Chapter 13

News & Analysis as of

Stripping Off Junior Mortgages Now Barred in Chapter 7 Bankruptcy Cases

The Supreme Court has unanimously decided that debtors are prohibited from stripping off junior mortgage liens in Chapter 7 bankruptcy cases. Lien stripping is where a bankruptcy court relieves a debtor of his second mortgage...more

Recording Errors: A Typo Is Not Always Fatal

Deirdra Renee Gause v. Citifinancial Services, Inc. (In re Deirdra Renee Gause), 525 B.R. 35 (Bankr. M.D. N.C. 2014) – A chapter 13 debtor sought a court determination that a mortgage loan was unsecured because there was...more

Recent Unanimous Supreme Court Decision Holds That Underwater Mortgages in a Chapter 7 Cannot be “Stripped off"

The Issue and Background - Debtors David Caulkett and Edelmiro Toledo-Cardona (“Debtors”) each filed for Chapter 7 bankruptcy relief with “underwater” junior mortgages held by Bank of America, N.A. (“Bank”). In other...more

4 Reasons Bankruptcy Might Be a Very Bad Idea

For some filing for bankruptcy will not only bring a lot of much needed relief it is actually a smart financial step. Bankruptcy can clear away a lot of debt and truly provide a fresh start. However there are situations where...more

SCOTUS: Debtor Entitled to Chapter 13 Conversion Leftovers

The U.S. Supreme Court has resolved a circuit split by answering the question; what happens to post-petition wages held by a Chapter 13 trustee at the time a case is converted from Chapter 13 to a Chapter 7? In a unanimous...more

United States Supreme Court Holds that Order Denying Plan Confirmation Is Not Immediately Appealable

On May 4, 2015, the Supreme Court for the United States unanimously held that an order denying confirmation of a plan is not a “final” order subject to immediate appeal as a matter of right. Although the Bullard decision...more

U.S. Supreme Court Holds that Out of the Money Mortgages Cannot be Stripped Off in Chapter 7 Bankruptcy Cases

The U.S. Supreme Court held that a secured creditor in a chapter 7 bankruptcy case is protected from having its lien “stripped off” even if the collateral securing its claim is worth less than the claims asserted by a senior...more

Three Recent Supreme Court Rulings Will Impact Lenders and Investors

Three significant opinions issued by the US Supreme Court in the last few months will impact lenders and investors. Bank of America v. Caulkett - In a major win for the nation’s mortgage lenders and...more

“Deed in Lieu”: Deed That Is Not Really In Lieu Of Foreclosure Will Likely Not Be Treated As a Deed

In re Primes, 518 B.R. 466 (Bankr. N.D. Ill. 2014) – A mortgagee moved for relief from the automatic stay, arguing that it acquired title to property prior to the bankruptcy under a quit claim deed given to it by the...more

Bankruptcy Blog Re: Debtor’s Funds When Case Is Converted From Chapter 13 To Chapter 7

The Supreme Court of the United States was recently asked whether, when a debtor in good faith converts a bankruptcy case to Chapter 7 after confirmation of a Chapter 13 plan, undistributed funds held by the Chapter 13...more

Chapter 7 Debtors Cannot Strip Off Junior Liens on Underwater Home Loans, United States Supreme Court Rules

Yesterday, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by...more

The 1099-C Issue: Potential Tax Liability in Debt Settlement and Bankruptcy

When you owe debts that you cannot pay most will look to one of two options – debt settlement or bankruptcy. What many don’t realize is that in some circumstances there is the potential for additional tax liability even if...more

Confusion Surrounds the Fair Debt Collection Practices Act

The United States Supreme Court recently declined to review Crawford v. LVNV Funding, LLC, 758 F.3d 1254, 1257 (11th Cir. 2014) cert. denied, No. 14-858, 2015 WL 246891 (U.S. Apr. 20, 2015), an Eleventh Circuit decision that...more

Seventh Circuit Says Secured Creditors Must File Proof of Claim Within Ninety Days of Meeting of Creditors

Timely proof of claim filings by secured creditors have “been a thorn in the side of many Chapter 13 cases involving secured creditors,” according to Judge Wood in In re Pajian. However, a recent Seventh Circuit decision may...more

Supreme Court Holds That Orders Denying Plan Confirmation Are Not Final for Appellate Purposes

On May 4, 2015, a unanimous United States Supreme Court in Bullard v. Blue Hills, 135 S. Ct. 1686 (2015), resolved a long-standing circuit court split by holding that a bankruptcy court’s order denying confirmation of a...more

Supreme Court Decides Harris v. Viegelahn

On May 18, 2015, the U.S. Supreme Court decided Harris v. Viegelahn, No. 14-400, holding that when a debtor in bankruptcy converts from a Chapter 13 payment plan to Chapter 7 liquidation, any of the debtor’s post-petition...more

Supreme Court Bankruptcy Decision Strengthens Creditor Leverage in Plan Negotiations

On May 4, 2015, in the case Bullard v. Blue Hills Bank, the United States Supreme Court held that debtors in chapter 13 (and presumably chapter 9 and 11 as well) are not entitled as of right to immediately appeal bankruptcy...more

Watt Final Order

AIKEN, Chief Judge: Bank of New York Mellon, as trustee for certificate holders of the CWALT, Inc., alternative loan trust 2006-0A21, mortgage pass-through certificates series 2006-0A21 ("BNYM"), appeals the...more

Supreme Court Decides Bullard v. Blue Hills Bank

On May 4, 2015, the U.S. Supreme Court decided Bullard v. Blue Hills Bank, No. 14-116, holding that a bankruptcy court’s order denying confirmation of a Chapter 13 debtor’s proposed repayment plan is not a final order and...more

Debtors’ Ability to Appeal Denial of Plan Confirmation is Limited by New Supreme Court Decision

On May 4, 2015, the Supreme Court issued its opinion in Bullard v. Blue Hills Bank, holding that an order denying confirmation of the debtor’s proposed chapter 13 plan is not a “final” order that the debtor can immediately...more

Have You Noticed Your Payment Change? Advisory Rules Committee Proposes Amendments to Bankruptcy Rule 3002.1

The Judicial Conference Advisory Committee on Bankruptcy Rules (the “Advisory Committee”) recently published proposed amendments to the Bankruptcy Rules, including Bankruptcy Rule 3002.1, which requires a secured creditor to...more

Bankruptcy Beat: The Automatic Stay Does Not Preclude A Foreclosure Committee From Seeking Fees From A Non-Debtor Party In A...

On January 5, 2015, the Honorable Albert S. Dabrowski issued a decision concerning the applicability of the automatic stay of Bankruptcy Code Section 362(a) (the “Automatic Stay”), which decision highlights and clarifies...more

Third Circuit refuses to permit Debtor Lessor to Reject an Oil and Gas Lease

The Court of Appeals for the Third Circuit confirmed that the Pennsylvania Landlord and Tenant Act is inapplicable to an agreement by a landowner authorizing the “lessee” to extract oil and gas lying beneath the property's...more

HOA dues still pile up after filing bankruptcy. What to do?

If you own a condo and pay HOA dues, filing bankruptcy eliminates back HOA dues incurred before filing, but not those dues charged after filing. What to do?...more

I owe too much money to file bankruptcy. Wrong!

Why do some people think this is true? After all, you read about large corporations that owe many millions filing bankruptcy. Whatever the reason, it's just not true. Let's take a look as what is true...more

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