Section 1329(c), as it currently exists, forecloses the ability of Chapter 13 debtor to modify a confirmed plan to alter the plan payment amount while maintaining an extended plan, previously approved under the CARES Act. (Hanan) In re Nelson, 2022 WL 6795096 (Bankr. E.D. Wis. October 11, 2022) Case Summary Immediately after the onset of the COVID-19 pandemic, Congress sought...

A referral fee by retained special counsel paid to debtor’s attorney violates the prohibition in § 504 in that the referral fee constitutes an unauthorized splitting of attorney’s fees. (Williamson) In re Davis, 638 B.R. 198 (Bankr. M.D. Fla. March 31, 2022) Case Summary Four years after Lisa Davis filed her Chapter 13 petition, she was involved in an auto...

Secured creditor in a Chapter 13 case entitled to relief from the stay due to lack of adequate protection where the creditor neglects to file a proof of claim and, as a consequent, received no payments under a Chapter 13 plan. (Conley) Weyer v. Valley Communities Credit Union, 2022 WL 1597293 (W.D. Wis. May 19, 2022) Case Summary Dana and...

The Fourth Circuit Court of Appeals held that a plan proposal to create an asbestos trust through Chapter 11 bankruptcy was “insurance neutral,” and the debtor’s insurer was not a party in interest under Code § 1109(b), which contains a noncomprehensive list of parties in interest to a Chapter 11 case. Whether the insurer was a party in interest determined whether...

After the CARES Act’s 120-day moratorium on evictions ended, the Centers for Disease Control (“CDC”) extended the moratorium, with the CDC’s order based on authority under the Public Health Service Act of 1944. CDC stepped into the landlord-tenant arena to make and enforce regulations necessary to prevent spread of COVID-19, citing 42 U.S.C. § 264(a). Subsequent to CDC’s action, Congress...

By Kevin M. Ball, Eastern Michigan University Senator Warren and Representative Nadler introduced identical legislation entitled the Consumer Bankruptcy Report Act (“CBRA”) late in the 116th Congress. Although the bills died without action at the conclusion of that term, the sponsors have indicated their intent to reintroduce them in the 117th Congress. The legislation would bring major changes to the...

The no man's land between the mortgage due date and late payment is a persistent trouble spot for Chapter 13 practitioners. Are there arrears when the case is filed during the grace period and the payment made before it was late? In Borre, Judge Ronald Sargis of ED CA said no. He held that the payment was not in default...

By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of TN (Nashville) The automatic stay does not require a creditor pursuing a prepetition nonbankruptcy court action to dismiss that action once a bankruptcy case is filed; requesting continuances and attending status conferences do not constitute “continuation” of the prepetition action for purposes of the automatic stay....

From their spring edition of The Quarterly our friends at NACTT have shared a timely piece from creditor attorney Thomas Humphries. _____________________ Thomas Humphries is an attorney with the firm of Sirote & Permutt, PC in Birmingham Alabama. Thomas represents the mortgage banking industry and various creditors in bankruptcy proceedings throughout the State of Alabama. Thomas’s practice includes the defense...