Consumer Bankruptcy

Courts Should Apply Statutory Impairment Formula for a Debtor to Avoid a Lien on Co-Owned Property

Dec 2024

Child Tax Credits: Are They Fully or Partially Exempt Under State Law?

Tenth Circuit will be deciding whether an entire child tax credit is exempt or only a pro rata portion.

Trustees’ Commissions Are Based on Distributions Made to Co-Owners of Property Sold

Bankruptcy courts are divided on whether the calculation of a trustee’s commissions includes distributions made to co-owners of property that the trustee has sold.

Faculty Biographies (2024 Delaware Views from the Bench)

Two Courts Rule on Chapter 7 Debtors’ Standing for Objections to Sales and Claims

Virginia’s Judge Keith Phillips sides with courts that bar lenders from cutting deals with trustees to eliminate debtors’ homestead exemptions.

Third Circuit Has a Broad View of ‘Related To’ Jurisdiction After Plan Confirmation

A post-confirmation lawsuit to generate funds to pay a chapter 13 plan establishes ‘related to’ jurisdiction for noncore claims.

Unclear Guidance Within the Fourth Circuit Renews a Question of Whether Firearms Should Be Exemptible from the Bankruptcy Estate

The primary purposes of the bankruptcy process are to maximize the payments to a debtor’s creditors and provide debtors with a fresh start.[1] At first glance, the importance of firearm ownership appears unrelated to satisfy the purposes of the bankruptcy process. However, without the ability to exempt essential property from creditors, debtors would be left without the ability to achieve success with a renewed start. The next question then becomes, are firearms essential personal property?

The Wrath of Res Judicata: A Creditor’s Cautionary Tale

In In re Smith, [1] the Third Circuit reminded consumer bankruptcy practitioners of the wrath of res judicata. The debtor owned an encumbered rental property with an assignment of rents to her mortgage lender. The debtor’s proposed chapter 13 plan included a cramdown of the mortgage lender’s claim that reduced the secured portion of the claim from $150,000 to $95,000 — the value of the collateral. The plan further provided that the payment of rents would pay down the secured portion of the lender’s claim.

Even if Ineligible for Chapter 13, Ninth Circuit Says the Debtor Can Still Dismiss

In a split decision, the Ninth Circuit majority held that a chapter 13 debtor has the right to dismiss under Section 1307(b) before the bankruptcy court decides whether the filing was in good faith.