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By Ed Boltz, 10 October, 2012

Bankr. E.D.N.C.: In re Meek- Hardship Discharge under 11 U.S.C. § 1328

Summary: The Male Debtor, who was the sole provider for the family, secured new employment in Colorado, and soon thereafter, the debtors and their children relocated accordingly. Subsequently, the Debtors sought a hardship discharge under 11 U.S.C.
By Ed Boltz, 10 October, 2012

4th Circuit: McLean v. Ray- Bona Fide Error Defense under FDCPA for Debt Collection Attorney allows reliance on Creditor’s Statement of Amount Owed

Summary: Ms. McLean was first admitted to ManorCare, a nursing home, in July 2006, signing a contract (through her son, James McLean, who held her Power of Attorney) agreeing to all costs, including attorneys’ fees, for collection of unpaid amounts. The contract provided that it would remain in effect if she was discharged but re-admitted within 15 days. In 2007, following her discharged from the nursing home, Mr. Ray sued Ms. McLean on behalf of ManorCare, with the matter being resolved by the parties. Ms.
By Ed Boltz, 10 October, 2012

Bankr. E.D.N.C.: In re Marshall (Deceased)- Hardship Discharge, Death and Taxes

Summary: The Debtor died during her Chapter 13 case, still owing more that $165,000 in nondischargeable taxes to the IRS. Following the severance of her co-debtor/husband’s case, the Debtor’s attorney then filed a Motion for a Hardship Discharge pursuant to 11 U.S.C. § 1328(b). While stating that the death of a debtor can constitute a circumstance precluding completion of plan payments for which a debtor should not be held accountable. See In re Bond, 36 B.R. 49 (Bankr. E.D.N.C.
By Ed Boltz, 10 October, 2012

Bankr. M.D.N.C.: Livingstone College v. DeBerry- Failure to Specifically Cite Statutory Basis for Claim and Amendment of Complaint

Summary: On remand from the district court, the issue was whether the complaint filed by Livingstone College, Inc. (“Livingstone”) properly states a claim for relief under 11 U.S.C.
By Ed Boltz, 10 October, 2012

4th Circuit: Larrabee v. Bank of America- Iqbal/Twombley Pleading of Truth In Lending Rescission Action

Summary: The Court of Appeals held that the Plaintiff had failed to state a plausible claim for relief under the TILA because her proposed reading of the notice disclosing the number and due dates of payments due under that transaction is not objectively reasonable. Further, because the disclosure to the Plaintiff of her right to cancel the 2007 credit transaction contained all of the information required by the TILA, 15 U.S.C.A. § 1635(a)-(b), and Regulation Z, 12 C.F.R.
By Ed Boltz, 10 October, 2012

Bankr. E.D.N.C.: In re Keel- Intention of Party is Irrelevant in Flawed Creation of Trust Account

Summary: In 2007, the Female Debtor created two “payable on death” accounts on behalf of her children. In 2008, the Debtor opened two Certificates of Deposit, initially listing her husband as the beneficiary. In 2011, needing funds for home renovations, the Debtor contacted the bank and was advised to withdraw the funds from the 2007 “payable on death” trust accounts. After doing this, the Debtor then changed the beneficiaries of the Certificates of Deposit to be her children, but did not have those CDs converted into “payable on death” trust accounts.
By Ed Boltz, 10 October, 2012

Bankr. E.D.N.C.: In re KAD- No Confirmation without Disclosure Statement or Adequate Information under § 1125(f)(1) included in the Plan

Summary: Pursuant to 11 U.S.C. § 1129(e), in a small business case, a plan shall be confirmed not later than forty-five days after it is filed, unless the time for confirmation is extended. In a Chapter 11 case, a disclosure statement complying with 11 U.S.C. § 1125 shall be filed with the plan.
By Ed Boltz, 10 October, 2012

Bankr. E.D.N.C.: In re Johnson- Fraudulent use of Power of Attorney for Filing Bankruptcy

Summary: Melba Johnson granted a Power of Attorney to her daughter, Janet Johnson, which included both authority to obtain credit and to file bankruptcy. After obtaining and using credit cards in Melba Johnson’s name, allegedly without Melba’s knowledge, Janet (with the assistance of Melba’s other daughter Tammy) filed a Chapter 7 bankruptcy on behalf of Melba. Subsequently, Melba discovered the bankruptcy and, expressing that she knew about, needed nor wanted the bankruptcy, requested that the case be dismissed.
By Ed Boltz, 10 October, 2012

N.C. Court of Appeals: John Conner Construction v. Grandfather Holding Company- No Materialman’s Lien when Debtor did not own the property at commencement of construction

Summary: John Conner Construction (“JCC”) and the other plaintiffs, provided labor and materials for the improvement of a parcel of land owned by Grandfather Holding Company (“GHC”), which had obtained financing for the purchase and improvement of the parcel from Mountain Community Bank (“MCB”). The construction was commenced prior to GHC actually purchasing the property. On completion of the construction, JCC presented a bill for $1,377,774.02, but GHC only had $262,000 remaining from the financing. This amount was paidl, leaving a substantial balance.
By Ed Boltz, 10 October, 2012

Bankr. M.D.N.C.: Ivey v. Buchanan- Filing of Proof of Claim subjects creditors to Final Judgment from the Bankruptcy Court for Fraudulent Transfer Claims

Summary: Under the test formulated by the Supreme Court in Stern v. Marshall the court may enter final judgment in a core proceeding where "the action at issue stems from the bankruptcy itself or would necessarily be resolved in the claims allowance process." Stern, 131 S. Ct. at 2618. Where a defendant has filed a proof of claim, a fraudulent transfer action brought under either section 548 or section 544 becomes a part of the process of allowance and disallowance of claims. See Langenkamp v. Culp, 498 U.S.

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