allowance for mortgage expenses create a cap which disallows the extra amount of a higher mortgage payment? (Bankr. N.D.Tex.)
The Debtor and his spouse were indebted to Standard Mortgage Corporation (“SMC”) which was secured by a mortgage on the Debtor’s real estate. The Debtor became delinquent on his mortgage payments and SMC instituted a foreclosure. Two days before sale, the Debtor filed his first chapter 12 bankruptcy. Approximately six months later, SMC moved from relief from stay which was resolved with an order for certain payments and included a “drop dead” order which allowed SMC to move ex parte for a default and obtain an order granting relief from stay.
Does a default judgment entered prior to bankruptcy have preclusive effect in a dischargeability proceeding? (2nd) Can a UCC lien be avoided if it doesn’t contain a description of the collateral and instead refers to a description in another document? (7th) Do five failed attempts of chapter 13 plan confirmation constitute per se unreasonable delay and cause for dismissal under 11 U.S.C. § 1307(c)(1)? (Bankr. E.D.Va.) After a chapter 13 discharge can the IRS collect on unpaid interest on its claim? (Bankr. Neb.) If a chapter 7 debtor’s attorney exercises control over an estate asset before abandonment, is he guilty of violating the automatic stay? (Bankr. Conn.)
Prior to filing bankruptcy the Debtor was paying Defendant Americar, Inc. d/b/a Auto Brokers (“Auto Brokers”) for the purchase of a 2007 GMC Yukon Denali and written notice was sent to Auto Brokers. Auto Brokers filed a proof of claim in the amount of $11,338.40. Approximately nine months later Auto Brokers contacted the vehicle insurance company and learned the insurance policy had been cancelled. Auto Brokers hired a towing company to repossess the vehicle.
The married Debtors (Mr. Alfonso and Ms. Diaz) filed a chapter 7 bankruptcy. Prior to filing, Ms. Diaz had been injured in a slip and fall accident while working at Nordstrom. The claim was not listed in the schedules. Ms. Diaz hired a law firm to pursue her claim. The law firm (“Firm”) searched but did not find Ms. Diaz’ bankruptcy. The Debtors then received their bankruptcy discharge.
Whether a chapter 7 debtor, who wants to retain a leased vehicle, must sign a reaffirmation agreement to assume the lease. (Bankr. D.Mass.) Is an adversary proceeding required to avoid a wholly unsecured junior mortgage in addition to chapter 13 plan language doing the same? (Bankr. N.D.Ohio) Can a chapter 13 debtor who is a Successor-in-Interest to encumbered real estate, de-accelerate the mortgage in his chapter 13? (Bankr.E.D.Wis.) Can debtor’s counsel be forced to disgorge his entire fee for failure to provide notices to the debtor pursuant to 11 U.S.C. §§ 526-528? (Bankr. D.N.J)
On August 28, 2019, the First Circuit Bankruptcy Appellate Panel affirmed a pair of orders from the Bankruptcy Court denying Debtor’s motions to vacate. This was an unpublished opinion. The Debtor filed a chapter 13 petition in September 2016 asserting an ownership interest in a two-family dwelling (the “Property”). Prior to the bankruptcy filing the Debtor and the Property were involved in foreclosure actions. The Debtor filed a plan that did not provide any treatment for the secured claims. He also asserted a homestead exemption on the Property.