Tag: bankruptcy

Urban Institute Studies: Debt in America and Delinquent Debt in America

Debt in America Abstract:

Debt can be constructive, allowing people to build equity in homes or finance education, but it can also burden families into the future. Total debt is driven by mortgage debt; both are highly concentrated in high-cost housing markets, mostly along the coasts. Among Americans with a credit file, average total debt was $53,850 in 2013, but was substantially higher for people with a mortgage ($209,768) than people without a mortgage ($11,592). Non-mortgage debt, in contrast, is more spatially dispersed. It ranges from a high of $14,532 in the East South Central division to a low of $17,883 in New England.… Read More

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N.C. Court of Appeals: Epes v. B.E. Waterhouse, L.L.C.- Bankruptcy a Default

Summary:

Epes was the guarantor of a lease on behalf of the lessee, CRC Management. CRC eventually sold its assets to Fuddruckers. In April 2010, Fuddruckers filed bankruptcy. In July 2010, Epes brought an action for a declaratory judgment that he no longer had any liability under the guaranty, however summary judgment was granted to the Defendants.

The Court of Appeals affirmed the summary judgment for the defendants, finding that the lease included the filing of bankruptcy. Epes also argued that due to the Fuddruckers bankruptcy, Defendants had to obtain relief from the automatic stay in that case before seeking a summary judgment against him.… Read More

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Bankr. E.D.N.C.: In re Edwards- Escrow Shortage as Pre-Petition Arrearage

Summary: Relying on In re Beaudet, 455 B.R. 671, 673 (Bankr. M.D. Tenn. 2011), the bankruptcy court held that while Ocwen was entitled to include future escrow amounts in the on-going monthly payment, the pre-petition escrow shortage should instead be included in the arrearage claim.     Commentary: If a pre-petition escrow shortage is included in the monthly payment, that will require a 12-month cure.  If, however, it is included in the arrearage claim paid through the Chapter 13 plan, this allows for a cure of up to 60 months.

For a copy of the opinion, please see:

Edwards- Escrow Shortage as Pre-Petition Arrearage.PDF Read More

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Book: Katherine Porter , Editor- Broke: How Debt Bankrupts the Middle Class

Description:

About 1.5 million households filed bankruptcy in the last year, making bankruptcy as common as college graduation and divorce. The recession has pushed more and more families into financial collapse—with unemployment, declines in retirement wealth, and falling house values destabilizing the American middle class. Broke explores the consequences of this unprecedented growth in consumer debt and shows how excessive borrowing undermines the prosperity of middle class America.

While the recession that began in mid-2007 has widened the scope of the financial pain caused by over-indebtedness, the problem predated that large-scale economic meltdown. And by all indicators, consumer debt will be a defining feature of middle-class families for years to come.… Read More

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Bankr. M.D.N.C.: In re Meredith- No extension of time to file Proof of Claim

Summary:

Creditor filed its Proof of Claim six(6) days after the bar date.  Following the objection to the Claim by the Chapter 7 Trustee, the Creditor argued that the claim should be allowed due to excusable neglect.  The bankruptcy court held that under Rule 9006(b)(3),  it had no authority to extend the time to file claims.

For a copy of the opinion,  please see:

Meredith- No extension of time to file Proof of Claim.PDF Read More

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Bankr. W.D.N.C.: In re Eutsler- When are of Earnings of the Debtor “Earned” for Purpose of Exemption under N.C.G.S. § 1-362

Summary:

The Female Debtor received a bonus for 2010 in March 2011 ad filed Chapter 7 in June 2011.  She claimed an exemption in an annual bonus under N.C.G.S. § 1-362, as earnings of the debtor necessary for the support of the family and earned within 60 days.  The Chapter 7 Trustee objected.    The bankruptcy court held that a bonus did fall within the definition of earnings.   The court continued, however, to find that an annual bonus was not “earned” when received, but throughout the year.  Accordingly it was not “earned” within 60-days of filing and not entitled to exemption.

For a copy of the opinion, please see:

Eutsler- When are of Earnings of the Debtor Earned for Purpose of Exemption under N.C.G.S. Read More

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Law Review: Miller, Lance and Miller, Michelle- Repeat Filers Under BAPCPA: A Legal And Economic Analysis

Abstract:

On April 20, 2005, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). BAPCPA was hailed by some as a sensible overhaul of the bankruptcy code aimed towards decreasing repeat bankruptcy filing rates. In this article, the authors  consider specific changes that BAPCPA made to the Bankruptcy Code. Some of these changes were specifically targeted at the congressional view that repeat bankruptcy filings are largely the result of strategic and irresponsible behavior. This article considers whether, in actuality, BAPCPA decreased repeat filings. The authors’ statistics show that while BAPCPA did increase the time between filings, it did not change the rate of repeat filings.… Read More

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Law Review: Miller, Michelle- Who Files for Bankruptcy? State Laws and the Characteristics of Bankrupt Households

Abstract:

The characteristics of bankrupt households (such as income and asset levels) vary widely across  states. This paper asks whether these variations can be attributed to state exemption laws or state garnishment laws. Using a new household-level dataset, the author finds that high exemption levels encourage high asset households to file for bankruptcy while high garnishment rates encourage low income households to file for bankruptcy. These results are supported by a theoretical model in which households choose between repayment, bankruptcy, and non-response (which occurs when households simply “walk away” from their bills, allowing creditors to garnish their wages and seize their assets).… Read More

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Law Review: Bruckner, Matthew- Improving Bankruptcy Sales by Raising the Bar

Abstract:

In response to objections causing wasteful, unnecessary and inappropriate delay in the bankruptcy sale context, this article concludes that bankruptcy courts should employ a preliminary injunction-like standard for evaluating objections to bankruptcy sales.   Employing a strict, preliminary injunction-like standard should decrease the possibility that parties-in-interest will introduce an improvident delay into the bankruptcy sale process.  By preventing inappropriate delay, courts will ensure that parties receive an appropriate amount of procedural protection for their legitimate claims, and they will also prevent creditors from engaging in rent-seeking behavior by making strategic objections to bankruptcy sales.

For a copy of the article, please see:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1983384

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Bankr. E.D.N.C.: In re Dexter- § 362(k) Violation for Failure to Turnover Insurance Proceeds

Summary:

The Debtors’ home was damaged by Hurricane Irene while they were in Chapter 13.  Their insurance issued a check for damages in the amount of $9,052.93 to the house and a second check for $1,376.54 for personal property, both payable jointly to the Debtors and Chase, the mortgage servicer.

The Debtors followed the instructions on Chase’s website for insurance checks in the amount less than $20,000.00, endorsing the check and forwarding it to Chase, believing that since they were current on their Chapter 13 payments, Chase would expeditiously return the money to them for repairs.

Because the Chapter 13 Trustee had only made a partial disbursement, despite the Debtors being current on their plan payments, Chase refused to return the insurance proceeds. … Read More

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