Archived - January 2017 - December 2017

Prompted by recent bankruptcy court decisions, this article reviews the rules under § 1325 and help practitioners understand this arcane area. This week, in Part I, Larry Ahern reviews the underlying rules governing PMSIs in consumer transactions.

¶ 3.1(b) The Telephone

In Abrams v. MiraMed Revenue Grp., LLC (S.D. Ind., 2013) the debtor claimed the debt collector contacted her notwithstanding the collector knew or should have known that the debtor was represented by counsel and violated 15 U.S.C. § 1692c(a)(2).

Click here for a list of Trusteeships which primarily (or not) pay mortgage payments through the trustee’s office – i.e. Conduit

• Eastern District of Michigan: Notice Of Request For Public Comments Regarding Proposed Local Form For Chapter 13 Plans

• Email Subject Line That Tipped Off Feds to Alleged Fraud Scheme

• Rogoff to Bankruptcy Judge: ‘Don’t know, can’t remember, don’t recall, can’t say’
  Background: The Summer of Alice Rogoff’s Discontent

• Bank of America to Pay $6 Million to Bankrupt Couple Evicted From Home

• Student Loan Company Accused of Mismanaging Debt Forgiveness Program

• Growing Student Debt a Danger to Georgia Economy

• Changing Student Loan Payments When You Say ‘I Do’ – Couples need to be transparent about their student debt and develop an action plan, experts say.

• Student Loan Giant Faces Trial Over U.S. Claim It Duped Borrowers

• Editorial: A Better Vision For Student Loans

• 5 Money Problems You Should Never Solve with a Personal Loan

• Is your card debt ever too old to collect?

While a court is precluded from extending the time in which a creditor may file a proof of claim, a court is permitted to extend the time for a debtor or a trustee to file a proof of claim for the creditor.

While a court is precluded from extending the time in which a creditor may file a proof of claim, a court is permitted to extend the time for a debtor or a trustee to file a proof of claim for the creditor.

The Academy extends our deepest sympathy to our friends in the consumer bankruptcy community at Miller Law Group in Charlottesville, VA, where Ms. Heyer was a paralegal.

Click here for follow-up Washington Post article

Preliminary Draft of Proposed Amendments to the Federal Rules of Appellate, Bankruptcy (page 29-53), and Criminal Procedure, the Federal Rules of Evidence, the Rules Governing Section 2254 Cases in the United States District Courts, and the Rules Governing Section 2255 Proceedings for the United States District Courts

• Surprise Dismissal of Bankruptcy Case Seemingly Prompted by Change in Claim Ownership

• Casper Couple Indicted on Bankruptcy Fraud Charges (Chapter 7 case)

• David Vernier Pleads Guilty to Bankruptcy Fraud

• Executive, Escort Indicted as Part of $5.8 Million Scheme (follow-up to previous article)

• ‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone

• Moving Expenses May Be Deductible

• Pro Athletes Prove Why You Should Stick to a Financial Playbook

Spoiler Alert: Borrowers are an expendable resource in home loan servicing only to be exploited for fees and charges.

Spoiler Alert: Borrowers are an expendable resource in home loan servicing only to be exploited for fees and charges.

Bankruptcy courts have the discretion to permit debtors to cure deficiencies in their Chapter 13 plans even if in doing so, the Chapter 13 plan exceeds 60 months from the date of first payment.

Clerk of Court Roanoke, VA
Application Deadline: August 18, 2017

Standing Trustee for the District of New Mexico – Albuquerque
Application Deadline: August 18, 2017

• Guess Who’s Supporting Predatory Lending?

• Rabbit Ears Are Back! Antenna Sales on the Rise as Millennials Are Shocked to Discover Broadcast TV Is FREE

• Free Over-the-Air TV Is Going to Get Better – A new TV standard will support 4K video and mobile devices—but will it still be free?

• IRS Begins Issuing Notices to Taxpayers whose ITINs Expire by End of 2017

• Helpful Tips to Know About Gambling Winnings and Losses

• Best Account Options for Short-Term Savings

“This case involved a Chapter 11 plan. However, debtors can use this case involving Chapter 13 plans when using the cram down provision under §506(a) and argue the secured value of collateral should be based on the proposed use in the plan.”

This case may also be of interest to creditors.

“This case involved a Chapter 11 plan. However, debtors can use this case involving Chapter 13 plans when using the cram down provision under §506(a) and argue the secured value of collateral should be based on the proposed use in the plan.”

This case may also be of interest to creditors.

“What if the debtor wants to avoid a transfer and does not believe his or her concerns are being adequately addressed by the trustee? Can the debtor pursue an avoidance action?”

Clerk of Court Roanoke, VA
Application Deadline: August 18, 2017

Standing Trustee for the District of New Mexico – Albuquerque
Application Deadline: August 18, 2017

Ever heard of the McKinney–Vento Homeless Assistance Act?

“. . . the McKinney-Vento Act also ensures homeless children transportation to and from school free of charge, allowing children to attend their school of origin (last school enrolled or the school they attended when they first became homeless) regardless of what district the family resides in.”

It appears that this provision could apply to families who have recently been forced to move due to foreclosure.

“Subtitle B: Education for Homeless Children and Youth – States that it is the policy of the Congress that State educational agencies shall assure that homeless children have access to free public education, by revising residency requirements as appropriate.”

Bureau Concerned About Companies Misleading Consumers About Pay-By-Phone Fees, Keeping Them in the Dark About Much Cheaper Options

During the summer, some taxpayers may travel because of their involvement with a qualified charity. These traveling taxpayers may be able to lower their taxes.

• Middle District of Alabama – Draft Plan

• Eastern District of Washington – Corrections to New Plan Form

• Brimfield Man Pleads Guilty to Federal Bankruptcy Charges (Chapter 13 case)

• Former Nonprofit Leader Sentenced for Bankruptcy Fraud

• Littleton Couple Guilty Of Tax And Bankruptcy Fraud

Not a typical bankruptcy headline . . .

• Man Killed His Wife, Dumped Body In Pool Then Bought Takeout

Remember this guy . . .

• Federal Prosecutor Against Lindemuth’s Lawyers Dropping Out Of Case

• Kent Lindemuth, Topeka Developer, Wants Postponement Of Bankruptcy Trustee –
  Spouse objects to stay of trustee appointment

• Citi Just Drew ‘Eerily Reminiscent’ Parallel Between Student Loans and the Subprime Mortgage Crisis

• 2017’s States with the Most and Least Student Debt

• Ohio Has Most Student Debt in the Country, Study Shows. Here’s Why

• Devos Abandons Student Loan Servicing Overhaul

Check this out . . . Trustee Burden shares a jewel of a resource. This Quick Reference Guide is a summary of certain changes to the Federal Rules of Bankruptcy Procedure to be effective December 1, 2017.

“Section 522(f) is effective immediately to treat as unsecured a judgment lien held by a creditor, but the full effect of that lien release is not available until the Chapter 13 case completes.”

Check this out . . . Trustee Burden shares a jewel of a resource. This Quick Reference Guide is a summary of certain changes to the Federal Rules of Bankruptcy Procedure to be effective December 1, 2017.

(Not a Chapter 13 but still an interesting story)

• June 2017 Bankruptcy Filings Down 2.8 Percent

• Eastern District of TN: Proposed Local Form Chapter 13 Plan Published for Comments

A possible item for debtor’s attorneys blog or social media

• Taxpayers Should Review Their Withholding; Avoid Having Too Much or Too Little Federal Income Tax Withheld

Click here here for the recently updated list of Trusteeships which are (and are not) primarily pay mortgage payments through the trustee’s office – i.e. Conduit The Northern District of Texas is now conduit.

• Brimfield Man Pleads Guilty To Federal Bankruptcy Charges (Chapter 13 case)

• Family Feud: Mother Uses Bankruptcy to Keep Daughter from Collecting $3.3M Verdict

• Soon Out of Prison, O.J. Simpson Still Handcuffed by Financial Claims

“Many of them now owe more on their medallion loans than they originally paid for the medallions because they used their equity in the medallion for a home, a child’s education or other expenses.”

Are you seeing this in your region? Tell us about it.

• U of M Grads Say Bye to Student Loan Debt

• Mounting Student Loan Debt Mobilizing Bankruptcy Courts (NACTT Seattle Speaker Judge John E. Waites quoted)

A recent case reminds us that courts continue to wrestle with the “correct” name in which filings should be made to perfect liens on personal property.

Information gleaned from questions included on a debtor’s counsel’s questionnaire for a potential client can be protected by the attorney-client privilege and not subject to discovery by an opposing party.

Members of the military may qualify for tax breaks and benefits. Special rules could lower the tax they owe or give them more time to file and pay taxes. In addition, some types of military pay are tax-free.

Click here for the recently updated list of Trusteeships which are (and are not) primarily pay mortgage payments through the trustee’s office – i.e. Conduit

• Former Attorney files for bankruptcy; clients hope audit will help reclaim missing funds

• Bankruptcy judge says disgraced ex-lawyer’s wife on the hook for Jimmy Choos

• Evansville Woman Sentenced in Federal Court for Bankruptcy Fraud Scheme

• Connecticut man charged with threatening U.S. bankruptcy judge

. . . Court considered whether the debtors were eligible for a Chapter 13 discharge despite their failure to remain current on their postpetition mortgage payments. . .

As many of us will be attending the NACTT annual seminar next week in Seattle, a timely article.

Taking notes during seminar presentations is not as easy as jotting something in the margin or highlighting a case on a paper handout, unless you learn the tools available to annotate PDF handouts.

. . . Court considered whether the debtors were eligible for a Chapter 13 discharge despite their failure to remain current on their postpetition mortgage payments. . .

Click here for the recently updated list of Trusteeships which are (and are not) primarily pay mortgage payments through the trustee’s office – i.e. Conduit

• What Corporate Bankruptcy Can Teach Us About Morality

• SD Fla. Bankruptcy Court Refuses to Approve Bankruptcy Plan That Relied on Medical Marijuana Lease Proceeds

See also:

• The Blunt Realities of State Legalization and the Bankruptcy Privilege: In re Arenas, 535 B.R. 845 (10th Cir. BAP (Colo.) 2015)

• Some Federal Student Loans Cancelled in New Jersey

• Americans: Your Credit Score is Going Up

• Why Millions of Consumers’ Credit Scores Will Suddenly Improve – The three major credit bureaus have announced a change that could help consumers

• Prospect Mortgage Fined $4.16 Million for Crisis-Era FHA Lending Violations

What’s left for debtors and trustees to say to a repo man under the FDCPA?

What’s left for debtors and trustees to say to a repo man under the FDCPA?

“After fears of discharge through a Confirmation Order, the second greatest concern of the Department of Education appears to be that this plan is a devious attempt to trick student loan servicers into violating the automatic stay.”

ABI has announced the formation of a Commission on Consumer Bankruptcy. Click here for a list of topics to be examined by the Commission. ABI has also extended an invitation to participate in a Public Meeting to be held July 15 from 4:00 – 5:30 PM during the 2017 NACTT Annual Seminar at the Sheraton Seattle Hotel, Seattle, Washington.

To request a time for a public statement or to submit a written statement, email the Commission at ConsumerCommission@abiworld.org.

Click here for Notice to Participate

Click here to register for the conference.

Attached is an UPDATED chart showing which trustees are and are not conduit trusteeships. Please review the attached list and send The Academy any corrections. Thank you for your assistance.

• Supreme Court to Decide Bankruptcy Test for Recharacterizing Insider Debt Claims

• (Discussion of underlying decision in the court of appeals)
  Recharacterization of Debt as Equity: It’s Substance of Transaction that Matters

• This is What Happens to Your Student Loans When You Die

• Student Loan Servicers Might Give You the Wrong Information About this Federal Benefit

• Paying for College is About to Get More Expensive for Student Loan Borrowers

• NY Paralegal Accused of Stealing $80G in Fake Loan Mods

• CFPB Fines Four California Credit Repair Companies for Misleading Consumers – Companies and executives ordered to pay more than $2 million

• Middle Tennessee Lawyer Now Has 71 Accusations of Cheating, Failing, Stealing from Clients

• Fugitive Lawyer Says He’s Fled US Using Fake Passport

• Former Longtime Funeral Director Admits to Misusing Clients’ Money

• Ex-lawyer Prins Admits to Defrauding Clients

• Man Charged in Loan Modification Case – Whitestone resident charged for allegedly stealing more than $80G

• Can Metro Detroit Consumers Really Afford the Cars They’re Driving?

• Are Car Loans a Slow-Motion Car Crash?

• Most Americans Can’t Afford a New Car, Study Finds

You know you’re about to read an in-depth sanctions opinion when it begins like this: Frustration and disappointment.

“Recently, debt collectors have had reasons to celebrate.”Click here for Part 1

Welcome back Ms. Ps & Qs . . . she brings us a doozy!You know you’re about to read an in-depth sanctions opinion when it begins like this: Frustration and disappointment.

• Former Credit, Prepaid-Card Executive to Lead U.S. Student Loan Program

• CFPB Highlights Complaints About The Public Service Loan Forgiveness Program

• Student Loan Borrowers Face Delays, Bad Information About Loan Forgiveness Program

• How Betsy Devos’ Latest Announcement Could Hurt 68,000 Student Borrowers

• 70% of Millennials Believe U.S. Student Loan Debt Poses Bigger Threat to U.S. Than North Korea

• Pepperell Man Who Fled to Canada on Snowmobile Gets 18 Months in Bankruptcy Fraud Case

• Feds Nab California Man for $7 Million Foreclosure Scam

• Harrisburg Woman Sentenced for Bankruptcy Fraud

• David Vernier Charged with Bankruptcy Fraud

• Van Nuys Man Ordered Detained Pending Trial on Bankruptcy Fraud Charges

In our reoccurring topic “When things Don’t Go According to the Plan,” attorneys Mark Leffler and Emily Connor Kennedy bring us Part 1 of a 2 part article . . .“. . . This expansive language sent shock waves through Chapter 13 practice in the Fourth Circuit. The holding appeared to bar not just the affirmative claims for damages under Rule 7001(1) but any “statutory objection” after confirmation. . . .”

Last month, the Academy presented a discussion by Marsha M. Brown, Staff Attorney to Chapter 13 Trustee Douglas W. Neway, entitled “Withdrawal of Timely Filed Claims…What’s a Trustee to Do?” Now, in two more parts, we back up to ask some related questions.In Part 2, we ask: Why would a debtor or trustee object? Then, to bring the discussion full circle, why would the creditor not want to file a claim or want to withdraw a previously-filed claim? Finally, how is a claim withdrawn?Click here for Part 1 of 2 – Part 1: Why would a creditor file a claim and how? We also will consider how the debtor or trustee would object.

Plain Meaning Rolls On in Gorsuch’s First [Credit Related] OpinionSee also: Supreme Court Unanimously Backs Debt Collector in Gorsuch Opinion

• Subprime Auto Has ‘Credit Issues,’ Top ABS Analyst At BofA Says

• Auto Loans Are Experiencing A Toxic Trifecta – Lengthening loan terms; Rising transaction prices; Falling used-vehicle values

• Lenders Hit the Brakes on Subprime Auto Loans

• Subprime Auto Bonds From 2015 May End Up Worst Ever, Fitch Says

• Cars Whose Leases Are Up Flood The Market, Pushing Prices Down

Either may be a good topic for your blog or other social media communications:

• Watch Out for This Surprise Credit-Card Charge, the CFPB Warns

• Happening across the country . . .Called About Jury Duty? Don’t Fall For This Scam

• Wells Fargo Accused of Adding Years to Modified Mortgages Without Telling Borrowers

• Chapter 7 . . .Judge Orders Bankruptcy Court to Consider Evidence of Trustee and Special Counsel Activity when Considering Request for Sanctions

• Worth repeating . . .Bankruptcy Attorney Steals Millions from Clients Filing for Bankruptcy

• Not bankruptcy related . . .Eric C. Conn, Center of $550M Social Security Fraud, Disappears

A confirmed Chapter 13 plan can substitute for a filed proof of claim and can bind the trustee to making distributions in accordance with that plan when the order recognizes a claim as “allowed.”“ . . . The rules will change on December 1, 2017, specifically recognizing that both secured and unsecured creditors must file proofs of claim in order to ensure that they hold an allowed claim. . . .”

“One of the things that keeps me troubled at night is the preclusive effect of a filed proof of claim.”See Also:Speaking of sleepless nights, if you ever think you’re having a bad day as an attorney – imagine getting the phone call about this little slip up!:GM Creditors’ $1 Billion Fight Hangs on Fixture Definition – Lawyer Filed Wrong Form in 2008, Leading to $1 Billion Dispute

David Moon: Consumer Strength Can Be Misleading (Hmm, what’s a Chapter 10?)

• CFPB Hits Fay Servicing with $1.15 Million Fine For Illegal Foreclosure PracticesServicer Fined for “Keeping Borrowers in the Dark” About Foreclosure Options

• Ex-New Haven Bankruptcy Lawyer From Woodbridge Pleads Guilty to Embezzlement

• Bankruptcy Attorney Steals Millions from Clients Filing for Bankruptcy

• Suspended Lawyer Dies in Custody After Stalking Arrest

“While recognizing the apparent absurdity of the debate, it must be acknowledged that there is a legitimate question of how the structuring of the phrase impacts its meaning within § 1325.”

“After fears of discharge through a Confirmation Order, the second greatest concern of the Department of Education appears to be that this plan is a devious attempt to trick student loan servicers into violating the automatic stay.”

• Trump’s Budget Would Kill a Major Student Loan Forgiveness Program, but Only for New Borrowers

• Here’s How Trump’s New Budget Will Affect Your Student Loans

• Former ITT Tech Students Got Promise Of Help, Then Silence

• Americans Are Paying $38 to Collect $1 of Student Debt – Student loan defaults are a bonanza for the debt collection industry.

• Department of Education Must End Billion-Dollar Student Loan Collection Boondoggle

• Women Hold Nearly 65% of the Country’s $1.3-Trillion in Student Debt

• Republicans Can Seize On A Prime Opportunity To Reform Student Loans

• To Pay Off Student Loan Debt, Michigan Woman Wants To Thank You

• Personal Attacks on Trustee Not Sanctionable – But Not Helpful Either

• Allentown Attorney Sanctioned for Mishandling Bankruptcy Cases

• After Complaints, Fannie Mae Will Stop Selling Homes to Vision Property

• South Bay Man Sentenced to 56 Months For Bankruptcy Fraud

• Ohio Supreme Court Disbars Cincinnati Lawyer Who Impersonated Ex-Colleague – Attorney practiced law with suspended license (Not a bankruptcy case)

• Court Order Shuts Down 11 Debt Settlement Companies – Companies accused of collecting money to settle debts, then keeping it

• Buried Deep Within GOP Bill: A ‘Free Pass’ For Payday And Car-Title Lenders

Click here for the Bill

• How the Affordable Care Act Drove Down Personal Bankruptcy

In this well-written piece, Attorney Moran speaks to non-bankruptcy professionals while also providing the Academy with a tangible resource on the intersection of bankruptcy and divorce.

“The intersection of Bankruptcy and Family Law can be liberating or disruptive, depending on the timing of a bankruptcy filing and the goals of your client. There are an almost infinite number of combinations of timing and facts when these two areas of law collide . . .”

Click here for Part II

• Peake v. Ayobami – Appellant’s brief seeking reversal of Bankruptcy Court decision regarding misapplication of Form 106C.

• Peake v. Ayobami – Reply brief

A note to all taxpayers – Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.

What to Do When an IRS Letter Arrives in the Mail

A Jasper County judge has been appointed to the bench in the United States Bankruptcy Court for the Northern District of Indiana.

• FDCPA Implications of May 15 Supreme Court Ruling on Abusive Bankruptcy Proof of ClaimsBy April Kuehnhoff and Tara Twomey

• From SCOTUS Blog – Opinion Analysis: Justices Approve Filing Stale Claims In Consumer Bankruptcies

• High Court Backs Bids to Collect Outdated Debt in Bankruptcy

Judge Brown brings two cases to our attention this week – one on co-debtor stay and one on standing:

• Co-debtor stay applied only to consumer debt of the debtor

• Debtor’s lacked standing to avoid prepetition foreclosure

• Peake v. Ayobami – Appellant’s brief seeking reversal of Bankruptcy Court decision regarding misapplication of Form 106C.

• Peake v. Ayobami – Reply brief

• The Mortgage Industry’s Next Headache: Website Accessibility Requirements

For Your Blog contains articles, particularly debtor attorneys, might want to use as filler content for website or blog.

• 5 Ways to Maximize Your Social Security Benefits

• The Financial Case for Welcoming Your Adult Children Back Home

• Can’t Pay Your Student Loans? The Government May Come After Your House

• 400,000 were promised student loan forgiveness. Now they are panicking

• Trump May Scrap Obama’s Student Loan Forgiveness Program, Leaked Education Budget Suggests

• Trump Administration Looking To End Student Loan Forgiveness Program

H.R.2366 – Discharge Student Loans in Bankruptcy Act of 2017On 5/4/17 Rep. John Delaney of Maryland cosponsored a short but sweet bill, which if enacted, will do just what the title says.Click here for the text of the bill

• Used-Car Glut Is a Dealer’s Dream, Automakers’ Nightmare

• Wells Fargo to Shrink Auto Loans as Used Car Prices Fall

• Banks Tighten Auto Lending as More Borrowers Fall Into Default

• Weil Gotshal Benchslapped Over Fee Request

• Former Chicago Rush Owner David Staral Gets 3 1/2 Years for Fraud

• St. Louis Judge Orders, Then Stays Arrest Warrant for Bankruptcy Firm Owner and Lawyer

• Wells Fargo Bogus Accounts Balloon To 3.5 Million: Lawyers

• Ex-Judge Admits Taking $609,000 In Bribes In Conn Disability Fraud (this is not a bankruptcy case; however, those of you in East Kentucky could see some of the 1,500 victims/fraudsters)

“Where the debtors’ proof of loss to an insurance company significantly exceeds the amounts and list of property included on the debtors’ Chapter 13 petition, it was appropriate to cancel the entire insurance policy.”

• Former ‘Dance Moms’ Star Abby Lee Miller Sentenced to Jail* for Bankruptcy Fraud*And probation after that!

• Defense Chips Away at Total ‘Dance Moms’ Star Hid from Court

Judge Brown is back – big time – SIX cases involving property of the estate and/or exemptions:

• Tenancy by entirety exemption retained after transfer

• Minnesota’s property tax refund was not exempt as a government assistance based on need

• Conversion from Chapter 7 to 13 triggered new exemption objection period

• Avoidance of judicial lien

• Timing of lien avoidance in Chapter 13

• Debtor’s right of redemption of property sold at tax sale was property of estate

• Farms Exceed Chapter 12 Bankruptcy Debt

• Eleventh Circuit Disappoints on Undue Hardship Issue

• Auto Loan Fraud Soars in a Parallel to the Housing Bubble

• 5th Circuit Upholds Fine for Lawyer Who Refused Judge’s Request for Yes-or-No Answer

• U.S. Bank Fined $15 Million for Bankruptcy Filing Violations

• Update: Kent Lindemuth Indicted on 117 Federal Counts, A Firearms Charge – Bankruptcy judge severs cases of Lindemuth, wife

“What happens when a creditor files a timely, allowed claim, the Trustee commences disbursement on the claim, but the creditor has a change of heart and subsequently withdraws its claim?!?”

Finally, the changes are final: EC-1497. A communication from the Chief Justice of the Supreme Court of the United States, transmitting, pursuant to law, the amendments to the Federal Rules of Bankruptcy Procedure (rules begin on page 4) that have been adopted by the Supreme Court of the United States; to the Committee on the Judiciary. Page S2773From Lexology: New Bankruptcy Rules to Take Effect December 1, 2017

Surveying the Law of EmojisWhile not specific to bankruptcy, this paper is forward looking regarding an issue we will no doubt see in the future even in bankruptcy cases – emojis of all things!

On October 1, 2016, Robert S. Thomas, II, was appointed as the Chapter 13 and Chapter 12 Standing Trustee for the District of Maryland, Baltimore Division with offices in Townson.

• Bankruptcy ‘Safe Harbor’ Protection to Get Supreme Court Review

• Supreme Court Grants Cert on, of all Things, the Standard of Review for Determining Non-Statutory Insider Status

• How the Affordable Care Act Drove Down Personal Bankruptcy

• A Loan Is Not an “Educational Benefit” for Dischargeability Purposes

• Trump Administration Welcomes Back Student Debt Collectors Fired by Obama

• Debt Relief for Kentuckians Attending Corinthian Colleges Inc. (Article could also go under Sanctions and Irony and Fraud category)

• These Massive Shifts Are Killing The Auto Industry’s 7 Years Of Growth

• April Car Sales Plummet: Does that signal a longer-term decline?

Although the facts of the case (not to mention Spanos’ portrayal of same) are somewhat humorous, Attorney Spanos brings a great reminder that even the most ludicrous case demands professional attention.

Although a business case, “Its decision is a primer on bankruptcy jurisdiction at the circuit level, . . .”

• Argument Analysis: Court Dubious About Reading Fair Debt Collection Practices Act to Reach Debt Buyers

• Refinancing Pitches Hit the Mail for Student Debt

• EOUST Sends Reminder Letter on Marijuana Policy in Bankruptcy Cases

See also Academy article from the archives: Weeding Out Marijuana From Bankruptcy Proceedings: The Intersection Between State Laws Legalizing Marijuana and Federal Bankruptcy Law

• Subprime Mortgage Giant Ocwen Rocked by U.S. Suit Claiming Abuse

• Cincinnati Sues ‘Predatory’ Housing Firm

• Utah’s Formerly Fastest-Growing Company Files for Bankruptcy After Federal Raid

• Frederick Pain Management Clinic at Center of Criminal Case Files for Bankruptcy

• Investment Fraudster Gets 12-Years – Federal appeals court affirmed the conviction and sentence . . . on multiple counts of wire fraud, bank fraud, bankruptcy fraud and making false statements on bankruptcy schedules relating to an investment.

• Wife Seeks to Sever Joint Bankruptcy with Husband Kent Lindemuth – Remember this guy?
  • Bankruptcy Trustee Seeks Sale of 2,000-Plus Lindemuth Firearms to Pay Creditors
  • Kent Lindemuth Indicted on Perjury Charge for Allegedly Lying about Money
  • Lindemuth Shoots Intruder Early Friday At Vacant Property
  • Kent Lindemuth Convicted of Felony Criminal Threat to Oklahoma Trucking Company Owner

It is appropriate for the court to extend the scope of the automatic stay to protect wholly owned, nondebtor business entities controlled by the debtor to assist the debtor’s Chapter 13 reorganization by halting the “alter ego” litigation against them.

“Chapter 13 Staff Attorney or Trustee: Your Honor, the trustee moves to deny confirmation based upon the Debtor’s failing to put all of her disposable income into the Plan.”We are pleased to have a short piece from an Academy favorite author, Judge Gustafson. Additionally, just for fun, take a glimpse at another side of Judge Gustafson:Bankruptcy and Naturalization – Two Uniform National Laws With a Fresh Start

“For all of you who stressed, strained, fretted, wheedled, worried, fought, kicked, and even gouged to finally wrest a loan modification from the lender/servicer that controls your client’s home loan, I have a message.The fight may not be over.”Although originally written directed to consumers, this piece is a must-read for all attorneys/staff who work with loan modifications. (Used with permission, originally published by BankruptcySoapbox.com 2017)

• Justices Appear Reluctant to Close Debt Collection Loophole

• Kentucky Among Worst for Student Loan Defaults

• March 2017 Bankruptcy Filings Down 4.7 Percent

“So the question to ask is, does the phrase ‘discriminate with respect to employment’ include hiring .decisions?”

• CFPB Sues Weltman, Weinberg & Reis Over Alleged Collection Tactics

• Report: Complaints Mount Against Medical-Debt Collectors

• Alfaro Declines to Mount Defense in Investor Fraud Trial

“We have a rich history in bankruptcy. The Supreme Court has been an important component in that development.”The conclusion of this series begins with Butner v. US and concludes with Stern v. Marshal.Click here for Part IClick here for Part IIClick here for Part III

• Argument Preview: Court to consider application of Fair Debt Collection Practices Act to debt buyers

• Group: Bankruptcy Judge Shortage Could ‘Cripple’ Delaware

• Judiciary Seeks Bankruptcy Judgeships, Warns of ‘Crisis’

• Loans ‘Designed to Fail’: States Say Navient Preyed on Students

• Voices of Navient’s Borrowers: ‘The Biggest Mistake of My Life’

• Navient Lawsuit: What Student Loan Borrowers Need To Know

• Your Money: How To Keep Student Loan Defaults From Ruining Your Life

• Betsy DeVos Undoes Obama’s Student Loan Protections

• Bankruptcy Bulletin Blamed for Blabbing Bondholders; New York Court Appoints Itself Arbiter of Who is “Legitimate Media”

• Wells Fargo Board Claws Back $28 Million More From Ex-CEO Stumpf

• Former Company Official Sentenced in Clay County Factory Scheme

• Sanford Capital Affiliate Accused of Using Bankruptcy to Avoid Enforcement

As promised back in January, Attorney Whitehead delivers an update including her observations of oral arguments before the California Supreme Court. The Court’s decision will be an interesting one.

“We have a rich history in bankruptcy. The Supreme Court has been an important component in that development.”Part three of this four-part series looks at the next six cases in Attorney Hayes article beginning with Shapiro v. Wilgus.Click here for Part IClick here for Part II

McKinney is not your typical trustee. In half of her life she is in suits complete with hose and heels and in the other half she is in jeans, t-shirts, and cowgirl boots – and not the cute shiny ones – the ones complete with a little manure!

• Teachers, Lawyers and Others Worry About Fate of Student Debt Forgiveness

• Student Debt Giant Navient to Borrowers: You’re on Your Own

Vocabulary Phrase of the Week – “Sharing Economy” what the heck is that?Although the IRS notice doesn’t say so, the Sharing Economy is Airbnb, Uber, Uber Eats, Lyft, Etsy, and Rentcharlie to name a few.Google defines Sharing Economy as an economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet.Now you know.

• Federal Reserve Inconsistent in Monitoring Big Banks: Auditors

• Circuit Court Upholds Punitive Damages Eight Times Compensatory

• Knoxville Car Dealership Scion Confesses Fraud

Perhaps the following items deserve their own category . . .

• Bankruptcy Trustee Seeks Sale of 2,000-Plus Lindemuth Firearms to Pay Creditors

• Kent Lindemuth Indicted on Perjury Charge for Allegedly Lying about Money

These two links are just for your reading ‘pleasure’ . . .

• Lindemuth Shoots Intruder Early Friday At Vacant Property

• Kent Lindemuth Convicted of Felony Criminal Threat to Oklahoma Trucking Company Owner

“We have a rich history in bankruptcy. The Supreme Court has been an important component in that development.”

Part two of this four-part series looks at Dean v. Davis, Chicago Board of Trade v. Johnson, and Cunningham v. Brown.

This is the first of what we expect will become a regular series of comments on statutes and decisions that have consequences beyond the contemplation of the legislators and judges involved.

If you have suggestions for future comments, please send them to the author at LAhern@BrownAhern.com.

“The Supreme Court has now clarified the boundaries of this shortcut to reorganization . . .”

See also:

No Easy Answers for the Supreme Court: Jevic Pits the Bankruptcy Code Against the Law of Unintended Consequences

• Justices Tackle Designation of Bankruptcy Plan Insiders

• Supreme Court Adds Two Cases to Docket

• U.S. Top Court Rejects Bid to Revive $7.25 Billion Credit Card Settlement

• ‘Deep Subprime’ Loans Skyrocket as Americans Keep Buying Cars They Can’t Pay For

• ‘Deep Subprime’ Auto Loans on the Rise, Report Says

• ‘Deep Subprime’ Auto Loans Are Surging

• An Increasing Number of Americans Have Stopped Paying Their Car Loans, and Wall Street Is Starting to Worry

• Santander Unit to Pay $25 Million Over Subprime Auto Loans

• Young Workers Turn to Employers for Student Loan Debt Solutions

• Trump’s Student Loan Default Penalty Has an Unlikely Foe

• BofA Fined $45 M By BK Court

• Citizens Stock Falls After Report That Workers Falsified Appointment Data

• Fake Checkups and Tax Opinions

• Wells Fargo Gets Lower Grade Over Lending Discrimination, Accounts Scandal

• Wells Fargo Reaches $110 Million Fake Accounts Settlement

“We have a rich history in bankruptcy. The Supreme Court has been an important component in that development.”

We begin this four-part series by looking at the common themes which naturally effervesced while looking at the cases; along with an examination of Sturges v. Crowninshield and Hanover Nat. Bank v. Moyses.

Take a look at this new empirical study by Professors Pamela Foohey, Robert M. Lawless, Katherine M. Porter and Deborah Thorne

“This Article exposes the increasingly prevalent phenomenon of debtors paying nothing in attorneys’ fees to file chapter 13.”

A Comparative and Economic Approach

• Goldman Sachs Biggest Buyer of Fannie Mae NPL’s

• Fannie Mae Selling Another $1.68 billion in NPLs to Goldman Sachs Subsidiary, Private Equity – 9,400 Non-Performing Loans Sold Out of Fannie Mae’s Portfolio

• Here’s Why Goldman Sachs is Snatching Up Delinquent Mortgages – Bank Dominates Fannie Mae Non-Performing Loan Sales

• Education Department Rescinds Rule That Stopped Aggressive Student Debt Collectors

• The Latest–And Surprising–Victims of the Student-Loan Debt Crisis: Older Americans

• Use the National Student Loan Data System to Help Keep Track of Your Student Aid

• How We Got to $1 Trillion in Debt: An Illustrated History of Student Loans In America

• Top Ten Adoption Tax Credit Facts to Consider – Taxpayers who have adopted or tried to adopt a child in 2016 may qualify for a tax credit.

• Free Tax Help Available for the Military

• How Student Loan Debt Can Affect Your Tax Return

• Fraudster Gets 15 Years for Bilking 1,000+ Distressed Homeowners in Loan Modification Scheme – Caused More Than $3.5 Million in Losses

“Like many matters we all handle in a bankruptcy context, some we enjoy and some we enjoy… well, a little less. Regardless of the position you have in this area of law – whether you are Debtors’ Counsel, Creditors’ Counsel, a Trustee or a Judge, you likely cringe a little when a Motion to Substitute Collateral comes up.”

The US Trustee Program has announced that Scott Lieske has been appointed as the new Chapter 13 Standing Trustee in Milwaukee, Wisconsin, effective May 1, 2017. Lieske replaces Mary Grossman who is resigning.

Prior to his appointment as Trustee, Mr. Lieske was the Senior Staff Attorney for Russell A. Brown, Chapter 13 Standing Trustee for the District of Arizona, and served in that position for 14 years. Mr. Lieske has been a member of the State Bar of Arizona since 1995. He received his undergraduate degree from Trinity University and his J.D. from Arizona State University School of Law. Prior to joining the Trustee’s office, Mr. Lieske was in private practice handling consumer bankruptcy cases for Doney and Associates. Mr. Lieske is a Master in the Arizona Bankruptcy American Inn of Court and has served as Chairman of the Arizona State Bar’s Unauthorized Practice of Law Advisory Committee.

Bill would implement recommendations from Judicial Conference

See also Academy resource:

“I Surrender” (or Maybe Not) – the Impact of “Surrender” in Post-Discharge Foreclosure Proceedings

• Alabama Payday Lending Amendment Would Cap Interest at 36%

• Payday Loan Interest Rates Would Be Capped Under Ohio Bill

• Bill Proposes Cap To Missouri Payday Loans Interest Rates

• Effort To Rein In Payday Loan Industry In New Mexico Gains Steam

• Mother Had No Legal Duty to Pay Daughter’s College Tuition, Bankruptcy Judge Declares

• More Than 1.1 Million Borrowers Defaulted on Federal Student Loans in 2016

• Student Loan Defaults Rising, Study Finds

• Here’s What Happens to Endowments When Colleges Close

• IRS Opposes Granting of Certiorari in Cases Addressing Definition of Return

U.S. Bankruptcy Courts – Judicial Business 2016Nationwide, debtors filed 805,580 bankruptcy petitions in 2016, 6% fewer than in 2015. The lowest total since 2007, which was the first full fiscal year after BAPCPA was enacted in 2005.

• Nationstar Mortgage to Pay $1.7 Million Over Loan Reporting Flaws: CFPB

• Wells Fargo, RBS, Deutsche Bank in $165 Million NovaStar Settlement

• Companies that Dumped Radioactive Waste in Estill and Greenup Counties File Bankruptcy

A win for creditors . . .

An above-median income Chapter 13 debtor is not permitted to take a mortgage/rent expense deduction when the debtor’s non-filing spouse is the owner of the property and the debtor has no obligation on a mortgage.

In this well-written piece, Attorney Moran speaks to non-bankruptcy professionals while also providing the Academy with a tangible resource on the intersection of bankruptcy and divorce.

“The intersection of Bankruptcy and Family Law can be liberating or disruptive. . .” Part 2 picks up with a discussion of exemptions, continues into avoidance powers, and concludes with discharge issues.

Click here for Part 1

Appellee’s counsel in Metro Government v. Hildebrand and Corrine is Nashville, Tennessee, attorney, Alex Koval of Rothschild & Ausbrooks, PLLC.

New this week:

State Law Applicable Solely to Bankruptcy Is Not Non-Bankruptcy Law

• US Atty: Topeka Developer Hid $1.4 Million in Guns During Bankruptcy

• FL Lawyer Accused in Foreclosure Fraud

• Utah Couple Sentenced for Bank Fraud and Bankruptcy Fraud

“. . . examined whether a chapter 13 debtor who cannot defend a motion to dismiss for non-payment or modify his plan to enable completion, may otherwise strategically exit chapter 13.”

In this well-written piece, Attorney Moran speaks to non-bankruptcy professionals while also providing the Academy with a tangible resource on the intersection of bankruptcy and divorce.

“The intersection of Bankruptcy and Family Law can be liberating or disruptive, depending on the timing of a bankruptcy filing and the goals of your client. There are an almost infinite number of combinations of timing and facts when these two areas of law collide . . .”

• Brewster Resident Named Clerk of Bankruptcy Court

• Navient Charged Student Borrowers Too Much, Says CFPB

• Student Loan Provider Navient Intends to Defend Against Suits Brought By US, Illinois, Washington

• AG Balderas Sues California Lawyers for Scamming NM Homeowners

• Springfield Not-For-Profit Owner Pleads Guilty to Bankruptcy Fraud

• MERS Settlement with Kentucky Attorney General Will Result In $2.8 Million for State

• Judge Raps Pasco Foreclosure Lawyer and His Clients

• Mayor Duggan: Kevyn Orr Hid Pension Plan Details; City May Sue Firm

• Pasco Attorney Constantine Kalogianis Facing Nine Felony Counts Connected To Foreclosure Fraud

• Dance Mom’ Abby Miller Terrified at Thought of Prison in Fraud Case

• Moline Man Charged With Falsifying Bankruptcy Records

• Payday Lender to Pay $40 Million to Georgia Consumers

“Service by mail is a cheaper and more efficient method of service than personal service or service by publication, but it requires attention to detail.”Attorney Lamos brings Academy members another tangible resource. Whether or not you believe you are properly serving “insured depository institutions,” you need to read this article and circulate it to applicable staff members.

And now . . .

Hot off the press: Hank Wins One at the 6th Circuit Court of Appeals

“This bankruptcy case raises questions of statutory interpretation, federal preemption, and equal protection. Mildred Bratt filed a Chapter 13 plan providing for 12% interest on overdue property taxes to which Metro Nashville objected, arguing that Tennessee law specifies 18% interest. The bankruptcy court decided that the state law violated the Supremacy Clause. The State of Tennessee intervened and the parties appealed. The bankruptcy appellate panel (BAP) affirmed use of the 12% interest rate on different grounds, relying instead on interpretation of federal and state statutes and declining to address the constitutional arguments. Likewise, we AFFIRM the bankruptcy court’s approval of a plan using the 12% interest rate based on the language of the statutes at issue.”

• Student Debt in America Has Hit a New Record

• Capital Gains and Losses – 10 Helpful Facts to Know
• Tax Professionals Warned of New Scam to “Unlock” Their Tax Software Accounts
• Retaining Your Tax Records

For Your Clients: Use the “Where’s My Refund?” Tool – Taxpayers can use “Where’s My Refund?” app to check the status. Find it on IRS.gov or the free IRS mobile app IRS2Go.

How often do you hear the word “salacious” in reference to a bankruptcy case? Ohh la la!!! But, alas, the case is actually pretty esoteric.

“The Eleventh Circuit . . . recently offered a reminder of the potential inconvenience of bankruptcy courts’ limited adjudicatory powers. The allegations in the case were salacious—that a law firm hired a bankruptcy judge’s fiancé in a scheme to improperly influence court rulings. But the Eleventh Circuit did not end up expressing any view of these doings because the appeal foundered on procedural grounds.”

The Internet Archive Wants to Host PACER Records from U.S. Courts and Make Them Available . . . FREE (Not password protected)

From our 2/6 weekly email: Lawsuit Challenging PACER Fees Certified as Class Action

Bankruptcy and the U.S. Supreme Court

• Professor Michelle Harner Selected as U.S. Bankruptcy Judge

• Colby High Grad Named U.S. Bankruptcy Judge

• Colorado Bankruptcy Judge Bows Out After 14 Years

• False Promises – California Man Sentenced for Operating Foreclosure Rescue Scheme

• CFPB Orders Prospect Mortgage to Pay $3.5 Million For Improper Mortgage Referrals – Regulator Calls Alleged Activity “Kickback” Scheme

• Hershey Man Indicted on Bankruptcy Fraud Charges

• Agency’s Bankruptcy Dashes Adoption Hopes Across U.S.

• Did Claims of Fraud Make Jobless Go Bankrupt?

• Broken – The human toll of Michigan’s unemployment fraud saga (same issue as above)

“The District Court began its analysis of the issue by examining the plain meaning of the terms ‘surrender’ and ‘vest’ in the context of §§ 1325 and 1322.”

“The Mitchell court set forth the following nonexclusive factors to be considered in determining whether to dismiss a chapter 7 case for bad faith under § 707(b)(3)(A) . . .”

John V. “Jack” LaBarge, Jr., was appointed the Standing Chapter 13 Trustee serving the Eastern District of Missouri in October of 1987. Prior to that, he had been a Chapter 7 Panel Trustee since 1971 – 46 years – WOW. Jack served two terms on the NACTT Board of Directors as an at-large Director. He also served for many years on the Peer Review Committee. Additionally, Jack has mentored multiple new trustees. Jack is a long-time member and supporter of both NACTT and The Academy. He is an institution of service to others and will be leave a gaping hole in these organizations.It is often said that behind every successful man is an equally successful woman. No exception here. Mary LaBarge has served the trusteeship and the consumer bankruptcy community right alongside Jack. She was on the initial Staff Symposia Committee led by Robin Weiner. This Committee developed the concept of nationwide employee training. She developed curriculum and served as facilitator for many years at the beginning of this project and helped set the standard for this valuable training. Even after her retirement from the Staff Symposia Committee she was always willing to step up and fill in any gap when needed.

Mary participated as a panelist multiple times at NACTT annual summer meetings. She developed materials and spoke to upper level trustee staff on such topics as ethics with The Honorable Barry S. Schermer. In addition, Mary served with Alice Whitten and Debbie Langehennig on an NACTT/Academy joint Educational Webinar Training Committee for three years. She participated in the development and/or delivery of at least a half dozen training webinars for which The Academy is eternally grateful.

Not only are we losing the LaBarges this month, but Martha K. “Marty” Hallowell, Deputy Assistant Director for Oversight, Executive Office for United States Trustees, U.S. Department of Justice left us at the end of January. When asked what is next, Ms. Hallowell responded, “play and travel.” Marty, you will be tremendously missed – thank you, Marty, for your hard work and for always being so pleasant.

In discussing future plans with each of these icons, the common theme seemed to be to NOT answer to an alarm clock!

We wish you all the best in a happy and fulfilling retirement.

Bankruptcy Attorney Considers Pro Bono Work a Calling

Thank you Samuel Pennington for making bankruptcy attorneys look good!

• Killing Dodd-Frank Before the Rules Are Even Fully Written

• Memo from a Key Congressman Outlines Plan to Gut Dodd-Frank Bank Rules

“Chapter 13 debtors do not have standing to bring an action to set aside a transfer under §§ 544, 547 or 548 because only the trustee has been given that standing; a trustee cannot be compelled to be an involuntary plaintiff to cure this defect.”

As promised back in January, Attorney Whitehead delivers an update including her observations of oral arguments before the California Supreme Court. The Court’s decision will be an interesting one.

New Judge for Eastern District of Wisconsin

Brett H. Ludwig named U.S. Bankruptcy Court Judge