Dischargeable Debts

News & Analysis as of

Court Grants Student Loan Debt Relief to a Graduate of a Non-Accredited Medical School

On April 4, 2016, the U.S. Bankruptcy Court for the Eastern District of New York issued a decision that may significantly change the landscape of student debt relief. In re Decena, No. 15-72903, 2016 WL 1371031 (Bankr....more

Supreme Court Expands Fraud Exception to Favor Creditors

On May 16, 2016 the United States Supreme Court issued an opinion regarding the meaning of “actual fraud” under the Bankruptcy Code. Husky Int’l Electronics, Inc. v. Ritz represents a win for creditors by making it easier to...more

Supreme Court: Fraudulent Conveyance Scheme Renders Debt Nondischargeable in Bankruptcy

On May 16, 2016, the U.S. Supreme Court issued its opinion in Husky International Electronic, Inc. v. Ritz. The opinion is a favorable development for creditors because it expands the types of fraudulent conduct that can...more

High Court Rejects Narrow Bankruptcy Fraud Exemption

In its recently issued decision in Husky International Electronics, Inc. v. Ritz, a 7-1 majority of the Supreme Court has clarified that intentionally fraudulent transfers designed to hinder or defraud creditors can fall...more

Supreme Court Issues Opinions Favorable to Financial Services Companies

May is usually a busy month on the Supreme Court before the justices head off for some summer R&R. It is historically a time when many opinions are issued, and May 2016 has been no exception. ...more

High Court Broadens the Definition of “Actual Fraud” under Section 523(a)(2)(A)

The Supreme Court’s Decision: On May 16, 2016, in Husky International Electronics, Inc. v. Daniel Lee Ritz, Jr., Case No. 15-145, the Supreme Court held that the term “actual fraud” in § 523(a)(2)(A) of the Bankruptcy...more

Supreme Court Rules Exception to Bankruptcy Discharge for Fraud Claims Extends to Fraudulent Transfer Liability

In a decision rendered on May 16, 2016, in the case of Husky International Electronics, Inc. v. Ritz, the U.S. Supreme Court ruled that the exception to bankruptcy discharge for debts incurred through actual fraud applies to...more

Supreme Court Decides Husky International Electronics, Inc. v. Ritz

On May 16, 2016, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz (No. 15-145), holding that the term “actual fraud” in § 523(a)(2)(A) of the Bankruptcy Code (one of the discharge exceptions)...more

Ritz Might Give Fraudulent Conveyance Transferees Fits

The United States Supreme Court clarified in Husky Int’l Electronics, Inc. v. Ritz, 578 U.S.(2016) that “actual fraud” as used in Section 523(a)(2)(A) is broad enough to encompass fraudulent conveyance schemes and does not...more

Breach of Fiduciary Duty Judgment May Be Dischargeable In Bankruptcy

It is not uncommon for a successful plaintiff in a breach of fiduciary duty case to have their collection efforts thwarted by a defendant filing for bankruptcy. The issue is whether the state court judgment is dischargeable...more

2nd Circuit Rules Bankruptcy Code Does Not Preclude FDCPA Suit in District Court

In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit Court of Appeals examined whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt...more

Lack of Reaffirmation Agreement Results in Finding That Bank Violated Discharge Injunction by Enforcing Post-Bankruptcy Loan...

In Venture Bank v. Lapides, 800 F.3d 442 (8th Cir. 2015), the Eighth Circuit found that a bank could not recover from its borrower and, in fact, had violated the post-discharge injunction by relying on change in terms...more

Revisiting the Post-Bankruptcy Toolbox: Don’t Forget to Compare the Financials

For better or worse, lenders have become increasingly familiar with the strange dynamic that is the post-bankruptcy minefield created by their borrowers filing a bankruptcy petition. Immediately, lenders begin thinking about...more

Community Banking Excellence -Fourth Quarter 2015

In This Issue: - Looking Back, Looking Forward: A 2015 Retrospective and 2016 Predictions: This past year has seen many changes in the community banking industry. Some of these issues we expected and some had more...more

Flurry of FCRA Complaints Recently Filed in Nevada Courts

Approximately 50 cases have been filed recently in Nevada state and federal courts against furnishers of information and credit reporting agencies (CRAs) for alleged Fair Credit Reporting Act (FCRA) violations. It appears...more

New York Appellate Court Confers Standing on Assignee of Note Previously Discharged in Bankruptcy

A mortgage lender has standing to foreclose even when it obtains assignment of the underlying promissory note after the note has been discharged in bankruptcy, a New York appellate court has ruled. The case arose after the...more

50 Cent Files for Bankruptcy, Trades In Da Club for In Da Courthouse

The rapper Curtis James “50 Cent” Jackson III filed a voluntary chapter 11 bankruptcy petition in Connecticut bankruptcy court on Monday, July 13, 2015. Jackson rose to prominence with songs like In Da Club and P.I.M.P. from...more

CERCLA Statute of Limitations Applies To Contribution Claims By A Party to a Private Settlement

Sometimes cases seem to be deciding issues that are so obvious it’s hard to figure out why they get any serious attention from the courts. One such case is ASARCO, LLC v. Celanese Chemical Company recently decided by the...more

Can Debts Caused by a DUI Be Discharged in Bankruptcy?

With the 4th of July weekend coming up, DUI task forces will be out. This got me thinking about the relationship between DUI and bankruptcy. I work in an office next to John Skiba and we’ve talked about how these practice...more

Bankruptcy Beat: Former NFL Player Defeats Fraud Allegations Which Results In Discharge Of Debt

On March 31, 2015, the Honorable Albert S. Dabrowski issued a decision in Hamrah v. Coulette (In re Coulette), Adv. Pro. No. 13-2039, concerning the issue of whether an obligation created by a failed business investment gives...more

Seventh Circuit Says Violations of Wisconsin’s Theft-by-Contractor Statute Are Not Dischargeable in Bankruptcy

The Bankruptcy Code prevents an individual debtor from discharging certain debts, including, upon request of the creditor, debts for “fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). The...more

CFPB Pursues Recovery Against For-Profit College Corinthian and Relief for Its Students

Corinthian Colleges (Corinthian) announced on April 26 that it would cease operations at its remaining physical campuses. This announcement refers to the 30 or so physical campuses that Corinthian continued to operate...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

Bankruptcy Beat: Jockeys Nearing Finishing Line in 25-Year Civil and Bankruptcy Litigation with their Former Business Managers

Hall of fame horse racing jockeys Laffit Pincay, Jr. and Chris McCarron first sued their former business managers, Vincent and Robert Andrews, in California District Court in 1989 for fraud, breach of fiduciary duty and other...more

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