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Showing 62 posts by Patricia J. Scott.

Sixth Circuit: Creditor did not Violate Chapter 7 Discharge Injunction While Negotiating Release of Lien

FinancesOnce a Chapter 7 debtor receives a discharge of personal debts, creditors are enjoined from taking action to collect, recover, or offset such debts. However, unlike personal debts, liens held by secured creditors “ride through” bankruptcy. The underlying debt secured by the lien may be extinguished, but as long as the lien is valid it survives the bankruptcy. Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 7

Sixth Circuit Rules that Monthly 401(k) Contributions can be Excluded from “Projected Disposable Income” Under a Chapter 13 Plan

Saving for RetirementA Chapter 13 bankruptcy plan requires a debtor to satisfy unsecured debts by paying all “projected disposable income” to unsecured creditors over a five-year period. In a recent case before the U.S. Court of Appeals for the Sixth Circuit (the “Sixth Circuit”), the court grappled with whether a Chapter 13 debtor’s wages that are contributed to an employer-sponsored retirement plan are considered disposable income under the Bankruptcy Code.[1] Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 13

Who is a “Non-Statutory Insider” for Purposes of Determining Whether a Payment Was Preferential in Bankruptcy?

Man at DeskOne of the objectives of the Bankruptcy Code is to ensure that each class of creditors is treated equally. And one of the ways that is accomplished is to allow the debtor’s estate to claw back certain pre-petition payments made to creditors. Accordingly, creditors of a debtor who files for bankruptcy are often unpleasantly surprised to learn that they may be forced to relinquish “preferential” payments they received before the bankruptcy filing. Read More ›

Categories: Chapter 7, Eastern District of Michigan

U.S. Supreme Court Rules that Order Granting or Denying Request for Relief from Automatic Stay is Final Order that is Immediately Appealable

A party who believes that a bankruptcy court erred in either granting or denying relief from the automatic stay needs to act fast to appeal such a decision. In the recently decided case of Ritzen Group, Inc. v. Jackson Masonry, LLC, the U.S. Supreme Court held that: “[A]djudication of a motion for relief from the automatic stay forms a discrete procedural unit within the embracive bankruptcy case” which “yields a final, appealable order when the bankruptcy court unreservedly grants or denies relief.” Read More ›

Categories: Chapter 11, Collections, U.S. Supreme Court

Sixth Circuit Court of Appeals Finds No Breach of Contract or FCRA Violation in Connection with Late Payments Under a Reaffirmation Agreement

In bankruptcy, a debtor must relinquish assets to satisfy debts. But there are exceptions to this general rule. Certain assets may be exempted from a debtor’s bankruptcy under federal and state law. Other assets, which are subject to a contractual loan agreement and the security interest of a lender, may be “reaffirmed” by a debtor pursuant to a reaffirmation agreement. The debtor may keep the asset, such as a house or a car, as long as the debtor enters into a new agreement with the lender that reaffirms the debt according to defined contractual terms, which may or may not track the original loan terms. Read More ›

Categories: 6th Circuit Court of Appeals, Billing/Payment, Chapter 7, Collections

Supreme Court Decides that Law Firms Engaged in Non-Judicial Foreclosure Proceedings are Not Debt Collectors Under the FDCPA

For many, the term “debt collection” calls to mind threatening letters and harassing, late-night phone calls. There’s no doubt that many debt collection practices involve aggressive and unseemly tactics used to collect credit card and other unpaid debts, and, as a result, Congress stepped in to curb these practices by passing the Fair Debt Collection Practices Act (“FDCPA”). Read More ›

Categories: Collections, Financing, U.S. Supreme Court

Chapter 7 Debtors Permitted to Amend Schedules to Claim Homestead Exemption after Successful Avoidance Action by Trustee

The purpose of bankruptcy is to provide for an orderly process by which a debtor’s assets can be fairly divided and distributed among creditors. Read More ›

Categories: Chapter 7, Financing, Personal Property Tax, Property Tax, Western District of Michigan

U.S. Supreme Court Holds that Debtor’s False Oral Statement Concerning Single Asset Does not Provide Basis for Non-dischargeability Action

On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code. Read More ›

Categories: Chapter 7, U.S. Supreme Court

Sixth Circuit Court of Appeals Holds that Penalties Associated with Michigan Unemployment Benefits Fraud are Non-dischargeable in Chapter 13 Bankruptcy Cases

In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit (the “Court”) ruled that penalties assessed by the state of Michigan against two debtors, stemming from fraud associated with the wrongful receipt of Michigan unemployment benefits, are non-dischargeable in Chapter 13 bankruptcy pursuant to Bankruptcy Code § 523(a)(2).1 Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 13

Bankruptcy Court Grants Relief from Stay to Credit Union to Exercise State Law Rights Related to Setoff Against Funds in which the Debtor's Children Hold an Interest

The United States Bankruptcy Court for the Western District of Michigan recently issued an opinion in a case that involved mutual claims between the debtor and a creditor, and lifted the automatic stay to allow a creditor to exercise “setoff” rights provided by state law to recover its debt.1 Read More ›

Categories: Chapter 13