RNPM, LLC v. Alvarez (In re Alvarez), 473 B.R. 853, 860–63 (B.A.P. 1st Cir. 2012) (Boroff, Deasy, Bailey)

Applying § 1322(e) and Puerto Rico law, 10% “penalty clause” in mortgage to cover costs, expenses and attorney fees was subject to equitable reduction from $7,600 to $2,000. “[Section] 1322(e) controls the determination of the amount of pre-petition attorney’s fees which may be included in a secured creditor’s mortgage arrearage claim. . . . [Section] 1322(e) permits recovery of attorney’s fees and expenses only if allowed by applicable nonbankruptcy law. . . . [P]enal clauses in Puerto Rico are ‘subject to the principle of moderation’ under Puerto Rico law. . . . [T]he $7,600.00 penalty imposed under the Mortgage exceeded the $6,400.00 Mortgage arrearage. . . . [This was a] lack of proportion between the penalty and the default of the sort frowned upon by Puerto Rico courts.”

No Author Biography has been linked to this Article.

Related Articles

ahern_larry_regular
January 15, 2023
Introduction This series reviews developments in bankruptcy procedure during 2022. Amendments to 16 rules and new one new rule took effect December 1, 2022. Many reflected changes necessitated by the Small Business Reorganization Act of 2019 (SBRA),1 and have been in place in the same or similar form on an interim basis since that legislation took effect.
Members
November 22, 2020
By David Cox,1 Cox Law Group, PLLC (Lynchburg, VA) III. Providing for the Secured Mortgage Claim, as Modified. A. Does the requirement of § 1325(a)(5)(B)(iii) for equal monthly payments permit the Debtor to propose a balloon payment in the payment of the creditor’s claim? Equal Monthly Payments Required By § 1325(a)(5)(B)(iii) Does NOT Permit Debtor To Propose A Balloon Payment....
Members
June 30, 2019
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) Over the past twenty years, the judicial estoppel doctrine has had a significant impact on people who file bankruptcy. Judicial estoppel has grown to be a significant issue within the consumer bankruptcy system. The Commission was asked to address it. Judicial estoppel is a doctrine created to protect the...
Members
M Joseph Photo 2-1-22
May 8, 2022
Faced with abusive and serial bankruptcy cases,courts have fashioned various sanctions to put a stop to gaming the system. The favored sanction of the majority of courts is to enter an order of dismissal with prejudice under Section 349(a) of the Bankruptcy Code that adds a condition prohibiting refiling another bankruptcy case for a set period of time. See Lundin...
Members
Mark
April 17, 2022
Mark Leffler, of the Boleman Law Firm in Virginia and also the current President of the Academy for Consumer Bankruptcy Education, begins a series of articles describing his firm’s development of a broader practice on behalf of consumer debtors. Look for subsequent parts of this series over the next few weeks. My fellow self-described consumer bankruptcy lawyers: you wield more...
Members
November 1, 2020
By James J. Robinson, Chief United States Bankruptcy Judge, Northern District of Alabama Under what circumstances should the trustee object to claims (assuming a purpose would be served under § 707(a)(5))? Midland Funding, LLC v. Johnson, 137 S. Ct. 1407 (2017). This case centered around the debtor’s argument that a creditor violated the Fair Debt Collection Practices Act when it...
Members
gendron-1
April 2, 2023
Section in 109(g)(2) of the Bankruptcy Code bars a debtor from filing a new case for 180 days if the Debtor voluntarily dismisses a case “following” a motion for relief. Not surprisingly, courts are split on how they interpret the word “following” as used in § 109(g)(2). After all, the word “following” is not limited to one definition, or even...
Members
October 27, 2019
By Lawrence R. Ahern, III, Brown & Ahern (Nashville, TN) Part IV Two More Things Trustees Should Know About the Small Business Reorganization Act of 2019 Introduction Four bankruptcy-related bills were enacted during the 116th Congress and signed into law on August 23, 2019.1 The legislation affected both business and consumer cases. One bill, the Small Business Reorganization Act of...
Members
January 26, 2020
By Cathy Moran, Esq. (Redwood City, CA) Clouds of uncertainty have hovered over Chapter 13 debtors who find that they need to sell appreciated property before the case is over. Does appreciation occurring after filing go to creditors on the theory that the appreciation is property of the estate? Or does the vesting of property at confirmation entitle the debtor...
Members
Eric Kimball
January 9, 2022
(Used with permission. First published in the Southern District of Florida Courthouse Beacon, December 2021) Imagine this is an article entitled Wiley Champion, Esq. Instructs How To Win Your Case Every Time. Enticing for sure. You start reading. The opening paragraph needlessly re-states the title, needlessly names the author, who is already mentioned in the title, and then defines the...
Members