To Conduit, Or Not To Conduit? That Is The Question. Or Less Shakespearean: “Conduit Mortgage Case Law”

Conduit vs. Direct Mortgage Payments – The Case Law To Consider1

The requirement that debtors pay their mortgage payments to their Chapter 13 Trustee as a “conduit” has advantages and disadvantages. One advantage is the fact that the Chapter 13 Trustee’s records are readily accepted by both the court and creditors in the event of a payment dispute. This advantage provides a clear payment record for all parties, protects debtors who are making payments. The cost of paying the mortgage through the Trustee as a conduit can be a disadvantage . . .

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The Honorable John P. Gustafson

United States Bankruptcy Judge, Northern District of Ohio

John P. Gustafson was appointed United States Bankruptcy Judge for the Northern District of Ohio in April 2014. In his former life, he was a bankruptcy law clerk, an associate and partner in a law firm representing both debtors and creditors, a solo bankruptcy practitioner representing debtors, banks and trustees, the staff attorney to a Chapter 13 trustee, and since October 1, 2007 he has been the Standing Chapter 13 Trustee for the Northern District of Ohio, Western Division. Judge Gustafson regularly writes and speaks on a variety bankruptcy issues.

Millions of ITINs Set to Expire in 2019; IRS Says Renew Early to Prevent Refund Delays

June 23, 2019

Nearly 2 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2019 as the IRS continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year. “We urge taxpayers with expiring ITINs to take action and renew the number as soon as possible. Renewing before the end of the...

Critical Case Comment – Debtor Not Current But May Invoke CARES Remedies

Henry E. Hildebrand, III

March 13, 2022

In order to invoke remedies granted under the CARES Act, Chapter 13 debtor need not have been current on the date of enactment as long as the debtor satisfies the conditions in the CARES Act. (Grabill) In re Gilbert, 622 BR 859 (Bankr. E.D. La. Oct. 6, 2020) Case Summary Chapter 13 Trustee sought dismissal of a number of cases...

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ABI Commission on Consumer Bankruptcy – A Chapter 7 Trustee’s Sale of Encumbered Property

July 7, 2019

By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) The Commission heard from several individuals and attorneys that related tales of Chapter 7 trustees negotiating a “carve out” with a lienholder on the debtor’s real property when there was no equity available in the property. The way this works is that when property came into a Chapter 7...

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A Day in the Life of a Chapter 13 Trustee

May 12, 2019

By Margaret A. Burks, Esq., Chapter 13 Trustee (Cincinnati, OH) I was recently asked to expound on a “Day in the Life of a Chapter 13 Trustee.” Then Regina (Logsdon, Executive Director of ConsiderChapter13.org) asked me to write an article for the Academy. I believe in fate so here goes. Please see ‘Effective Communication Guide.’ It came out about four...

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Complete Termination of The Automatic Stay Under §362(c)(3)(A) According to the First Circuit

March 3, 2019

By Carri Hayden Johnson, Staff Attorney to O. Byron Meredith, Chapter 13 Trustee (Savannah, GA) The filing of a bankruptcy petition acts as a stay of certain actions against the debtor or the debtor’s property. The automatic stay is essentially the fundamental reason that a debtor seeks relief in the form of bankruptcy, as it allows the debtor a brief...

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ABI Commission on Consumer Bankruptcy – Definition of “Tax Return” for Purposes of Nondischargeability

June 2, 2019

By Henry E. Hildebrand, III and Sloan Hastings Section 523(a)(1) excepts from discharge taxes that are priority claims under § 507(a)(8). One of § 507(a)(8)’s provisions makes debts not dischargeable for income taxes requiring the filing of a tax return due during the three years prior to filing bankruptcy. It is this “recent years taxes nondischargeable” moniker that leads many...

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The Student Loan Debacle: Causes & Cures

R. Michael Smith

September 18, 2022

As we observe the growing discussion over the tremendous amount of outstanding student loan debt, several points of clarification might do us well. There are those favoring relief for debtors now unable to pay their student loans. They have proposed various forms of relief, including several forgiveness programs and re-allowing such debts to be discharged in bankruptcy under more usual...

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Ordinary Heroes Deliver Second Chances with Bankruptcy

July 28, 2019

By Robert (Bob) Schuman, Owner/Managing Broker, Network Financial Group I’m a mortgage broker. In that role, I see close up the immense relief that a homeowner feels when they file Chapter 13. They are no longer forced to deal with collection calls and a multitude of letters that are aggressive and intimidating, threatening to take their car, foreclose on their...

Bifurcated Fees Under Examination

The Honorable William Houston Brown

May 22, 2022

Bankruptcy and appellate courts in increasing numbers are considering whether it is appropriate for debtors filing for Chapter 7 relief and attorneys representing them to enter into bifurcated fee agreements. It has been recognized that one of the reasons that debtors may decide to file Chapter 13 rather than Chapter 7 is that attorneys require payment of the Chapter 7...

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Taking Care of Business: Recordkeeping for Small Businesses

May 12, 2019

Small business owners should keep good records. This applies to all businesses, whether they have a couple dozen employees or just a few. Whether they install software or make soft-serve. Whether they cut hair or cut lawns. Keeping good records is an important part of running a successful business. Here are some questions and answers to help business owners understand...