The Hanging Paragraph – Hanging on Every Word Part 4 of 4

By Anthony J. Gomez, CPA, former extern to the Honorable John P. Gustafson, Northern District of Ohio at Toledo

V. The Good Faith Requirement

The hanging paragraph was enacted to protect creditors. It accomplishes this by prohibiting the bifurcation of certain secured debts that were acquired shortly before the time of filing. Despite a Chapter 13 debtor’s inability to bifurcate those claims, under the majority rule, debtors are still able reduce the interest on newly acquired debt by utilizing the Till approach. This exposes creditors to the risk that a debtor will file a bankruptcy . . .

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“The U.S. Supreme Court has remarked that “[v]alue is a word of many meanings.” This is particularly true in bankruptcy, where the concept of value comes up repeatedly throughout the Bankruptcy Code, but “value,” with few exceptions, is not defined.”

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2020 portends a flood of bankruptcy filings. In the consumer bankruptcies, trustees and debtors' counsel often are uncomfortable with the rules in Article 9 of the Uniform Commercial Code (UCC). In this space, we have looked at topics involving the interplay of Article 9 and the Bankruptcy Code, and in this new series, we began reviewing Article 9's important rules related to consumer transactions.

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By Jan Hamilton, Chapter 13 Trustee (Topeka, KS) Click here for Part 1 of 3 8. Early Preparation for Trial As suggested, the best way to settle a case is to be willing to try that case, which means you must prepare from the get go. That preparation begins a long time before the eve of trial, namely, at the...

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The Hanging Paragraph – Hanging on Every Word Part 4 of 4

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The Hunt for Deductible Interest – Money Too Often Left on the Table

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