Bifurcated Fee Arrangements Now Seem Impossible in South Carolina
Affirming the bankruptcy court, the district court found that bifurcated fees are excessive and that inadequate disclosures violated Sections 526 and 528.
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Seventh Circuit to Rule on Paying ‘13’ Trustees if Dismissal Precedes Confirmation
Within the next year, four circuits will have ruled on a split where some lower courts pay chapter 13 trustees and others don’t when dismissal precedes confirmation.
Journal Issue
Bankruptcy Code
Bankruptcy Rule
Denial of Withdrawal of the Reference Isn’t a Final, Appealable Order, Circuit Says
An appeal from an interlocutory order can’t be made final by the district court’s entry of judgment on the first appeal.
Aggressive Bankruptcy Planning Results in Loss of Discharge
An election for having a tax refund applied to the following year’s taxes can result in the loss of discharge.
Disagreement on Bankruptcy Court’s Jurisdiction to Give ‘Innocent Spouse’ Relief
Bankruptcy Judges Marvin Isgur and Gregory Taddonio disagree on whether the bankruptcy court has subject matter jurisdiction to grant ‘innocent spouse’ relief to a debtor.
‘Preponderance’ Replaced ‘Clear and Convincing’ on Adoption of the Bankruptcy Code
The Seventh Circuit explained how preponderance of the evidence became the standard of proof for turnovers and dischargeability when the Bankruptcy Code replaced the Bankruptcy Act.
Bankruptcy Doesn’t Automatically Accelerate a Mortgage, State Supreme Court Says
A discharge in bankruptcy by itself does not start the statute of limitations running on a defaulted mortgage, Colorado Supreme Court holds.
Small Business Subchapter V’s Increase 81 Percent Year-over-Year
Small business filings, captured as subchapter V elections within chapter 11, increased 81 percent to 157 in April 2023 from 87 in April 2022, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. All chapter 11 filings increased 32 percent in April 2023 to 277 from the 210 filings in April 2022. Overall commercial filings increased slightly in April 2023 to 1,820 from 1,785 in April 2022. The 35,479 total U.S. bankruptcy filings in April 2023 were a 9 percent increase from the April 2022 total of 32,530. Individual bankruptcy filings were 33,659 in April 2023, registering a 10 percent increase from the April 2022 individual total of 30,745. The number of individuals filing for chapter 13 increased 14 percent to 13,404 in April 2023 from the 11,730 chapter 13 filings in April 2022. The substantial year-over-year increase in subchapter V elections reflects statutory developments that took place last year. The $7.5 million debt eligibility limit established by the CARES Act of 2020 (and renewed annually by subsequent laws) sunset in late March 2022 back to the $2,725,625 level established by the "Small Business Reorganization Act of 2019," which led to a drop in subchapter V elections in April and May 2022. The "Bankruptcy Threshold Adjustment and Technical Corrections Act" was quickly enacted in June 2022 to restore the debt eligibility limit for small businesses back to $7.5 million while also increasing the debt limit for individual chapter 13 filings to $2.75 million and removing the distinction between secured and unsecured debt for that calculation. The increased eligibility limits for both subchapter V and chapter 13 are currently set to sunset on June 21, 2024. ABI has formed a Subchapter V Task Force to study small business reorganizations and make recommendations in a report to be released in April 2024.
Journal Issue
Bankruptcy Code
Bankruptcy Rule