Sixth Circuit Permits Nondebtor Family Members to Continue the Family Business
Circuit Judge Sutton shied away from making a wife liable for her husband’s debts, even though the wife carried on the husband’s farming business.
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Majority of the People Arrested for Capitol Riot Had a History of Financial Trouble
Nearly 60 percent of the people facing charges related to the Capitol riot showed signs of prior money troubles, including bankruptcies, notices of eviction or foreclosure, bad debts, or unpaid taxes over the past two decades, according to a Washington Post analysis of public records for 125 defendants with sufficient information to detail their financial histories. The group’s bankruptcy rate — 18 percent — was nearly twice as high as that of the American public, The Post found. A quarter of them had been sued for money owed to a creditor. And 1 in 5 of them faced losing their home at one point, according to court filings. While no single factor explains why someone decided to join in, experts say, Donald Trump and his brand of grievance politics tapped into something that resonated with the hundreds of people who descended on the Capitol in a historic burst of violence. “I think what you’re finding is more than just economic insecurity but a deep-seated feeling of precarity about their personal situation,” said Cynthia Miller-Idriss, a political science professor who helps run the Polarization and Extremism Research Innovation Lab at American University, reacting to The Post’s findings. “And that precarity — combined with a sense of betrayal or anger that someone is taking something away — mobilized a lot of people that day.” The financial missteps by defendants in the attempted insurrection ranged from small debts of a few thousand dollars more than a decade ago to unpaid tax bills of $400,000 and homes facing foreclosure in recent years. Some of these people seemed to have regained their financial footing. But many of them once stood close to the edge.
BAP Adheres to ‘Person Aggrieved’ Despite Dicta from the Sixth Circuit
The Supreme Court and the Sixth Circuit both questioned the continuing validity of doctrines of prudential standing, such as ‘person aggrieved.’
January Total, Consumer and Business Bankruptcy Filings Decrease More Than 40 Percent over Last Year
Total, consumer and business filings fell more than 40 percent in January 2021 compared to last year, according to data provided by Epiq. Total filings in January 2021 were 32,298 representing a 45 percent decrease from the January 2020 filing total of 58,160. Consumer filings registered a similar decrease as the 30,263 were 45 percent less than the consumer total in January 2020 of 54,600. The 2,035 commercial filings in January 2021 were 43 percent less than the 3,560 registered in January 2020. Commercial chapter 11 filings in January 2021 totaled 479, a 24 percent drop from the 631 commercial chapter 11 filings in January 2020.
January Total, Consumer and Business Bankruptcy Filings Decrease More Than 40 Percent over Last Year
Alexandria, Va.— Total, consumer and business filings fell more than 40 percent in January 2021 compared to last year, according to data provided by Epiq. Total filings in January 2021 were 32,298 representing a 44 percent decrease from the January 2020 filing total of 58,160. Consumer filings registered a similar decrease as the 30,263 were 45 percent less than the consumer total in January 2020 of 54,600. The 2,035 commercial filings in January 2021 were 43 percent less than the 3,560 registered in January 2020. Commercial chapter 11 filings in January 2021 totaled 479, a 24 percent drop from the 631 commercial chapter 11 filings in January 2020.
"Continued government relief programs, moratoriums and lender deferments have helped families and businesses offset the challenges of elevated unemployment rates and growing debt loads during the COVID-19 pandemic," said ABI Executive Director Amy Quackenboss. “As further stabilization efforts are considered by Congress, an extension of the eligibility limit for small businesses electing to file for subchapter V under chapter 11 will provide vulnerable businesses with a proven shield in financially uncertain times.”
The Small Business Reorganization Act of 2019 (SBRA), in effect as of February 19, 2020, was enacted to provide Main Street business debtors with a more streamlined path for restructuring their debts. In response to the economic distress caused by the COVID-19 coronavirus pandemic, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act; P.L. 116-136) was enacted on March 27, 2020, increasing the eligibility limit for small businesses looking to file under SBRA's subchapter V from $2,725,625 of debt to $7,500,000. The threshold will return to $2,725,625 on March 27, 2021.
Commercial chapter 11 filings in January 2021 represented a 22 percent increase from the 394 filings recorded in December 2020. Total filings for January decreased 6 percent compared to the 34,341 total filings in December 2020. Total noncommercial filings for January also decreased 6 percent from the December 2020 noncommercial filing total of 32,144. January’s commercial filing total represented a 7 percent decrease from the December 2020 commercial filing total of 2,197.
The average nationwide per capita bankruptcy filing rate (total filings per 1,000 population) was 1.25 for January, a slight decrease from the 1.71 rate registered in January 2020. The average daily filing total in January 2021 was 1,700, a 39 percent decrease from the 2,770 total daily filings registered in January 2020. States with the highest per capita filing rates (total filings per 1,000 population) through January 2021 were:
1. Delaware (4.88)
2. Alabama (3.06)
3. Nevada (2.48)
4. Tennessee (2.45)
5. Georgia (2.13)
For further information about the statistics or additional requests, please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Epiq is a leading provider of managed technology for the global legal profession. Epiq offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds. Epiq’s clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq, please visit https://www.epiqglobal.com/en-us.
Judge Kendig Implies that Failure to Run a Lien Search is Tantamount to Malpractice
The debtors’ lawyer’s lack of diligence allowed the creditor to invoke laches and beat a belated motion to avoid a lien that impaired a homestead exemption.
Senate Bankruptcy Bill Takes Aim at Medical Debt
A group of Democratic senators proposed new legislation yesterday that would provide relief to individual debtors who file for bankruptcy due to medical costs or who have lost their jobs and health insurance, Law 360 reported. The Medical Bankruptcy Fairness Act of 2021 was proposed by Sen. Sheldon Whitehouse (D-R.I.) and co-sponsored by Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), and Richard Blumenthal (D-Conn.). It would streamline bankruptcy procedures for individual debtors whose financial troubles were caused by medical debt or public health-related shutdowns. Specifically, the bill would eliminate a requirement that debtors undergo credit counseling when they file for bankruptcy, which Sen. Whitehouse said makes little sense for people seeking court protection because of unanticipated medical costs that are largely out of their control. It also would significantly expand the dischargeability of student loan debt, which currently requires a debtor to pass a high bar of hardship to obtain. An increase in the protected amount of home equity to $250,000 for an individual debtor is also included in the proposal. Whitehouse has proposed similar legislation at least three times, with measures introduced in 2014, 2016 and most recently in July 2020 failing to come to a vote in the Senate. Warren was a co-sponsor of all three of the previous efforts.
Debtors Win in District Court: They Can Avoid Judicial Liens on Impounded Cars
Car owners lost in Fulton but won when a Chicago district judge affirmed and ruled that debtors may avoid judicial liens on impounded cars.