News & Analysis as of

Foreclosure Chapter 7

Foreclosure is a legal process whereby a lender seeks to force the sale of a mortgaged property in order to recover the balance of a delinquent loan. Recently, the foreclosure process has been the subject of... more +
Foreclosure is a legal process whereby a lender seeks to force the sale of a mortgaged property in order to recover the balance of a delinquent loan. Recently, the foreclosure process has been the subject of greater legislative and judicial scrutiny after systemic abuses were uncovered during the widespread foreclosure crisis resulting from the Great Recession. less -

Upcoming Amendments to Bankruptcy Rule 3002 to Impact Bankruptcy Filing Practices for Mortgagees

by K&L Gates LLP on

Effective December 1, 2017, certain amendments to the Federal Rules of Bankruptcy Procedure (“the Bankruptcy Rules”) recently adopted by the Supreme Court will impact the allowance of secured claims in bankruptcy. Below, we...more

First Circuit: Sending Form 1099-A Post-Chapter 7 Discharge Does Not Violate the Discharge Injunction

by Goodwin on

On December 14, 2016, the United States Court of Appeals for the First Circuit affirmed the New Hampshire Bankruptcy Court and District Courts’ findings that a mortgage lender sending Internal Revenue Service Form 1099-A to a...more

Eleventh Circuit Decides Surrender Means Just That

by PretiFlaherty on

In the recent opinion of In re Failla, the Eleventh Circuit ruled that when a debtor indicates in a Chapter 7 bankruptcy schedules case that she or he intends to “surrender” property subject to a secured claim, the debtor...more

Eleventh Circuit Holds that a Debtor who Elects to “Surrender” Real Property Cannot Oppose the Lender’s Foreclosure Case

In In re Failla, 838 F.3d 1170 (11th Cir. Oct. 4, 2016), the Eleventh Circuit resolved a split among Florida bankruptcy judges by ruling that a debtor who elects to "surrender" real property during its bankruptcy case cannot...more

Client Alert: Federal Appeals Court Rules That Bankrupt Debtors’ Choice to "Surrender" Real Property Waives Their Right to Contest...

Under Section 521(a)(2)(A) of the federal bankruptcy code, a debtor in a chapter 7 bankruptcy must file a statement within 30 days of the bankruptcy filing notifying the court, creditors and the trustee whether the debtor...more

Eleventh Circuit Affirms That a Debtor’s Surrender in Bankruptcy Means Just That-You Must Surrender

by Burr & Forman on

Burr & Forman lawyers won a significant victory in the Eleventh Circuit earlier this month. In the case In re: David A. Failla, — F.3d — (2016), the U.S. Court of Appeals for the Eleventh Circuit affirmed that a person who...more

One Appellate Court’s Message to Debtors: Do What You Say!

by Baker Donelson on

Mortgage lenders received some good news from the Eleventh Circuit Court of Appeals last week! In Failla v. Citibank, N.A., Case No. 15-15626 (11th Cir. Oct. 4, 2016), the Court affirmed a bankruptcy judge’s order for a...more

The Eleventh Circuit has spoken: “Debtors who surrender property must get out of the creditor’s way”

In recent years, there has been a hotbed of litigation across the nation, particularly in Florida state and bankruptcy courts, regarding a debtor’s ability to contest a secured creditor’s foreclosure notwithstanding the...more

Surrendering Your Property in Bankruptcy Means You Must Actually Surrender It

by Carlton Fields on

The title of this article seems self-evident. Lenders, servicers, and others active in the foreclosure arena these past few years know that it has been anything but. Borrowers surrender property in bankruptcy but,...more

Eleventh Circuit Rules that Debtors Who Surrender Real Property in Bankruptcy Cannot Oppose Foreclosure

by Burr & Forman on

On October 4, 2016, the Eleventh Circuit Court of Appeals ruled that chapter 7 debtors who file a statement of intention to surrender real property in bankruptcy cannot later contest a foreclosure action, and bankruptcy...more

Texas Home Equity Loan Litigation Update: Eastern District of Texas Reaffirms that Quiet-Title and Breach-of-Contract Claims...

by Locke Lord LLP on

On May 20, 2016, the Texas Supreme Court issued two opinions dealing with the home-equity lending provisions in article XVI, section 50 of the Texas Constitution. In Wood v. HSBC Bank USA, N.A., ___ S.W.3d ___, 2016 WL...more

When and How Can a Chapter 7 Bankruptcy Trustee Liquidate Your Collateral?

by Murtha Cullina on

So you are chugging along with a foreclosure action (either on real and/or personal property) only to be stopped in your tracks by the borrower filing a voluntary Chapter 7 bankruptcy petition. The usual, immediate thought...more

Banking & Financial Services E-Note - March 2016

by Burr & Forman on

Within Burr & Forman's footprint, Florida, Mississippi, and Tennessee have passed statutes exempting Health Savings Account ("HSA") contributions from a debtor's bankruptcy estate. To date, the state of Georgia has not passed...more

Tenth Circuit Bankruptcy Appellate Panel Approves Settlement Agreement with Foreclosing Lender Over Objections of the Debtor

by Goodwin on

Often overlooked by lenders and servicers, sometimes striking a deal with the Chapter 7 Trustee in bankruptcy court, is the more prudent and cost effective approach to resolving frivolous lawsuits filed by defaulting...more

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

by Stinson Leonard Street on

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

Bankruptcy Beat: Does The Automatic Stay Apply To Stay Acts Against An Individual Debtor’s Wholly-Owned Company?

by Pullman & Comley, LLC on

A vexing issue for some creditors arises when an individual who is typically a guarantor or co-debtor of his wholly-owned company’s debt files bankruptcy under chapter 7, 11 or 13 and then takes the position that the...more

Bankruptcy Court Order Compelling Surrender of Property Upheld on Appeal

by Burr & Forman on

On November 23, 2015, in the first appellate decision of its kind, the District Court for the Southern District of Florida affirmed a bankruptcy court order to compel chapter 7 debtors to surrender real property by directing...more

How Long Is Too Long To Reopen A Bankruptcy Case?

by Tucker Arensberg, P.C. on

In a per curiam opinion that is not precedential but of interest to lenders who take mortgages as security, the Court of Appeals for the Third Circuit decided that the Debtor’s effort to reopen her bankruptcy case was too...more

Property Surrender: Surrender Means Surrender – Really

by Pepper Hamilton LLP on

In re Failla, 529 B.R. 786 (Bankr. S.D. Fla. 2014) – Individual chapter 7 debtors filed a statement of intention electing to surrender their real estate. The mortgagee contended that they had failed to do so and filed a...more

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

by Ballard Spahr LLP on

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

Florida Court Rules Borrowers Who Surrender Property in Bankruptcy Can't Later Take it Back

by Baker Donelson on

Thanks to several recent United States Bankruptcy Court decisions in Florida, mortgage servicers should now expect borrowers who surrender their real property in bankruptcy to not contest foreclosure later. Since the...more

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

by Seyfarth Shaw LLP on

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

"Strip, Strip Hooray!" - Supreme Court Settles Chapter 7 Lien-Stripping Debate

by Shipman & Goodwin LLP on

Twenty-three years after initially visiting the issue, the United States Supreme Court has recently settled what some would call “the single most important unresolved issue in consumer bankruptcy” - whether Chapter 7 permits...more

Supreme Court Reaffirms a Chapter 7 Debtor's Inability to Strip a Lien Against Real Property

by Allen Matkins on

Reaffirming its 1992 decision in Dewsnup v. Timm, on June 1, 2015, the U.S. Supreme Court in Bank of America v. Caulkett, No. 13-1421, once again ruled that a chapter 7 debtor may not void a junior lien under Bankruptcy Code...more

The Supremes Tell the Eleventh Circuit: No Lien Stripping

by Baker Donelson on

On June 1, 2015, the United States Supreme Court issued a unanimous ruling resolving a split amongst circuit courts in which the 11th circuit was the singular minority, addressing the permissibility of “lien-stripping” in...more

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