Thought for the Day Archive – 2017:
Bankruptcy related insights and information
Hoping everyone has a wonderful Christmas and a great new year
What happens when client wants to reaffirm debt to keep credit reporting but mortgage rejects: got order from Judge McEwen 1) determining debtor complied with §521(a)(6), 2) Chase directed to treat debt as reaffirmed, 3) Chase directed to report debt as through reaffirmed to all 3 credit bureaus, 4) clerk to send order to credit bureaus, and 5) Admin Order FLMB-2015-9 permits lender to refinance or modify mortgages upon debtor’s requires without violation of discharge injunction, and provides that Chase shall not reject such refinancing or modification based on such discharge.
You know the debtor is off to a bad start when the decision starts ‘Before the Court is another one of pro se Debtor’s rambling pleadings having nothing to do with this bankruptcy but demonstrating the prophecy of Yogi Berra that “if you don’t know where you’re going, when you get there you will be lost.”’
In re: KHRISHNA KUMAR AGRAWAL, Debtor., No. 16-11253-JDL, 2017 WL 6403066 (Bankr. W.D. Okla. Dec. 14, 2017)
Judge May disallows $347,490 late filing penalty by IRS in chapter 7 where trustee did not request extension but filed by extension deadline, finding equitable cause to subordinate late filing fee under 11 U.S.C. 510(c)(1).
In re Colony Beach & Tennis Club, Ltd. Debtor., No. 8:09-BK-22611-KRM, 2017 WL 6397719 (Bankr. M.D. Fla. Dec. 13, 2017)
Chapter 13 discharge revoked when creditor showed that debtor had not remained current on mortgage payments being paid outside chapter 13 plan. Fact that there were ‘discussions’ regarding mortgage modification irrelevant absent a modification agreement.
In re: RHEANNA KAY CHANCELLOR, Debtor., No. 11-45924-13, 2017 WL 6371364 (Bankr. W.D. Mo. Dec. 12, 2017)
When you hire a bankruptcy attorney 4 days after you borrow $5900 from a credit union you are likely to have such debt declared nondischargeable.
In re James, No. 17-23577, 2017 WL 6034115, (Bankr. N.D. Ill. Dec. 4, 2017)
Pro se clinic training seminar today 12-1 pm in 5th floor training room. Will do brief summary of what commercial or creditor attorneys should know about representing consumer bankruptcy, including the amended ethics rule, exemptions, and the means test. Also will have a example of a counseling appointment.
Debtor’s undisclosed withdrawals of $4,800 from bank just over a week prior to filing, admitting at 341 she had about $3,500 on date of filing, and that she then spent funds after filing resulted in denial of discharge both for false oath 11 U.S.C. 727(a)(4)(A) and transferring property of the estate 727(a)(2)(B).
In Re STEPHANIE ELAINE SWISHER, Debtor. JEFFREY D. RICHARDSON, Chapter 7 Tr., Plaintiff, v. STEPHANIE ELAINE SWISHER, Defendant., No. 17-70310, 2017 WL 5634594 (Bankr. C.D. Ill. Nov. 22, 2017)
Judge complained that debtor’s attorney failed to make adequate inquiries prior to filing or explain consequences of inaccurate information.
Judge Delano, denying a motion for reconsideration.
Far too often, litigants operate under the assumption, as Appellants do here, that any adverse ruling confers on them a license to move for reconsideration, and utilize such motion as a platform to relitigate issues that have already been decided or otherwise seek a “do over.” Such use of Rule 59 is improper. Indeed, a court’s order is not intended as a mere first draft, subject to revision at the litigant’s whim.
In re: Gary Reed Sligar, Debtor., No. 9:16-BK-08276-FMD, 2017 WL 5256211, at *1 (Bankr. M.D. Fla. Nov. 13, 2017)
11th Circuit reverses District court’s dismissal with prejudice of complaint challenging foreclosure on their Georgia home when bank confirmed foreclosure sale post-petition from chapter 13 without lifting stay. Complaint dismissed by District Court for failure to state a claim, by not stating what interest debtor had in the property, or when the mortgage company acted and how they became aware of the bankruptcy. Plaintiff/debtor had not sought leave to amend the complaint. 11th Circuit found that given plaintiff’s later assertion that they were on the property and property was listed on the schedules, district court should have granted pro se plaintiffs leave to amend complaint.
Goguette v. U.S. Bank Nat’l Ass’n, No. 16-17017, 2017 WL 5192360, at *1 (11th Cir. Nov. 9, 2017)
Judge Funk denies confirmation of a 47 month plan proposing 100% to general unsecured creditors and provided for continued contractual payments on the student loans outside the plan, but appeared to have ceased such payments post-petition and is currently in forbearance. The student loan did not object to the plan.
In re Ryan, No. 3:17-BK-1507-JAF, 2017 WL 5160106, (Bankr. M.D. Fla. Nov. 7, 2017)
Order to show cause against Debtor’s attorney for signing reaffirmation agreement for debtor with no income.
IN RE: ANDREW S. MILLER FABIOLA A. MILLER, Debtors, No. 17-15592 ELF, 2017 WL 4685005 (Bankr. E.D. Pa. Oct. 18, 2017)
How to choose an attorney to represent you?
1. Find an attorney who is experienced in the field of law. I have been practicing consumer bankruptcy law since 1988. Bankruptcy, and bankruptcy appeals is the only area of law I work in. I was a partner at Isaak and Barnett until 1992 when I opened my own firm.
2. Find an attorney recognized for his work in the field. I have been board certified in consumer bankruptcy law ince 1993, by the American Board of Certification. I have written an extensive analysis of the current version of the law which was linked on a national bankruptcy website, and have co-authored a book on bankruptcy appeals.
3. Find an attorney who personally handles the case. At some firms you may see one attorney for the initial meeting then have one or more other attorneys, often with less experience, handling your case. I am the only attorney at the firm, and personally handle every case.
4. Find an attorney who will take the time both to fully understand your situation, and explain your options in language you understand. I schedule each new client appointment for at least an hour, and go over your financial situation in detail. I have a free consultation, so you can meet with me without incurring additional costs.
Bankruptcy is an important decision, as is which attorney you hire to represent you. It may be a good idea to meet with 2 or 3 different attorneys, see which one takes the time to understand you situation and explain your options.
Call today to set a free consultation to discuss your options with us. Main office Tampa 506 N Armenia Ave., Tampa 813 870-3100. Appointments also available 38100 Meridian Ave., Dade City 352 521-0190
Court affirms bankruptcy ruling that arbitration clause inapplicable to student loan dischargeability case as it is a core bankruptcy proceeding. 28 U.S.C. § 157(b)(2)(I).
In re: JANAY L. FARMER, Debtor. NAVIENT SOLUTIONS, LLC, Appellant, v. JANAY L. FARMER, Appellee., No. C17-0764-JCC, 2017 WL 4619209 (W.D. Wash. Oct. 16, 2017)
Creditor continued to debit debtor’s bank post-petition, sanctioned $163.90 for actual damages for debits, $240 lost wages, $88.20 mileage, $6,059.24 attorney fees and costs, and $3,500 punitive damages (misinformed debtor, did not participate in case).
IN RE DANIEL R. WITHAM MINNIE MARIE WITHAM DEBTORS, No. 17-20703, 2017 WL 4570698 (Bankr. E.D. Ky. Oct. 12, 2017).
Post-discharge, and post-foreclosure sale (to HoA) mortgage statements (7 years post chapter 7 discharge, statement of intent to surrender) may be subject of FDCPA suit despite relatively weak language in statement recognizing non liability when it included a payment coupon for $135,960.34. Order denying motion to dismiss. Distinguishing from Helman v. Bank of America, 685 F. App’x 723 (11th Cir. Apr. 12, 2017).
HAYDEE LILLY, Plaintiff, v. BAYVIEW LOAN SERVICING, LLC, Defendant., No. 217CV345FTM99MRM, 2017 WL 4410040 (M.D. Fla. Oct. 4, 2017)
Judge McEwen opinion re post-petition foreclosure sale in pro-se case; denying contempt against Judge (may not have known of bankruptcy at time of sale), but finding that sale was void even if property not disclosed on petition.
In re: Guerda Jocelyn, Debtor., No. 8:17-BK-06140-CPM, 2017 WL 4465023 (Bankr. M.D. Fla. Oct. 5, 2017)
District Court in Middle District of Florida finds Florida Consumer Collection Protection Act (FCCPA) preempted by Fair Credit Reporting Act (FCPA) where allegation is solely the creditor’s reporting of inaccurate information to credit bureau with no other collection efforts. Case involved chapter 7 bankruptcy discharge.
STANLEY ARNOLD, Plaintiff, v. CAPITAL ONE SERVICES, LLC, et al., Defendants. Additional Party Names: Experian Info. Sols., Inc., Trans Union, LLC, No. 8:17-CV-1416-T-33AEP, 2017 WL 4355625 (M.D. Fla. Oct. 2, 2017)
Judge Williamson finds that Rooker-Feldman Doctrine does not require him to follow state court judgment holding lesser amount is owed on debt than was provided for in prior chapter 11 case.
In re: Namal Enterprises, LLC, Debtor., No. 8:16-BK-07190-MGW, 2017 WL 4129618, at *4 (Bankr. M.D. Fla. Sept. 15, 2017).
Rooker Feldman only prohibits federal district courts from exercising appellate jurisdiction over state courts. State court judgment was not final, and thus subject to review by bankruptcy court, since appeal of state court judgement was pending when bankruptcy was filed.
Extending our special: We will file chapter 13 cases for no attorneys fees to be paid prior to filing if it we accept the case, it is a first bankruptcy filing and there is no deadline within 14 days. Call now for a free consultation.
Federal and bankruptcy courts in Tampa closed today and Monday. Our law office will close around noon today and be closed through and including Monday.
District court in Illinois reverses bankruptcy court decision requiring debtor to pay portion of lump sum retroactive social security benefit into plan as condition of confirmation (good faith). The appellate court determined that social security benefits may not be considered in chapter 13 pursuant to 42 USC 407 and the strictures of the means test.
Hoping I don’t have to cite this case often.
In re: SEMCRUDE L.P., et al., Debtors ARROW OIL & GAS, INC., et al v. J. ARON & COMPANY, et al ANSTINE & MUSGROVE, INC; ARROW OIL & GAS INC; BEASLEY OIL COMPANY; BLAKE EXPLORATION LLC; BRADEN-DEEM INC; CALVIN NOAH, d/b/a Calvin Noah Oil Company; CMX INC; CASEY MUSGROVE OIL CO, INC; CENTRAL OPERATING INC; CLARK EXPLORATION COMPANY; CORAL COAST PETROLEUM INC; CRAWLEY PETROLEUM CORP; DC ENERGY INC; D.E. EXPLORATION INC; DAVIS PETROLEUM INC; DAYSTAR PETROLEUM INC; DK OPERATING INC; DOUBLE EAGLE EXPLORATION INC; DRILLERS AND PRODUCERS INC; DUNCAN OIL PROPERTIES INC; FAIRFIELD OIL & GAS CORP; THE GLOCO LLC; GMX RESOURCES INC; GRA EX, LLC; GREAT PLAINS ENERGY, INC; GROUND DEVELOPMENT CO; HERMAN L LOEB, LLC; H.I. INC; J&D INVESTMENTS, LLC; JACK EXPLORATION, INC; KAHAN & ASSOCIATES INC; KEITH F. WALKER OIL & GAS CO., LLC; KINGERY DRILLING CO; KLM EXPLORATION COMPANY INC; LANCE RUFFEL OIL & GAS CORPORATION; LANDMARK RESOURCES INC; LARIO OIL & GAS CO; L&J OIL PROPERTIES, INC; LD DRILLING, INC; LITTLE BEAR RESOURCES, INC; MCCOY PETROLEUM CORPORATION; MCGINESS OIL COMPANY OF KANSAS; MESA EXPLORATION COMPANY, INC; MID-CONTINENT ENERGY CORPORATION; MOLITOR OIL, INC; MULL DRILLING COMPANY, INC; MURFIN DRILLING COMPANY, INC; MUSGROVE ENERGY INC; MUSTANG FUEL CORP; NYTEX ENERGY LLC; OIL COMPANY OF AMERICA INC; OKLAHOMA OIL & GAS MANAGEMENT INC; PICKRELL DRILLING COMPANY, INC; PROLIFIC RESOURCES, LLC; RAMA OPERATING COMPANY, INC; RANDON PRODUCTION COMPANY INC; RED OAK ENERGY INC; RITCHIE EXPLORATION INC; RJ SPERRY CO; ROSS HOENER, INC; SEEKER, LLC; SHORT & SHORT, LLC; SNYDER PARTNERS; STEPHENS & JOHNSON OPERATING CO; TEMPEST ENERGY RESOURCES LP; TEX-OK ENERGY LIMITED PARTNERSHIP; TGT PETROLEUM CORPORATION; THREE-D RESOURCES, INC; THOROUGHBRED ASSOCIATES, LLC; TRIPLEDEE DRILLING CO., LLC; TRIPOWER RESOURCES, LLC; VIKING RESOURCES, INC; V.J.I. NATURAL RESOURCES INC; VEENKER RESOURCES, INC; VESS OIL CORPORATION; VINCENT OIL CORPORATION; W.D. SHORT OIL COMPANY, LLC; WELLCO ENERGY, INC; WELLSTAR CORPORATION; WHITE EXPLORATION INC; WHITE PINE PETROLEUM CORPORATION, Appellants In re: SEMCRUDE L.P., et al., Debtors BP OIL SUPPLY COMPANY, No. 15-3094, 2017 WL 3045889 (3d Cir. July 19, 2017)
Interesting case on the Rooker-Feldman doctrine: In re Isaacs, No. 16-8041, 2017 WL 2838101 (B.A.P. 6th Cir. July 3, 2017). Debtor got a 2nd mortgage, did not realize it had not been recorded. Filed chapter 7, discharged the debt, then mortgage recorded 3 months after chapter 7 filed without lifting automatic stay. In August 2014 successor filed foreclosure and obtained state court order determining that mortgage was valid. Just prior to sale Debtor filed chapter 13 and sought to avoid mortgage.
Court denied motion, asserting that Rooker-Feldman prohibits attempt to reverse state court decision absent assertion of a new independent claim. Since mortgage was valid against debtor when original chapter 7 was filed, there was no new claim asserted to challenge state court judgment.
Order on Order to Show Cause to Bank of America by Judge McEwen: Requiring following procedures for debtors in bankruptcy 1) to minimize possibility of human error in data entry when bankruptcy requires modification of interest rate, maturity or other terms of loan; 2) to correct human error for debtors in bankruptcy including making inquiry when it receives payments in an amount different from the original contract; 3) Notice to debtors of intent to reject and of why it is rejecting payments it perceives as insufficient.
In re: Martin Northrop & Andrea Northrop, Debtors., No. 8:10-BK-24705-CPM, 2017 WL 2799848 (Bankr. M.D. Fla. June 27, 2017)
11th Circuit rules that in determining value given to a debtor for §548 Reasonable Equivalent Value – test is objective value of the benefit received rather than the subjective value to the debtor; reversing finding for chapter 7 trustee where rent paid to debtor for portion of home was reasonable but allegedly part of a scheme to defraud creditors.
In Re: CARIBBEAN FUELS AMERICA, INC, Debtor. JONATHAN MCHENRY, Plaintiff – Appellant, v. DREW M. DILLWORTH, Defendant – Appellee., No. 16-15786, 2017 WL 2703541, at *1 (11th Cir. June 22, 2017)
Always try to negotiate reaffirmations with car lenders. We had a request for reaffirmation from Alaska Credit Union for $23,684 on a car worth about $12,000-15,000. After getting a deal with 722 Redemption Funding at 24%, Alaska CU offered a reaffirmation at $12,825 at 3.99% over 48 months.
Judge McEwen sanctions Greentree for not verifying value of property in reaffirmation agreement (instead just using the loan balance as the value). In re Velazquez, 8:15-bk-01712-CPM, 5/17/17. Debtor’s counsel should be cautioned same issue could arise against them if reaffirmation on house or cars are not modified to show actual value. Car reaffirmations often assert unrealistic values of the vehicles.
Injunction issued by Southern District of Florida court against debt relief agency, going under many names, alleging fraud against consumers. Names include Financial Freedom National, Institute for Financial Freedom, 321 Loans, Instahelp America, Inc., Helping America Group, United Financial Support, Breeze Financial Solutions, 321Financial Education, Credit Health Plan, Credit Specialists of America, American Advocacy Alliance, and many others.
Amendment of plan post-confirmation under §1329(a) does not require strict application of best interest test of §1325(b)(a)(B), and debtors do not need to demonstrate that all their projected disposable income is devoted to making plan payments under the modified plan. In re Sunahara, 326 B.R. 768 (9th Cir. BAP, 2005).
Sanctions against DiTech for continuing to assert mortgage arrearage after order determining debtors were current, including $10,000 to debtor for continued dealing with DiTech representatives attempting to resolve the issue, documenting receipts, and attendance at court; $9,500 debtor’s attorney’s fee; and $10,000 to the clerk of the bankruptcy court for failure to abide by the order determining the mortgage was current.
IN RE: THOMAS MANSFIELD GREENE DEBTOR, No. 10-06466-8-DMW, 2017 WL 1628870 (Bankr. E.D.N.C. Apr. 28, 2017)
At the last chapter 13 seminar an attorney compared the 10% trustee fee to charging an additional 10% interest on what is paid in the plan. This is a common misconception, as since the trustee takes 10% out of each payment made to them, that sounds like interest. But it doesn’t work out that way. As they say on the Big Bang Theory: lets do the math.
Take a simple case: if the trustee pays out $6,000 in a case, the payment out from the trustee would be $100/month for 60 months. Adding the trustee fee to that $100/month results in a monthly payment of $111.11/month. Run an amortization analysis on what interest rate you are paying on $111/month for 60 months on a $6,000 debt and you come up with a 4.37% interest rate. A 10% interest rate on $6,000 over 60 months would require $126.43/month.
What debtor attorneys need to ask is whether it cheaper to pay a debt in bankruptcy at the standard bankruptcy interest rate than to pay outside bankruptcy. I am still using 5.25% as the interest rate to secured creditors, though one attorney at the seminar believed 5.5% would be the standard rate now. At 5.25% on a $6,000 balance, the amortization would be $113.42/month for 60 months, or $126.02 with the trustee fee, for an amortized total rate of 9.86%. At 5.5% the payments increase to $126.76 including the trustee fee for an amortized interest rate of 10.12%
While the composite interest rate including the trustee fee is not the only consideration in determining whether it is beneficial to pay a secured claim in the plan, counsel should at least be aware of what the real composite rate is to make a fair comparison.
Case finds that in chapter 13, where debtor gives up all interest in real estate surrendering it to mortgage, homeowners assessments, even if running with the land, are no longer personal liability of debtor.
In re Hovious, No. 10-03917-JMC-13, 2017 WL 627370, at *4 (Bankr. S.D. Ind. Feb. 15, 2017); citing In re Heflin, No. 09–18642–SSM, 2010 WL 1417776 (Bankr. E.D. Va. Apr. 1, 2010) and In re Colon, 465 B.R. 657 (Bankr. D. Utah 2011).
Where a debtor pro-rates his refund in his current monthly income on the means test and on schedule I, it is not required that the tax refund also be turned over to the trustee each year. In re Gibson, 2017 WL 972082 (Bankr. N.D. Ill., March 13, 2017).
Judge Glenn allows stripping of 2nd mortgage in chapter 20 filed by wife when mortgage was initially joint but property quit-claimed to her per divorce order.
In re: Lavette S. Bailey, Debtor. Lavette S. Bailey, Plaintiff, v. Deutsche Bank Nat’l Trust Co., as Tr. for Ameriquest Mortg. Sec., Inc., Asset-Backed Pass-Through Certificates, Series 2005-R11 Defendant., No. 3:16-AP-125-PMG, 2017 WL 587980 (Bankr. M.D. Fla. Feb. 13, 2017)
Judge Williamson rules that car towing and storage company (Collateral Bankruptcy Services) violated §362(a)(3) by maintaining possession of vehicle delivered to them pre-petition rather than delivering vehicle to chapter 7 trustee as required by §542(a); however court allowed them to enforce lien for pre-petition storage fees.
In re: Stefan Kaschkadayev, Debtor., No. 8:16-BK-10041-MGW, 2017 WL 587982 (Bankr. M.D. Fla. Feb. 14, 2017)
Counsel for debtor sanctioned on signing reaffirmation agreement, court complained not only of not meeting with client, but also of not explaining in detail reduction of expenses making agreement feasible and not negotiating with creditor. Duties of counsel set out.
Possibly underused statute: §1322(f): A plan may not materially alter the terms of a loan described in §362(b)(19) [401k type loans], and any amounts required to repay such loans shall not constitute “disposable income” under §1325.
Complaint alleges Navient misapplied payments, told borrowers they had to make higher payments than required, failed to notify borrowers regarding rights to lower their payments, deceived borrowers regarding release of co-borrowers, and misreported discharged student loans (under disability discharges) as defaults on credit reports.
Judge Colton rules that when creditor files an unsecured claim, it cannot successfully challenge a request to avoid the lien after chapter 13 payments are completed. In re Barrera, No. 8:10-BK-26730-RCT, 2016 WL 6990876 (Bankr. M.D. Fla. Nov. 29, 2016)