Debtors Chapter 7

News & Analysis as of

US Supreme Court Decision in Bank of America, N.A. v. Caulkett

In a 9-0 decision released on June 1, 2015, the US Supreme Court ruled, in Bank of America, N.A. v. Caulkett, 135 S. Ct. 1995 (2015), that a debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien...more

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

Bankruptcy Beat: Bankruptcy Court Finds Debt To Third Party To Be A Non-Dischargable Debt Incurred In Connection With a Divorce

Bankruptcy Judge Albert Dabrowski was faced with a unique set of circumstances arising as a result of the intersection of a state court divorce action and a Chapter 7 bankruptcy case. In the matter of Corrine Sawyer v. Scott...more

Debt Free in 2016? Now is the Time to File Your Bankruptcy

It is hard to believe we are getting ready to head into the July 4th weekend! 2015 is almost half-way over and I have started to plan out the remainder of the year andit is crazy to think if you are thinking of filing...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

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

The Supreme Court Continues Stability In The Secondary Mortgage Market

On Monday, the Supreme Court reaffirmed the principle that junior “underwater” residential mortgage liens can “pass through” a bankruptcy case unaffected. In Bank of America, N.A. v. Caulkett, the Supreme Court held...more

The Supreme Court Prohibits Chapter 7 Debtors From Stripping Off Wholly Underwater Liens in Bankruptcy

On June 1, 2015, the United States Supreme Court in Bank of America, N.A. v. Caulkett, 575 U.S. ____ (2015), unanimously held that a Chapter 7 debtor cannot strip off wholly “underwater” liens secured by the debtor’s...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

With my income, I'll have to file a Chapter 13 bankruptcy and pay all my debts. Wrong (probably)!

The truth about this is not simple. Let's take a look at it. If you make "too much" money, you might not be able to do a Chapter 7 bankruptcy, the one that gets rid of your debts quickly. The usual alternative is a Chapter 13...more

Creditor's Willful Violation of Automatic Stay Results in Fee Award

In Snowden v. Check Into Cash of Washington Inc. (In re Snowden), 2014 DJDAR 12677, the United States Court of Appeals for the Ninth Circuit decided a bankruptcy case involving the award of attorney fees....more

Supreme Court Update: Warger V. Shauers (13-517), Integrity Staffing Solutions V. Busk (13-433) And Order List

We're back with summaries of the first signed decisions of the term, Warger v. Shauers (13-517) on whether Federal Rule of Evidence 606(b) precludes juror testimony during a proceeding in which a party seeks to secure a new...more

Ninth Circuit: Banks Can Freeze Chapter 7 Debtors’ Accounts

Banks have long taken comfort in knowing that if one of their customers files for bankruptcy, the bank can freeze the debtor’s account to preserve the bank’s ability to assert a setoff against the account where the bank has a...more

July 2014: Bankruptcy and Restructuring Update

Intellectual Property Licenses in Bankruptcy—Uncertainties Remain Following the Eighth Circuit’s En Banc Decision in Interstate Bakeries. The bankruptcy of a party to an intellectual property license presents serious...more

In re Brown: Replacement Value Applies Even When Debtor Surrenders Property

The recent Eleventh Circuit case of In re Brown, 746 F.3d 1236 (2014) held that 11 U.S.C. § 506(a)(2)'s replacement value standard applies even when a Chapter 7 or 13 debtor surrenders collateral under 11 U.S.C. §...more

Hold That ReFi! A Reason to Think Twice Before Entering Post-Petition Agreements with Discharged Debtors

After months of phone calls, loan modifications and discussions with borrowers, one finally receives the dreaded bankruptcy notice in the mail. A chapter 7, no-asset case, with the loan listed on the bankruptcy schedules as a...more

Lenders' risk: Who really owns the collateral?

Unlike real estate transactions where a lender can obtain title insurance, secured lenders are often relying upon the representations and warranties in their loan agreement and the borrower’s audited financial statements, if...more

Bankruptcy: Preference Defendants Don’t Feel “Preferred”

This year, many unsuspecting businesses will be hauled into court by a trustee seeking return of a “preferential” payment made by a party now in bankruptcy. To those uninitiated, a bankruptcy trustee’s power to “avoid” or...more

Not All Property Acquired Post-Petition is Safe from Creditors

Although property obtained by a debtor after filing for bankruptcy is usually safe from creditors, a recent case from the Ninth Circuit Bankruptcy Appellate Panel allowed a Chapter 7 Trustee to sell real property obtained by...more

Closing the Chapter 7 Loophole for High Income Debtors

Heralded by debtor’s attorneys as “a wonderful loophole”1 in the Bankruptcy Code, a debtor who has primarily business, rather than consumer, debts can qualify for a speedy Chapter 7 discharge despite a high earning capacity...more

Is this your "Window of Opportunity" for bankruptcy?

Bankruptcy as an opportunity? And a "window" for it? What's that about? It's about the fact that our Congress gave all of us the opportunity for a Fresh Start from burdensome debts. And yes, for many people there is a...more

Chapter 20 in the Eleventh Circuit: Modification of Secured Claims Impermissible Without Discharge

Nearly a year ago to the day, we published a post regarding the uncertainty that bankruptcy practitioners and lenders faced when a Chapter 7 debtor received a discharge, and subsequently filed a Chapter 13 petition to strip...more

Rogers Towers: Dismissal for Failure to Prosecute: Debtor’s Bankruptcy Appeal Tossed for Delay by Eleventh Circuit

As creditors’ counsel, we have often faced debtors who file bankruptcy simply to delay and frustrate the collection process. A recent case out of the Eleventh Circuit typifies the no-nonsense attitude that bankruptcy and...more

The Benefit of a Bankruptcy Sherpa

If you are like most of the people I meet with, making the decision to file for bankruptcy was a heart-wrenching, exhausting process. You didn’t take the decision lightly and would have preferred to avoid it all together. ...more

Bankruptcy Courts In Georgia And Florida Show Obedience To Eleventh Circuit Court Of Appeals And Reluctantly Begin To Allow Lien...

Three bankruptcy courts within the Eleventh Circuit have recently issued opinions in which they have reluctantly allowed the debtor to entirely strip off the interests held by junior lienholders when the value of the real...more

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