News & Analysis as of

Consumer Bankruptcy › Section 506

Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are... more +
Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are eligible for Chapter 7 or Chapter 13 depending on the nature of their debts and assets. less -
Adams and Reese LLP

"The § 1111(b) Election: Overview, Considerations and Unique Issues in Subchapter V"

Adams and Reese LLP on

Under § 506(a)(1) of the Bankruptcy Code, a secured creditor’s claim is secured only to the extent of the collateral’s value. Any amount over that value is bifurcated into a separate unsecured claim. Critically, if a...more

Jones Day

Fourth Circuit Bolsters Claims for Postpetition Attorney's Fees Incurred by Unsecured or Undersecured Creditors

Jones Day on

In SummitBridge Nat’l Invs. III, LLC v. Faison, 915 F.3d 288 (4th Cir. 2019), the U.S. Court of Appeals for the Fourth Circuit ruled that an unsecured or undersecured creditor may include postpetition attorney’s fees and...more

Dechert LLP

Fourth Circuit Allows Unsecured Claim for Post-Petition Legal Fees

Dechert LLP on

It is a well-established principle of bankruptcy law that claims generally crystallize as of the bankruptcy petition date. Of course, section 506(b) of the bankruptcy code allows over-secured, secured creditors to recover...more

Rosenberg Martin Greenberg LLP

Fourth Circuit Allows Unsecured Creditors to Assert Claims for Attorneys' Fees In Bankruptcy Cases

Rosenberg Martin Greenberg LLP on

Lawyers who represent debtors in bankruptcy cases, supported by rulings from many bankruptcy judges, have long taken the position that creditors with unsecured claims whose agreements with their debtors provide for payment of...more

Seyfarth Shaw LLP

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

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

Allen Matkins

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

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

Pullman & Comley, LLC

Connecticut District Court Rules That Oversecured Creditor Was Not Entitled to Postpetition Default Interest Until Unsecured...

Pullman & Comley, LLC on

Section 506(b) of the Bankruptcy Code allows secured creditors to receive post-bankruptcy or postpetition interest, also known as pendency interest, when the value of their collateral exceeds the amount they are owed. ...more

Burr & Forman

Drawing A Bright Line In The Fog: Eleventh Circuit Precedent For Challenging McNeal

Burr & Forman on

As most mortgage lenders know by now, on May 11, 2012, the Eleventh Circuit issued an unpublished decision in McNeal v. GMAC Mortgage, LLC (In re McNeal) , 477 Fed. App’x 562, holding that a chapter 7 debtor can “strip off”...more

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