Month: June 2014

Bankr. W.D.N.C.: In re Crawford- Definition of Dependent for Exemptions


The Debtor’s great uncle Jennings had, in his waning years, received care and assistance from the Debtor and transferred his Rock Hill, S.C. home to her. When she filed bankruptcy, the Debtor asserted that Jennings was her dependent and claimed the property as exempt under N.C.G.S. § 1C-1601(a)(1). Less than three months after her bankruptcy was filed, Jennings died.

Sustaining the Trustee’s objection to the Debtor’s claimed homestead exemption, the bankruptcy court held that while the Debtor had provided sporadic assistance with paying his bills, “what she gave to Jennings was not financial support, but rather, care.” Relying on In re Preston.… Read More

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Form: Best Interests of the Creditors Calculator

11 U.S.C. § 1325(a)(4), often called the “Best Interests of the Creditors” or the “Liquidation” test, requires that:

the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;

As such, Chapter 13 Debtors must pay unsecured creditors at least as much as those creditors would get in a Chapter 7 liquidation. But it is important to keep in mind that a Chapter 7 liquidation is not without costs- the Chapter 7 Trustee will receive a strictly calculated commission pursuant to 11 U.S.C.… Read More

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Bankr. E.D.N.C.: In re Bradshaw- 11 U.S.C. § 1322(b)(2) Anti-modification inapplicable if Mortgage Takes Escrow Account as Collateral


The Debtors principal residence was found to be worth $136,000 with a first mortgage of $116,254.11 held by PNC and a second mortgage, held by Asset Ventures, LLC, in the amount of $27,000. This second mortgage additionally took as collateral the Debtors’ escrow account.

Following In re Bradsher, 427 B.R. 386, 388 (Bankr. M.D.N.C. 2010), the court held that as an escrow account is additional personal property, the anti-modification provisions of 11 U.S.C. § 1322(b)(2) did not apply and allowed the bifurcation of Asset Ventures’ claim, with $19,745.89 secured and unsecured in the amount of $7,254.11.

For a copy of the opinion, please see:

Bradshaw- 11 U.S.C. Read More

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4th Circuit: Fontell v. Hassett- FDCPA and Homeowner’s Associations


Fontell brought suit against her Homeowner’s Association (“HOA”)alleging violation of the FDCPA, the Maryland Consumer Debt Collection Act (“MCDCA”) and the Maryland Consumer Protection Act (“MCPA”). When the district court did not grant her summary judgment on these claims, she appealled.

The Court of Appeals held that her assertion that the HOA violated the MCDCA by untimely bringing suit against her was not supported by evidence sufficient as a matter of law to grant summary judgment under Rule 56(a). The property management company, as it was always responsible for collecting the homeowner’s dues and not just after there was a default, did not constitute a “debt collector” under the FDCPA, as a default “does not occur immediately upon a debt becoming due, unless the terms of the parties’ relevant agreement dictate otherwise.” See Alibrandi v.… Read More

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Bankr. W.D.N.C.: In re Magsino- Income Contingent Repayment Plan Precludes Student Loan Discharge


After exhausting her 36 months of student loan deferments for unemployment, the Debtor sought to discharge her student loans in bankruptcy. The Department of Education offered her an Income Contingent Repayment plan (“ICRP”), with monthly payments set, at least initially, in the amount of $0.00 a month.

Even though the Debtor had a very low standard of living, the bankruptcy court held that under ICRP she would have payments of $0.00 a month, her student loans would not cause a minimal standard of living. Further, despite being 61 years old, the court held that “age alone is not an “additional circumstance” determining the second prong.… Read More

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