Last week I had my very first trial and we won, discharging student loans!
http://www.prweb.com/releases/2012/6/prweb9652894.htm
— Christine A. Wilton, Esq. Law Office of Christine A. Wilton
All posts tagged bankruptcy
Student Loan Victory
Supreme Court Stat Pack
Here are fascinating facts about the Supreme Court this last term. Here is a five-page summary. Both of these can be found on the Scotusblog.
Judge Neil Bason Hearing Times to Change
Judge Bason News:
Starting with the 8/30 Calendar, the confirmation hearings will begin at 9:00 a.m.
Aki Koyama
Response to Prof. Scarberry re Reaffirmations
Hi Jon,
I read Mark’s summary. I think that although we reach opposite conclusions, we don’t disagree on the analysis of the issue.
However, there is a long line of cases which I cited in my article that support the position that provided the debtor states an intention to reaffirm, cooperates with creditor in executing reaffirmation K, and attends reaffirmation agreement then ride-though exists if the judge denies the agreement.
11 U.S.C. §§362(h)(1)(a), 521(a)(2)(A), 521(a)(2)(B),521(a)(6)(B), 521(d). In re Perez, 2010 Bankr. LEXIS 2229, at *29 (Bankr. D. N.M. July 12, 2010) (The court held that §521(a)(2)(B) does not require the debtor toconsummate an enforceable reaffirmation agreement,since whether the agreement is enforceable depends on factors outside the debtor’s power or control, but only to do all that is within the power and control of the debtor.). See also In re Moustafi, 371 B.R. 434, 438 (Bankr. D. Ariz. 2007); In re Husain, 364 B.R. 211, 219 (Bankr. E.D. Va. 2007); In re Barron, 441 B.R. 131, 137 (Bankr. D. Ariz. 2010); In re Chim, 381 B.R. 191, 198 (Bankr. D. Md. 2008). In re Hardiman, 398 B.R. 161, 187 (E.D. N.C.2008) (The court held that since the debtor had alreadycomplied with §§362 and 521, the remaining language stating, “[n]othing in this title shall prevent or limit the operation of an [an ipso facto clause]” does not apply.); In re Perez, 2010 Bankr. LEXIS 2229, at 40. The same analysis should be applied when reading the language used later in §521(d).
As for language in 521(d), the Hardiman case sets forth that this provision only applies when the debtor fails to do something required after the passage of BAPCPA which basically requires the debtor to:
1) State an intention to reaffirm 2) Cooperate with creditor in executing and sending reaffirmation agreement back to creditor (This may be something debtors and debtor’s counsel may want to document in case creditor tries to claim debtor did not do this); and 3) Attend the reaffirmation hearings.
Reaffirmation Discussion: Can the auto lender pick up the vehicle after the Court refuses to approve the reaffirmation? Prof. Scarberry thinks so.
From a discussion from another listserve: (Remember Prof. Scarberry is brilliant but creditor oriented).
Looking for some suggestions. We’re finding that most car lenders won’t repo and will accept tender of payments if debtors comply with all requirements of 362(h) and 521(a)(2) but the reaff is denied based on undue hardship. One lender – San Diego County Credit Union – simply refuses tender of payment after the reaff is denied, and then picks up the car after discharge.
For those of you at NACBA in San Antonio less than two months ago, Bankruptcy Judge Eileen Hollowell of Arizona spoke on reaffs and “ride through”. Her Moustafi opinion essentially allows ride-through in the above circumstances, and her form Order was included in the NACBA materials. In her form order, she specifically orders the creditor to continue accepting payments.
Here’s where I get lost. Last year, there was a San Diego County Credit Union case that went up to the BAP. Judge Hollowell was on that BAP panel which held that:
…a creditor does not violate the Bankruptcy Code by refusing to accept payments tendered by a debtor. Additionally, we did not find any other federal law that may apply.
If 521(d) (which makes ipso facto default clauses unenforceable) is inapplicable in a case because debtors have fully complied with 362(h) and 521(a)(2), isn’t acceptance of tender implicit – even mandatory – in the terms of an otherwise enforceable contract?
I now have a debtor with a denied reaff, sufficient funds in my trust account from every post-petition refusal of tender, and a guaranteed repo in a few days when the discharge issues.
Gary Holt
San Diego
Prof. Katie Porter to Speak at cdcbaa Program June 23, 2012
Next cdcbaa MCLE Program is sure to be a hit:
*Bankruptcy Mythbusters* *June 23, 2012*
*Southwestern Law School – 3050 Wilshire Boulevard – Westmoreland Building – 3rd Floor*
Panelist: Katherine Porter, A UC Irvine Law Professor.
General Meeting: 10:30am, CLE 11:00am-1:00pm
Many of you may know Prof. Porter as a UC Irvine Law Professor who was recently named by Attorney General Kamala Harris to serve as monitor of the mortgage settlement between California and five of the nation’s largest banks. She is a nationally recognized expert in commercial and consumer law, has written several research articles taking aim at the banks and loan servicers for their [okay I’ll say it] FRAUD. She is well versed in the mortgage crisis from a consumer perspective. Prof. Katie Porter CV
On October 15, 2011 Prof. Porter presented her Bankruptcy Mythbusters program at the National Conference of Bankruptcy Judges and received great reviews by some of our own judges and was mentioned in this blog article: National Conference of Bankruptcy Judges–10/15/2011 Mythbusters, by Stephen Sather. This article is only a glimpse of what’s to come at our event. This should be very enlightening.
She has a book, Broke: How Debt Bankrupts the Middle Class by Stanford Press, 2012. Those of us that read and/or write blogs know her contributions to Credit Slips blog as a co-founder and contributor.
By clicking on any of the links provided herein you will find plenty of information regarding her contributions to consumers, her country and our practice. We are certainly privileged to have her as our guest for our next MCLE event.
See you all there!
— Christine A. Wilton, Esq. Law Office of Christine A. Wilton
GMAC Mortgage Sale Pleadings
You can access the sale pleadings here. The motion is 330 pages and will tell you more than you ever wanted to know about this business and includes the actual Asset Purchase Agreements. The hearing on the proposed sale is June 18, 2012. If you would like to bid on the assets, you have until September 14 to do so. The proposed breakup fee to the “stalking horse” Nationstar is $72 million.
Attorneys Fees Gone Amuck
What can I say? Ted Olsen, partner at Gibson, Dunn & Crutcher, known for his part in the Bush v. Gore fiasco in 2000, and for his part in the Perry – same sex marriage case in California – and Prop 8 – is billing $1,800 per hour for his part in a chapter 11 case. As Jacqueline Palank writes in the WSJ Bankruptcy Blog:
Bankruptcy attorneys, as we’ve noted, also belong to the exclusive but growing $1,000-or-more club, although their presence is somewhat more controversial given the distressed companies they’re representing. Bankruptcy tends to be where we encounter top-dollar fees—like Theodore Olson’s stunning $1,800 hourly rate in the LightSquared Chapter 11 case—because they’re subject to a federal judge’s approval and therefore are easily visible in publicly filed court papers.
According to the same article, there are now some 700 or so partners who bill $1,000 per hour or more in bankruptcy cases.
Corporate Fraud is Discharged in Chapter 11
I found out the hard way that corporate fraud is discharged in chapter 11 (provided of course that a plan is confirmed that is not a liquidating plan). I say the hard way because I advised Judge Wayne Johnson recently that I was going to file a non-dischargeability complaint in the corporate chapter 11 and he said something like, “you can’t do that,” and I responded something like, “Oh yes I can.” He then read me sections 523 and 1141 and I backed off and promised to review the code before filing anything. The issue came up last week when someone posted the same question on a listserve and Prof. Mark Scarberry from Pepperdine responded explaining the reasoning behind the rule.
Mark wrote:
Section 523(a) applies, by its terms, only to debtors who are individuals (flesh-and-blood human beings). Section 523(a) refers to section 1141 and thus applies to chapter 11 discharges of individuals. Section 1141(d)(2) confirms that result by providing that the chapter 11 discharge does not discharge an individual debtor from debts that are excepted from the discharge by section 523.
Section 727 applies only in chapter 7 cases. See section 103(b). (Note that the exceptions from discharge in section 523(a) are irrelevant in a chapter 7 case where the debtor is not an individual, because section 727(a)(1) prevents any such non-individual debtor from receiving a chapter 7 discharge.)
Here is my best understanding of the policy behind the non-applicability of section 523(a) to non-individual chapter 11 cases.
The Section 1111(b) Election
I promised the folks who attended the Nuts & Bolts Program at UWLA yesterday that I would post my article on the Section 1111(b) election. The Section 1111 fin
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