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Showing 31 posts in 6th Circuit Court of Appeals.

Sixth Circuit Affirms Holding that Contributions to a 401(k) Plan Made More than Six Months Prior to Bankruptcy Cannot be Excluded from Disposable Income

401k File FolderThe U.S. Court of Appeals for the Sixth Circuit recently ruled in a case involving a Chapter 13 debtors’ attempt to shield contributions to a 401(k) retirement account from “projected disposable income,” therefore making such amounts inaccessible to the debtors’ creditors.[1] For the reasons explained below, the Sixth Circuit rejected the debtors’ arguments. Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 13

Sixth Circuit Upholds Chapter 13 Debtor’s Right to Request and Receive Dismissal of Bankruptcy Case

Chapter 13 Bankruptcy Form with GavelA statute must be interpreted and enforced as written, regardless, according to the U.S. Court of Appeals for the Sixth Circuit, “of whether a court likes the results of that application in a particular case.” That legal maxim guided the Sixth Circuit’s reasoning in a recent decision[1] in a case involving a Chapter 13 debtor’s repeated filings and requests for dismissal of his bankruptcy cases in order to avoid foreclosure of his home. Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 13

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

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

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

Supreme Court to Address Circuit Split Regarding Debt Re-Characterization Claims

On June 26, 2017, the Supreme Court granted certiorari in PEM Entities v. Levin to decide whether bankruptcy courts should apply a federal multi-factor test or an underlying state law when deciding whether to re-characterize a debt claim as equity. The Court’s decision to grant cert in this case should resolve a circuit split and clarify the law as it relates to re-characterizing corporate debt as equity. Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 11, U.S. Supreme Court

Reserve it or Lose it: Sixth Circuit BAP Reverses Bankruptcy Court on Issue of Whether Trustee Abandoned Asset in Chapter 7 Case

In a recent decision, the Bankruptcy Appellate Panel of the Sixth Circuit (the “Court”) considered the issue of asset “abandonment” in a Chapter 7 case[1]. The Court reversed the bankruptcy court’s decision to allow the Chapter 7 trustee to compromise a claim that the debtor argued the trustee had abandoned.

[1] In re: Wayne L. Wright, Docket No. 16-8019 (6th Cir. BAP, April 17, 2017). Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 7

Sixth Circuit Affirms Decision to Deny Chapter 7 Debtor’s Proposed Exemption Because She Lacked Equity in Property After a Sale

In the case of Susan G. Brown v. Douglas Ellmann [1], the U.S. Court of Appeals for the Sixth Circuit (the “Sixth Circuit”) recently affirmed a bankruptcy court’s decision to deny a Chapter 7 debtor’s proposed exemptions for the value of redemption rights she enjoyed under Michigan law related to the sale of a property she surrendered to the bankruptcy estate.

[1] Case No. 16-1967 (6th Cir., March 20, 2017). Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 7

Bankruptcy Court Decision to Allow Late-Filed Claim in Chapter 13 Case Reversed on Appeal

Chapter 13 bankruptcy allows debtors to confirm plans that provide for the payment of their debts through future earnings while, at the same time, retaining their assets. If a creditor wishes to receive payments pursuant to a debtor’s plan, the creditor must file a proof of claim. And it must do so timely. Read More ›

Categories: 6th Circuit Court of Appeals, Chapter 13