ABI Blog Exchange

Chapter 15-Related Rulings: Trends and Practical Lessons for Cross-Border Restructurings

4th Cir.: Davis v. Capital One-TCPA Expert Excluded, Class Not Ascertainable

4th Cir.: Davis v. Capital One-TCPA Expert Excluded, Class Not Ascertainable Ed Boltz Mon, 09/15/2025 - 17:31 Summary Clarence Davis began receiving prerecorded debt-collection calls from Capital One, despite never having been its customer. The problem arose because his cell phone number had previously belonged to a delinquent Capital One account holder. Even after Davis twice told Capital One to stop calling, the robocalls continued briefly. Davis filed a putative class action under the Telephone Consumer Protection Act (TCPA), seeking to represent all non-customers nationwide who had received Capital One robocalls in the past four years. His case hinged on expert testimony proposing a methodology to identify affected individuals through phone company records, the FCC’s Reassigned Numbers Database, and data broker lookups. The district court excluded Davis’s expert under Rule 702 and Daubert, finding her methodology untested, error-prone, and incapable of reliably separating customers from non-customers. Without an admissible expert methodology, Davis’s class could not satisfy the Fourth Circuit’s “ascertainability” requirement for Rule 23(b)(3) classes. The court denied certification, though it awarded Davis $2,000 individually for Capital One’s TCPA violations. On appeal, the Fourth Circuit affirmed. The panel held the district court acted within its discretion both in excluding the expert and in concluding that the proposed class was not readily identifiable without individualized inquiries. Commentary Although not a bankruptcy case, Davis v. Capital One illustrates two familiar themes for consumer debtor attorneys: (1) the difficulty of aggregating widespread but low-dollar statutory violations into effective class relief, and (2) the judicial gatekeeping role over expert testimony that often decides whether a consumer class case succeeds or fails. The Fourth Circuit has previously recognized in Krakauer v. Dish Network that the TCPA is designed to function through class actions, since individual claims are too small to pursue. Yet, as in Davis, the hurdle of ascertainability—peculiar to this Circuit—often defeats such suits at the certification stage. For debtors’ counsel, this decision is another reminder that large-scale systemic creditor misconduct may escape classwide accountability, leaving only individual statutory damages. There is a quiet but important bankruptcy angle here: many debtors we represent arrive in Chapter 13 or 7 after being hounded by misdirected or unlawful robocalls. The TCPA provides a strict-liability remedy, but unless paired with creative lawyering or individual adversary proceedings, class-based deterrence is elusive in the Fourth Circuit. Finally, the opinion underscores the contrast between circuits. Other courts of appeals have softened or rejected strict ascertainability requirements. Here, the Fourth Circuit insists on a class that is “readily identifiable” without extensive individualized fact finding, even where doing so undercuts Congress’s intent to curb robocalls. For consumer advocates, this decision reaffirms the uphill struggle to vindicate small-dollar statutory rights in this jurisdiction—whether under the TCPA, the FDCPA, or even recurring bankruptcy stay and discharge violations. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document davis_v._capital_one.pdf (178.36 KB) Category 4th Circuit Court of Appeals

Weekly News – September 12

A deep dive into Spirit Airlines, new guidance issued prohibiting judge shopping, Echostar mega deal surprise, Texas Two Step doesn’t fly in Delaware, and much, much more… Creditor Corner Your…

Here’s What We Need for our Next Meeting

Here’s what we usually need for our next meeting On this page, I’m introducing Lexria, my virtual file clerk. Lexria gathers the necessary information and required documents.we need for our next meeting. I call our next meeting the Be Happy meeting. At the Be Happy meeting, we review the information that we need to get […] The post Here’s What We Need for our Next Meeting appeared first on Robert Weed Virginia Bankruptcy Attorney.

Bankr. E.D.N.C.: In re Sugar- Discharge Allowed After Reliance on Counsel Mitigates Sanctions

Bankr. E.D.N.C.: In re Sugar- Discharge Allowed After Reliance on Counsel Mitigates Sanctions Ed Boltz Fri, 09/12/2025 - 16:19 Summary Judge Warren’s most recent opinion in In re Sugar (Bankr. E.D.N.C. Aug. 15, 2025) follows remand from both the U.S. District Court and the Fourth Circuit Court of Appeals. The case began with the dismissal of Christine Sugar’s Chapter 13 in 2023, coupled with a five-year nationwide bar on refiling, after she sold her residence without prior court approval in violation of E.D.N.C. Local Bankruptcy Rule 4002-1(g)(4). At the time, the court viewed Sugar as defiant and unapologetic, making dismissal with prejudice appear justified. On appeal, however, the District Court and the Fourth Circuit (in Sugar v. Burnett, 130 F.4th 358 (4th Cir. 2025)) questioned whether reliance on advice of counsel had been adequately considered. The Fourth Circuit remanded with instructions to reassess sanctions in light of her attorney’s role. On remand, represented by new counsel, Sugar testified credibly that she had repeatedly disclosed her inheritance and contemplated sale of her house to her attorney, but was affirmatively advised she could keep and use the funds and that no court approval was needed to sell her home. The court found this advice “poor and erroneous,” and concluded Sugar reasonably relied on it. Vacating its prior order, the bankruptcy court allowed her discharge to enter and invited the Bankruptcy Administrator to review possible professional discipline. Commentary This decision continues the long-running saga of Sugar, now spanning multiple layers of appellate review. At each turn—from dismissal, to sanctions, to affirmation by the District Court, to remand by the Fourth Circuit, and finally to discharge—her case highlights the tension between local rule compliance, debtor candor, and attorney responsibility. The Fourth Circuit’s intervention is notable. Unlike its earlier refusal to extend grace to the debtor in Purdy (where a debtor’s repeated bad faith filings justified dismissal with prejudice), here the appellate court recognized that attorney advice could mitigate even seemingly blatant violations. Similarly, while In re Beasley, Case No. 21-02322-5PWM, involved sanctioning an attorney for nondisclosure, in Sugar the focus shifted to how that nondisclosure misled both the debtor and the court. The contrast is instructive: Purdy underscores that when the debtor alone is culpable, harsh remedies like multi-year bars may be sustained. Beasley demonstrates that courts will not hesitate to sanction attorneys who conceal material information. Sugar sits uncomfortably between these poles, reminding us that when an attorney’s “crusade” or misinterpretation of local rules leads a debtor astray, punishment of the debtor herself may be inequitable. For consumer debtor attorneys, the case is a cautionary tale with two utilities: Reliance on counsel is not an absolute defense, but if documented through emails and testimony, it can mitigate sanctions and even reverse a dismissal years later. Local Rule compliance is not optional. Even if a practitioner believes a rule is inconsistent with the Code, pursuing a test case requires full and frank disclosure to the client of the risks—especially the possibility of dismissal with prejudice. The Sugar opinions (bankruptcy, district, and circuit) now join Purdy and Beasley as part of the small but growing body of Fourth Circuit consumer bankruptcy case law emphasizing professional responsibility. While debtors may ultimately receive a second chance, attorneys who misadvise or conceal face not only sanctions but potential referral to the State Bar. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_sugar.pdf (202.82 KB) Category Eastern District

Does Bankruptcy Stop Wage Garnishment in Pennsylvania?

When you file for bankruptcy, the bankruptcy court issues an “automatic stay.” This stops creditors and collectors from coming after you, but can it stop everything? Is wage garnishment covered […]

Law Review: McLaughlin, Christopher- NC School of Government Tax Foreclosures: An Overview

Law Review: McLaughlin, Christopher- NC School of Government Tax Foreclosures: An Overview Ed Boltz Thu, 09/11/2025 - 20:50 Summary McLaughlin’s bulletin provides North Carolina counties with a primer on tax foreclosure. Local governments can use either: Mortgage-style foreclosure (G.S. 105-374) – a full civil action, with attorney’s fees chargeable to the taxpayer. In rem foreclosure (G.S. 105-375) – a streamlined, judgment-based process with a capped $250 administrative fee. The article covers lien priority, redemption rights, surplus distribution, and the mechanics of sales and upset bids. It also notes that counties may foreclose even against tax-exempt organizations (if taxes accrued before the exemption) or property owned by debtors who previously went through bankruptcy, once the automatic stay no longer applies. Commentary For consumer debtor attorneys, the key intersection is with bankruptcy and constitutional law: Automatic stayin Bankruptcy – McLaughlin states foreclosure can resume once a bankruptcy ends by dismissal or discharge. But under § 362(c), the stay continues against property of the estate until case closure (or abandonment), meaning a county may need stay relief even post-discharge. Counties rarely press this distinction, but debtor counsel should. County motions for relief – Counties, like any secured creditor, can seek stay relief under § 362(d), though cost often deters them. This can buy debtors critical time to cure arrears or negotiate. This option is not presented in the article. Tyler v. Hennepin County – The Supreme Court made clear that keeping more than is owed in taxes is a taking. North Carolina already requires that surplus proceeds from the initial foreclosure sale be turned over to the clerk of court for distribution. But what about the subsequent sale scenario? Under G.S. 105-376, if a county is the high bidder and takes title, it holds the property “for the benefit of all taxing units” and may later dispose of it. Current law lets the county keep any surplus above taxes when it later resells. After Tyler, t hat practice may be constitutionally suspect. The Court’s reasoning—that equity beyond the tax debt is still the homeowner’s property—suggests that if the county resells for more than the taxes owed, the excess belongs to the former owner, not the county. Consumer attorneys should be prepared to argue that Tyler extends to this scenario. A county cannot avoid the Takings Clause by first bidding in the taxes, taking title, and then capturing the homeowner’s equity on resale. Just as Minnesota could not legislate away surplus equity, North Carolina counties cannot sidestep it through G.S. 105-376. Practical leverage – Even if courts have yet to apply Tyler this way, raising the issue can help debtor counsel negotiate with counties—particularly in hardship cases or where a homeowner has substantial equity at risk. Takeaway McLaughlin’s bulletin outlines the procedural mechanics counties rely on, but in a post- Tyler world, debtors and their attorneys should not assume counties can lawfully pocket resale profits after acquiring property for back taxes. That question is ripe for litigation, and until resolved, consumer attorneys should press Tyler arguments whenever equity remains in a foreclosed home. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document tax_foreclosures_an_overview.pdf (483.42 KB) Category Law Reviews & Studies

A Refresher On § 1112(b) “Bad Faith” Dismissal For Debtor’s Solvency (In re Dandurand—Part 3)

By: Donald L Swanson It’s helpful, every now and then, to receive a refresher on basic bankruptcy laws. We have such a refresher — on a creditor’s motion to dismiss for “bad faith,” based on Debtor’s solvency at filing and absence of pre-petition defaults. This article is the third-of-three in a “refresher” series based on the... Continue Reading →

W.D.N.C.: Black v. Brice-Upholds Business Judgment Rule, Rejects Caremark Claim

W.D.N.C.: Black v. Brice-Upholds Business Judgment Rule, Rejects Caremark Claim Ed Boltz Tue, 09/09/2025 - 16:43 Summary: Schletter, Inc., a Delaware-incorporated solar racking manufacturer based in Shelby, NC, lost market competitiveness when its FS Uno system fell behind the competition. CEO Dennis Brice, after months of analysis and with approval from its German parent company, launched a new “G-Max” product intended to be cheaper, lighter, and easier to install. To meet aggressive delivery deadlines in contracts with steep liquidated damages, development was rushed, no testing was performed, costs and production capacity were misjudged, and customers struggled with installation. The product rollout failed, customer claims mounted, and Brice was terminated in 2017. Schletter filed Chapter 11 in 2018. Post-confirmation, Plan Administrator Carol Black sued Brice for breach of fiduciary duty under Delaware law, arguing he acted for the benefit of the German parent (continuing licensing fees) rather than the debtor, and that ignoring “red flags” about the G-Max launch constituted a Caremark oversight breach. The bankruptcy court granted summary judgment for Brice, applying the business judgment rule. On appeal, the district court affirmed: Wholly-owned subsidiary status – Under German corporate practice, the unissued 5% treasury shares didn’t change that Schletter Germany held 100% of outstanding stock. Brice’s fiduciary duty was to the parent, so licensing fee decisions could not be a loyalty breach. No Caremark claim – Alleged “red flags” (lack of testing, risky contract terms, inadequate capacity) were hindsight critiques of business risk, not evidence of knowing illegality or bad faith. Business judgment rule applied – The decision to launch G-Max was a rational attempt to address competitive decline, and nothing rebutted the presumption of good faith. Because the business judgment rule shielded Brice, the court did not address his indemnification clause defenses. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document black_v._brice.pdf (266.43 KB) Category Western District

M.D.N.C.: Brown v. First Advantage Background Services Corp. & Ashcott, LLC- Default Judgment for FCRA as to Liability not Damages

M.D.N.C.: Brown v. First Advantage Background Services Corp. & Ashcott, LLC- Default Judgment for FCRA as to Liability not Damages Ed Boltz Mon, 09/08/2025 - 17:34 Summary: When Charles Brown applied for a long-haul truck driving job with a FedEx contractor, he did what every applicant expects—passed the interview and drug test—only to have his offer rescinded after a background check falsely claimed he had felony convictions. The root cause: Defendant Ashcott, LLC, hired by First Advantage to run criminal records searches, (Good Grief!) matched another “Charles Brown” from Philadelphia (with a different middle name and Social Security number) to him, and reported that the match was based on Brown’s *full* name and SSN—something that simply could not be true. Brown sued both First Advantage and Ashcott under the Fair Credit Reporting Act (FCRA). After settling with First Advantage, he pursued a default judgment against Ashcott. The court found Ashcott properly served, that its conduct violated § 1681e(b) by failing to follow reasonable procedures to assure maximum possible accuracy, and that the error was a proximate cause of Brown’s lost job and emotional distress. However, damages were another matter. Brown asked for $100,000 compensatory (for a year’s lost wages and distress) and $100,000 punitive damages. Evidence showed he had other employment until April 2023 and some income thereafter, so his lost wage calculation did not match reality. The court granted default judgment *as to liability*, denied punitive damages for lack of evidence of a willful violation, and set the matter for a damages hearing unless Brown supplements his proof to account for other income during the relevant period. Commentary: The opinion is a tidy reminder for consumer advocates that FCRA liability is not just about “false” reports—it’s about whether the background screener reasonably matched the data. Here, Ashcott claimed a perfect match on SSN when the middle name and SSN were actually different. That misstatement essentially doomed them once they defaulted. From a practice standpoint, this case illustrates: The importance of damages proof: Even with liability conceded, a plaintiff must prove actual damages with specificity, especially if there was other income or mitigation. Bankruptcy attorneys are well familiar with similar challenges when proving lost wages in discharge injunction or stay violation actions. The uphill battle for punitive damages: Without facts showing reckless disregard or intentional misconduct, courts will not presume willfulness from mere negligence. Parallel lessons for bankruptcy cases: Consumer debtors wrongfully denied employment due to inaccurate credit or criminal background reports may have viable FCRA claims, but those claims must be backed by documentary proof of lost earnings and clear causation—especially if those damages will be property of the estate and subject to trustee oversight. The factual irony here is that, had there been a Chapter 13 case, the false report’s economic harm (which would not be protected as under the personal injury exemption) could have impacted the debtor’s ability to fund a plan—yet the litigation and any recovery could also have been estate property. This makes a strong argument for debtor’s counsel to consider FCRA claims not just as side litigation, but as tools to protect the debtor’s fresh start and preserve plan feasibility. With proper attribution, please share this post. Blog comments Attachment Document brown_v._first_advantage.pdf (112.31 KB) Category Middle District

M.D.N.C.: Brown v. First Advantage Background Services Corp. & Ashcott, LLC- Default Judgment for FCRA as to Liability not Damages

M.D.N.C.: Brown v. First Advantage Background Services Corp. & Ashcott, LLC- Default Judgment for FCRA as to Liability not Damages Ed Boltz Mon, 09/08/2025 - 17:34 Summary: When Charles Brown applied for a long-haul truck driving job with a FedEx contractor, he did what every applicant expects—passed the interview and drug test—only to have his offer rescinded after a background check falsely claimed he had felony convictions. The root cause: Defendant Ashcott, LLC, hired by First Advantage to run criminal records searches, (Good Grief!) matched another “Charles Brown” from Philadelphia (with a different middle name and Social Security number) to him, and reported that the match was based on Brown’s *full* name and SSN—something that simply could not be true. Brown sued both First Advantage and Ashcott under the Fair Credit Reporting Act (FCRA). After settling with First Advantage, he pursued a default judgment against Ashcott. The court found Ashcott properly served, that its conduct violated § 1681e(b) by failing to follow reasonable procedures to assure maximum possible accuracy, and that the error was a proximate cause of Brown’s lost job and emotional distress. However, damages were another matter. Brown asked for $100,000 compensatory (for a year’s lost wages and distress) and $100,000 punitive damages. Evidence showed he had other employment until April 2023 and some income thereafter, so his lost wage calculation did not match reality. The court granted default judgment *as to liability*, denied punitive damages for lack of evidence of a willful violation, and set the matter for a damages hearing unless Brown supplements his proof to account for other income during the relevant period. Commentary: The opinion is a tidy reminder for consumer advocates that FCRA liability is not just about “false” reports—it’s about whether the background screener reasonably matched the data. Here, Ashcott claimed a perfect match on SSN when the middle name and SSN were actually different. That misstatement essentially doomed them once they defaulted. From a practice standpoint, this case illustrates: The importance of damages proof: Even with liability conceded, a plaintiff must prove actual damages with specificity, especially if there was other income or mitigation. Bankruptcy attorneys are well familiar with similar challenges when proving lost wages in discharge injunction or stay violation actions. The uphill battle for punitive damages: Without facts showing reckless disregard or intentional misconduct, courts will not presume willfulness from mere negligence. Parallel lessons for bankruptcy cases: Consumer debtors wrongfully denied employment due to inaccurate credit or criminal background reports may have viable FCRA claims, but those claims must be backed by documentary proof of lost earnings and clear causation—especially if those damages will be property of the estate and subject to trustee oversight. The factual irony here is that, had there been a Chapter 13 case, the false report’s economic harm (which would not be protected as under the personal injury exemption) could have impacted the debtor’s ability to fund a plan—yet the litigation and any recovery could also have been estate property. This makes a strong argument for debtor’s counsel to consider FCRA claims not just as side litigation, but as tools to protect the debtor’s fresh start and preserve plan feasibility. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document brown_v._first_advantage.pdf (112.31 KB) Category Middle District

Is Bankruptcy or Loan Modification Better for Stopping Foreclosure in Pennsylvania?

Loan modification and bankruptcy are two different approaches to addressing the threat of foreclosure. Loan modification might only pause foreclosure, while bankruptcy might stop it altogether, and is typically the […]

What is Tenancy by the Entireties Protection in Pennsylvania Bankruptcy?

There are various ways in which a person or multiple people may own a home. Perhaps one of the most common ways is tenancy by the entirety. In short, this […]

Business Bankruptcy Filings Increase by 30%

Inc. is reporting that business bankruptcy filings increased by 30%. The article can be found at https://www.inc.com/melissa-angell/small-business-bankruptcies-surged-3… Michael Hunter of

Bankruptcy Eligiblity is a Moving Target

Don’t sit on your Bankruptcy Eligiblity: It’s a moving target In January, Larry came to talk to me about Chapter 7 bankruptcy eligiblity. He had a car repossession and about $25,000 in charged off credit cards. He was planning to get married and hoped to buy a house in a few years. His fiancé warned […] The post Bankruptcy Eligiblity is a Moving Target appeared first on Robert Weed Virginia Bankruptcy Attorney.

Weekly News – September 5

A deep dive into Spirit Airlines, new guidance issued prohibiting judge shopping, Echostar mega deal surprise, Texas Two Step doesn’t fly in Delaware, and much, much more… Creditor Corner Your…

Leveling the Playing Field

HOW TO LEVEL THE PLAYING FIELD IN FAVOR OF CREDITOR INTERESTS: A CRITICISM OF IN RE ELETSON AND ITS FAILURE TO APPOINT A CHAPTER 11 TRUSTEE By Marc Kirschner &…

How Do Wildcard Exemptions Work in Pennsylvania Bankruptcy?

When you file for bankruptcy, there are many areas of money you have that might be taken and put toward your outstanding debts to clear away as much as possible. […]

Law Review: Hampson, Christopher D., "Bespoke, Tailored, and Off-the-Rack Bankruptcy: A Response to Professor Coordes's 'Bespoke Bankruptcy'"

Law Review: Hampson, Christopher D., "Bespoke, Tailored, and Off-the-Rack Bankruptcy: A Response to Professor Coordes's 'Bespoke Bankruptcy'" Ed Boltz Fri, 09/05/2025 - 16:34 Available at: https://scholarship.law.ufl.edu/facultypub/1234 Abstract: Toward the end of every semester that I teach bankruptcy, I let my students vote on which “non-traditional” insolvency regimes they would like to study, including municipal bankruptcy, sovereign bankruptcy, and financial institutions. What I am really trying to do is convey to the students that the default procedures and substantive rules in Chapters 7 and 11 of the U.S. Bankruptcy Code do not apply to all types of enterprises. Summary: In *Bespoke, Tailored, and Off-the-Rack Bankruptcy: A Response to Professor Coordes’s “Bespoke Bankruptcy”*, Professor Christopher Hampson expands Coordes’s taxonomy of “bankruptcy misfits” into three categories: Off-the-rack bankruptcy – the default Chapters 7 and 11 structure, with liquidation as the constant background threat. Tailored bankruptcy – Congress begins with the Code and tweaks it for a specific group, e.g., Chapter 12 or Subchapter V. Bespoke bankruptcy – a separate statutory regime built from scratch for entities “too important to fail” or whose governance or public role makes the standard model unworkable, e.g., Chapter 9 municipalities, PROMESA territorial cases, or Dodd-Frank bank resolutions. Hampson emphasizes that “misfit” status hinges on substantive differences, not whether the law is located in Title 11. Governance constraints (elected officials in municipalities, regulatory oversight in bank failures) often drive bespoke designs. He notes Coordes’s list of possible candidates—utilities, churches, nonprofits, public universities, mass tort defendants, and tribal corporations—and urges evaluating whether each needs tailoring or a fully bespoke regime. Tailoring is appropriate when standard Code processes suffice with moderate adjustments; bespoke is reserved for when off-the-rack solutions cannot work at all. Commentary: For consumer bankruptcy practitioners, this framework resonates with the Fourth Circuit’s Trantham v. Tate approach, which underscored the flexibility in Chapter 13 to craft nonstandard plan provisions so long as they comply with § 1322(b) and confirmation standards. Hampson’s “tailored” category suggests Congress could—and debtor’s counsel already can—create procedural or substantive adjustments within the Code to better fit certain consumer debtor populations. In other words, *Trantham* opens a door for “micro-tailoring” inside individual cases, while Hampson describes “macro-tailoring” by statute. Potential “bespoke” or “tailored” consumer bankruptcy categories could include: Attorney Fee Only Bankruptcy – Somewhere between a Chapter 7 and a Chapter 13 case that allows for immediate filing of the bankruptcy without payment up-front of attorneys fees and then discharge once those have been paid. This has been haphazardly accomplished with bifurcated fee agreements, low-pay Chapter 13s and conversions. Student loan–heavy debtors – Tailored provisions to permit discharge or structured repayment without undue hardship litigation, potentially modeled on Subchapter V’s streamlined timelines and mediation focus. This includes the b espoke Buchanan provisions, which allow or continue enrollment in IDR plans. Medical debt bankruptcies – Tailored rules prioritizing preservation of access to care, limiting the impact on future insurance coverage, or limiting impact on credit scores due to the innocent nature of the debt. Gig economy/variable income debtors – Tailored income determination and plan modification rules that account for income volatility and avoid serial defaults. Elderly debtors – Bespoke or heavily tailored regimes that protect retirement income and simplify plan administration when debt structure is modest but repayment ability is constrained by age and health. Natural disaster victims – A bespoke chapter (or subchapter) providing extended plan moratoria, expedited lien stripping for uninhabitable homes, and coordinated FEMA/insurance claim handling. Home preservation–focused debtors – Tailored provisions expanding mortgage cure rights beyond § 1322(b)(5), deferred payment of non-exempt equity to unsecured creditors, requiring servicer transparency akin to online access following In re Klemkowski. The mortgage modification programs adopted by many bankruptcy courts across the country, including all three districts in North Carolina are tailored for this. Mass consumer fraud victims – Group Chapter 13 plans combining streamlined proof-of-claim defenses with coordinated recovery from common wrongdoers. Consumer attorneys could, post- Trantham, experiment with nonstandard plan language to simulate these regimes in individual cases—e.g., a “Student Loan Chapter 13” provision requiring mediation and fixed interest amortization; or a “Disaster Recovery Chapter 13” with seasonal payment step-ups. The test will be whether courts view these as permissible tailoring or an impermissible rewrite of the Code. If Congress takes up bespoke consumer bankruptcy, these categories could be codified much like Chapter 12 was for farmers and Sub V for small businesses—starting as an emergency measure and, if successful, becoming a permanent feature of the Code. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document bespoke_tailored_and_off-the-rack_bankruptcy_a_response_to_pro.pdf (245.52 KB) Category Law Reviews & Studies

Law Review (Policy): Lederer, Anneliese and Kushner, Andrew- The Shady Side of Solar System Financing

Law Review (Policy): Lederer, Anneliese and Kushner, Andrew- The Shady Side of Solar System Financing Ed Boltz Thu, 09/04/2025 - 15:56 Available at: https://www.responsiblelending.org/research-publication/shady-side-sola… Executive Summary: Rising energy costs and the increasing environmental threats posed by climate change are causing a growing number of American homeowners to turn to the financial services sector to pay for energy-efficient renovations and upgrades to their homes. This segment of a broader financial market, known as consumer green lending, provides financing for many consumer products designed to have a positive environmental impact and provide potential energy cost savings. As of 2023, 4.4% of all residential homes in the United States had solar power systems installed, with Hawaii, California, and Arizona having the greatest percentages of homes powered by residential solar systems. The solar finance industry is significantly smaller than the mortgage market; however, its reliance on securitization for capital and an estimated $3.89 billion in asset-backed securities represents a growing economic footprint. The clean energy transition in the United States will not succeed and will not be equitable without broad adoption by low-to-moderate income (LMI) consumers. This will require a clear understanding of the consumer benefits of clean energy, as well as effective state and federal consumer protection regulations. Key Findings: Elements of solar financing products and sales processes are identical to those used by predatory subprime lenders in 2007 to target low- and moderate-income and minority borrowers. GoodLeap, Sunlight Financial, Mosaic, Sunrun, and Sunnova together account for 80% of the residential solar loan market, according to the most recently available public estimate. Solar financing agreements often leave homeowners in a worse economic situation than before the door-to-door salesperson visited them. This solar debt elevates the risk that the consumer will lose their home to bankruptcy or foreclosure. The price of the solar system typically is substantially inflated if a consumer finances a system. This allows door-to-door sellers to falsely represent that borrowers are getting financing with a low nominal payment rate when most of the financing cost is hidden in the inflated price of the solar panel system. This markup amount is not revealed to the homeowner, and installers are often forbidden from disclosing the markup. Commentary: For consumer bankruptcy practitioners, the treatment of solar panels and their financing remains a tangle of unresolved issues. In some cases, panels are clearly fixtures subject to mortgage liens; in others, they remain personal property under a UCC-1 filing. Lease and PPA arrangements add another layer, often looking less like ownership and more like a burdensome executory contract. As the CRL report shows, the sales and financing practices themselves can be fertile ground for Truth in Lending, UDTPA, or Holder Rule claims—if the forced arbitration clauses don’t shut the courthouse door. The confusion shows up in bankruptcy schedules and plan treatment. Is the panel lender a mortgage creditor whose collateral is part of the home? Or a creditor secured by personal property with an inflated claim that could be bifurcated or crammed down? Should the system be assumed, rejected, or stripped? And when the financing includes hidden “dealer fees” or an unperfected lien, can we challenge the claim entirely? Courts vary widely in approach, and the law has not settled—meaning that debtors with identical panels may get wildly different outcomes depending on jurisdiction, trustee, and even how the panels were bolted down. Given the aggressive and sometimes predatory nature of solar financing, consumer bankruptcy attorneys should: Scrutinize loan documents for arbitration clauses, hidden fees, and inflated prices used to mask interest rates. Investigate lien perfection—many UCC filings describe the panels but don’t comply with fixture filing requirements. Consider whether claims are subject to setoff or recoupment based on state UDAP laws or the FTC Holder Rule. Prepare to educate the court on why a purported “fixture” might still be personal property—and why that matters for valuation and claim treatment. Subject solar panel finance creditors to discovery to obtain accurate details about both their lending practices and the resale value for used solar panels. In short, solar panel financing in consumer bankruptcy is like the early days of mortgage securitization litigation—confusing, inconsistent, and ripe for both creditor overreach and debtor defense. Until appellate guidance or legislative reform arrives, practitioners will need to navigate a patchwork of interpretations and be ready to litigate classification, lien validity, and consumer protection violations alongside the usual plan feasibility and disposable income issues. Finally, CRL and the authors of this report would perform a great public service by extending their investigation into how solar panel debt is treated in consumer bankruptcy cases nationwide. Review of the wealth of data available in bankruptcy cases through PACER could shed light on the inconsistent treatment of these claims, expose whether predatory financing survives discharge, and inform both policymakers and courts on how best to protect debtors caught between green energy aspirations and high-pressure, high-cost financing schemes. NACA Webinar: What to Do with Solar Panels in Bankruptcy. With proper attribution, please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document solar_panels_in_bankruptcy_flowchart.pdf (30.07 KB) Document crl-shady-side-solar-financing-jul2024.pdf (945.47 KB) Category Law Reviews & Studies