Showing 32 posts in Chapter 13.
Supreme Court Decides Bullard v. Blue Hills Bank and Rules That an Order Denying a Chapter 13 Plan is not Appealable
On May 4, 2015, the U.S. Supreme Court decided Bullard v. Blue Hills Bank, No. 14-116, a case which deals with issues of finality and appealability of orders in bankruptcy proceedings. In a unanimous opinion written by Chief Justice Roberts, the Court held that a bankruptcy court’s order denying confirmation of a Chapter 13 debtor’s proposed repayment plan is not a final order and thus is not immediately appealable. Read More ›
Categories: Chapter 13, U.S. Supreme Court
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Whose Money Is It? Supreme Court Rules for Debtor in Dispute Over Postpetition Wages
When an individual contemplates filing for bankruptcy protection, he or she has a few options. One is to file a Chapter 7 case, and another is to file a Chapter 13 case. In a Chapter 7, all of a debtor’s non-exempt assets are transferred to a bankruptcy estate to be liquidated and distributed to creditors. In a Chapter 13, the debtor retains assets and makes payments to creditors according to a court-approved plan. Read More ›
Categories: Chapter 13, Chapter 7, U.S. Supreme Court
The Borrower in Bankruptcy: Top 10 Mistakes Banks & Lenders Make in Consumer Bankruptcy Cases
Check out this webinar on our YouTube channel to identify common mistakes that lenders make before and during consumer bankruptcy cases – and how to avoid those mistakes to better protect the lender's rights and collateral.
Categories: Chapter 13, Chapter 7, Did you Know?
Act in Good Faith or Else: The Limits of the Automatic Stay
Upon the filing of a bankruptcy petition, an automatic stay goes into effect which provides a debtor with immediate protection from collection efforts by creditors. But the automatic stay is not without limitations.
In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit recently considered whether the automatic stay should apply to prevent a foreclosure sale in a case in which the debtor’s good faith, actions and credibility in filing for Chapter 13 were called into question.[1] The Sixth Circuit ruled against the debtor, affirming the bankruptcy court’s earlier findings that the debtor’s actions were “outrageous.” Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 13
Bankruptcy Court Rules that "One-Size-Fits-All" is Wrong Approach for Evaluating Request for Payment of Attorney's Fees
There has been much discussion in the media in the past year about the massive amount of professional fees that have been wracked up during the City of Detroit's Chapter 9 bankruptcy. There is always great interest - and debate - about such fees due to the nature of the process: insolvent individuals or companies with no place left to turn file for bankruptcy, creditors take a "haircut" on their claims, and the lawyers get paid. Or so the story goes. As with any complex process, though, there is plenty of nuance that gets lost in the wash, and often is more to the story. Read More ›
Categories: Chapter 13, Chapter 7, Western District of Michigan
Sixth Circuit BAP Rules that "Chapter 20" Debtor May Strip Off Valueless Liens
Lien stripping is a process that involves eliminating junior liens (such as a second mortgage) through the bankruptcy process. In a recent appeal to a Sixth Circuit Bankruptcy Appellate Panel ("BAP"), the BAP overturned a bankruptcy court's denial of a Chapter 13 debtor's motion to avoid the lien of an inferior mortgage lien holder. Read More ›
Categories: Chapter 13, Chapter 7
Foster Swift Represents Prevailing Party: Chapter 13 Debtors May Not Exclude Voluntary Post-Petition Retirement Contributions From Disposable Income
In a recent Opinion, Judge Opperman from the Eastern District of Michigan Bankruptcy Court held that a Chapter 13 debtor cannot exclude voluntary post-petition retirement contributions from disposable income. This Opinion is significant for debtors, trustees, and creditors as it systematically changes the way the Eastern District of Michigan will treat post-petition voluntary retirement contributions in a Chapter 13. Read More ›
Categories: Chapter 13, Eastern District of Michigan
In re Seafort, Case No. 10-6248, Sixth Circuit Court of Appeals, February 15, 2012
On an issue of first impression before the Sixth Circuit, the Court held that post-petition income that becomes available after a debtor completes repayment of a 401(k) loan is projected disposable income that must be turned over to the Trustee for distribution to unsecured creditors pursuant to Section 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans.
In this case, both debtors (on consolidated appeal) were making payments to a 401(k) loan, which would be paid off during the life of the Chapter 13 plan. Neither debtor was making contributions to their 401(k) retirement accounts at the time the petitions were filed. The debtors proposed to use the income (available after full repayment of the 401(k) loan) to start making contributions to their 401(k) retirement accounts. The Trustee objected on the issue of whether the debtors must include the income resulting from the payoff of the 401(k) loans to their respective plans considering neither debtor was making 401(k) contributions at the time the petitions were filed. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 13
Changes to the Proof of Claim Form as of December 1, 2011
Effective December 1, 2011, the Federal Rules of Bankruptcy Procedure (FRBP) that govern filing a proof of claim will change dramatically.
FRBP 3001 will be amended to increase the types of information required to be attached to a proof of claim. While Rule 3001 has always required a claimant to produce a writing to support its claim, now a claimant must also attach information relative to the principal, interest, fees, and any other expenses incurred pre-petition - including arrearages. Read More ›
Categories: Chapter 11, Chapter 13, Chapter 7
U.S. Supreme Court: Chapter 13 Debtor Who Does Not Make Loan or Lease Payments Cannot Deduct Vehicle Ownership Expenses
Ransom v FIA Card Services, NA, Supreme Court of the United States, Jan. 11, 2011 (Case No. 09-907).
In the first opinion authored by Justice Elena Kagan, the Supreme Court of the United States held that a Chapter 13 debtor who owns a vehicle outright and thus does not make loan or lease payments cannot include vehicle ownership costs in his or her monthly expenses for purpose of the means test.
Under BAPCPA, debtors in Chapter 13 cases must follow a formula to calculate their disposable income - that is, the amount that the debtor must use to pay creditors under a court-approved Chapter 13 plan. To determine disposable income, the debtor deducts certain "reasonably necessary" expenses from his or her monthly income. Those reasonably necessary expenses, which are outlined in the IRS's "National and Local Standards," include allowances for vehicle ownership and operating costs. Read More ›
Categories: Chapter 13, U.S. Supreme Court
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