Consumer Bankruptcy

Home Retention and Loss Mitigation Update

Consumer Law Update 2009

Hot Topics in Chapter 13 Cases

Cramdowns Now and New: Ins and Outs of Chapter 13 Mortgage Cramdowns

Hot Consumer Topics in Chapter 7

Chapter 13 Plan Cannot Avoid Lien Absent Adversary Proceeding

By: Michael Buccino

St. John's Law Student

American Bankruptcy Institute Law Review Staff

In SLW Capital, LLC v. Mansaray-Ruffin (In re Mansaray-Ruffin), the Third Circuit held that a creditor’s lien could not be avoided through the confirmation of a Chapter 13 plan that treated the claim as an unsecured claim.

[1]

  Notwithstanding the importance of finality in bankruptcy proceedings and statutory language binding creditors to the terms of a confirmed plan, since the Federal Rules of Bankruptcy Procedure require an adversary proceeding to invalidate liens, the order confirming the confirmed plan was not res judicata with respect to the status of the creditor’s lien.

[2]

Consumer Practitioners: How's Life under BAPCPA? An Update on Post-BAPCPA Consumer Case Law

Keep Your License: Ethical Issues for Consumer Bankruptcy Attorneys, Debtor and Creditor

How to Avoid Problems with the Trustee: Consumer Best Practices

In re Bursztyn and the Issue of Search and Seizure of Debtor Assets

By: Craig Kavanagh

St. John's Law Student

American Bankruptcy Institute Law Review Staff

Recently, the New Jersey Bankruptcy Court, in In re Bursztyn,

[1]

held that Fourth Amendment limitations applied to a trustee’s conduct in seeking to search a debtor’s residence with the intention of seizing undisclosed assets.  However, the Court reasoned that, by filing bankruptcy, the debtor had reduced her reasonable expectations of privacy

[2]

and the Court held that the trustee’s actions did not exceed the Fourth Amendment standards of reasonableness.

[3]

In Bursztyn, based on an investigation of court records of the debtor's recent divorce, the trustee suspected that the debtor was hiding valuable jewelry and artwork that was not listed in the debtor’s bankruptcy petition or financial affairs statements.

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The trustee requested from the Court, ex parte, an order allowing her to search the debtor’s home with the hopes of obtaining the art and jewelry that now belonged to the estate.

[5]

The Court granted authorization, and the United States Marshals Service and the trustee served the order upon the debtor at her residence, and proceeded to search her bedroom and closets.

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The search uncovered nearly two hundred pieces of fine jewelry and ten works of art, valued at nearly $250,000.

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Claiming that the search and seizure violated her Fourth Amendment rights, the debtor sought to suppress all evidence uncovered by the trustee’s search.

[8]