Bankruptcy Workshop: Season 3, Episode 10:

Unintended consequences at work: Eleventh Circuit says debt paid directly to creditor by Chapter 13 debtor is not “provided for” by the plan and is not discharged.

In re Dukes, No. 16-16513, 2018 WL 6367176 (11th Cir. Dec. 6, 2018) (Pryor, Carnes, Conway). / Ch13online Bulletin

Abandoning Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508 (4th Cir. 1997), the en banc Fourth Circuit holds that § 1322(c)(2) empowers Chapter 13 debtors to modify, bifurcate and cram down “short-term” mortgages.

Hurlburt v. Black, No. 17-2449, 2019 WL 2237966 (4th Cir. May 24, 2019) (en banc).

Bankruptcy Workshop: Season 3, Episode 9:

Good Chapter 13 practice includes delaying the vesting effect of confirmation in § 1327(b), notwithstanding a recent Seventh Circuit decision to the contrary.

In re Steenes, Nos. 17-3630, 17-3663 & 17-3664, 2019 WL 1198901 (7th Cir. Mar. 14, 2019) (Easterbrook, Rovner, Hamilton).

In re Heath, 115 F.3d 521 (7th Cir. 1997). / Ch13online Bulletin

A creative reading of “compensation” in § 330(a)(4)(B) grants bankruptcy courts discretion to reimburse filing fees and other expenses advanced by debtors’ counsel.

McBride v. Riley (In re Riley), No. 18-30535, 2019 WL 2082949 (5th Cir. May 13, 2019) (Reavley, Elrod, Willett).

Bankruptcy Workshop: Season 3, Episode 8:

Pawnbrokers may be winning the battle to nullify the powers of debtors in reorganization cases — with chilling implications.

Title Max v. Northingon (In re Northington), 876 F.3d 1302 (11th Cir. 2017) (Wilson, Newsom, Moreno).

In re Sorensen, 2018 WL 3032973 (BAP 9th Cir. June 15, 2018) (Faris, Brand, Taylor).

Bankruptcy Workshop: Season 3, Episode 7:

The courts continue to disagree about how to account for tax expenses and tax refunds in Chapter 13 cases. The Code supports the approach recently approved by the United States Court of Appeals for the Seventh Circuit.

Marshall v. Blake (In re Blake), 885 F.3d 1065 (7th Cir. 2018) (Bauer, Flaum, Manion).

In re Orozco, 2018 WL 2425971 (Bankr. W.D. Tex. May 10, 2018) (Gargotta).

Bankruptcy Workshop: Season 3, Episode 6:

United States Court of Appeals for the Ninth Circuit holds that postpetition HOA fees and assessments are dischargeable at completion of payments in a Chapter 13 case.

Goudelock v. Sixty-01 Association of Apartment Owners (In re Goudelock), 2018 WL 3352883 (9th Cir. July 10, 2018) (Smith, Murguia, Robreno). / Ch13online Bulletin
UNDER § 362(C)(3)(A)

The United States Court of Appeals for the First Circuit is first court of appeals to say that § 362(c)(3)(A) terminates the entire automatic stay 30-days after second petition within a year – as to actions against the debtor, property of the debtor and property of the estate.

Smith v. Maine Bureau of Rev. Servs. (In re Smith), No. 18-1573, 2018 WL 6520887 (1st Cir. Dec. 12, 2018) (Lynch, Stahl, Barron). / Ch13online Bulletin

Misunderstanding the history and structure of Chapter 13, the United States Court of Appeals for the Eleventh Circuit holds that a plan provision for the payment of a long-term mortgage directly by the debtor means the mortgage is “outside” the plan and is not “provided for” for purposes of discharge under § 1328(a). In an alternative holding, discharge of mortgage paid directly by debtor would violate protection from modification in § 1322(b)(2).

Dukes v. Suncoast Credit Union (In re Dukes), No. 16-16513, 2018 WL 6367176 (11th Cir. Dec. 6, 2018) (Pryor, Carnes, Conway). / Ch13online Bulletin

United States Court of Appeals for the Ninth Circuit holds that postpetition HOA fees and assessments are dischargeable at completion of payments in a Chapter 13 case.

Goudelock v. Sixty-01 Association of Apartment Owners (In re Goudelock), 2018 WL 3352883 (9th Cir. July 10, 2018) (Smith, Murguia, Robreno).

Bankruptcy Workshop: Season 3, Episode 5:

In Part 3 of this three-part series, CK tries to clean up the messy history of problems with management of HOA fees and assessments in Chapter 13 cases.

River Place East Housing Corp. v. Rosenfeld (In re Rosenfeld), 23 F.3d 833 (4th Cir. 1994).

In re Peterson, 2018 WL 793685 (Bankr. D. Md. Feb. 7, 2018) (Rice).

In re Wiley, 2018 WL 604401 (Bankr. D. Md. Jan. 26, 2018) (Rice).

Bankruptcy Workshop: Season 3, Episode 4:

In Part 2 of this three-part series, two cases from the same court illustrate many problems with management of post-petition HOA fees and assessments in Chapter 13 cases.

In re Peterson, 2018 WL 793685 (Bankr. D. Md. Feb. 7, 2018) (Rice).

In re Wiley, 2018 WL 604401 (Bankr. D. Md. Jan. 26, 2018) (Rice).

Bankruptcy Workshop: Season 3, Episode 3:

Homeowners’ association fees and assessments – both pre- and post-petition – are a complex problem in Chapter 13 practice, made more so by conflicting bankruptcy and state law considerations.

River Place East Housing Corp. v. Rosenfeld (In re Rosenfeld), 23 F.3d 833 (4th Cir. 1994).

In re Rosteck, 899 F.2d 694 (7th Cir. 1990).

Bankruptcy Workshop: Season 3, Episode 2:

Confidential settlements have become all too common in bankruptcy practice; the Code, rules and caselaw don’t support “No Seal, No Deal.”

In re Thomas, 2018 WL 1162523 (Bankr. E.D. Ky. March 1, 2018) (Wise).

Bankruptcy Workshop: Season 3, Episode 1:

Bankruptcy Rule 3002.1: How it is supposed to work, with emphasis on burdens of proof and the importance of state law.

In re Ochab, 2018 WL 1614164 (Bankr. M.D. Ala. March 30, 2018) (Sawyer).


Chapter 13 plan can strip off wholly unsecured junior mortgage lien using §§ 1322(b)(2) and 506(a) without regard to whether creditor has filed a proof of claim.

Burkhart v. Grigsby, No. 16-1971, 2018 WL 1526628 (4th Cir. Mar. 29, 2018) (King, Diaz, Shedd).


Distinguishing (poorly) United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (2010), pawnbroker is not bound by confirmation of plan that paid its title pawn in full with interest as a secured claim because pawnbroker filed a preconfirmation motion for stay relief; pawned car “dropped out” of Chapter 13 estate “automatically” when state law redemption period expired postpetition, nullifying the power to modify in § 1322(b)(2).

Title Max v. Northington (In re Northington), Nos. 16-17467 & 16-17468, 2017 WL 6276001 (11th Cir. Dec. 11, 2017) (Wilson, Newsom, Moreno).


District court applies Mediofactoring v. McDermott (In re Connolly North America, LLC), 802 F.3d 810 (6th Cir. Sept. 21, 2015), to Chapter 13. Creditor can recover attorney fees and costs as administrative expenses under 11 U.S.C. § 503(b)(3)(D) for a “substantial contribution” — here, successfully objecting to exemptions — in a Chapter 13 case. Sharkey v. Stevenson & Bullock, PLC (In re Sharkey), No. 17-11237, 2017 WL 5476486 (E.D. Mich. Nov. 15, 2017) (Borman).

Bankruptcy Workshop: Season 2, Special Episode:
"(ALMOST) Banned in Las Vegas"

Director’s Cut of Marijuana and Bankruptcy video banned by National Conference of Bankruptcy Judges


Overruling parts of Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003), and Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002), when a debtor fails to disclose a cause of action, “to determine whether . . . inconsistent statements were calculated to make a mockery of the judicial system, a court should look to all the facts and circumstances of the particular case. . . . We overrule the portions of Burnes and Barger that permitted the inference that a plaintiff intended to make a mockery of the judicial system simply because he failed to disclose a civil claim.” Slater v. United States Steel Corp., No. 12-15548, 2017 WL 4110047 (11th Cir. Sept. 18, 2017) (en banc). (read the full text of this opinion).

Bankruptcy Workshop: Season 2, Episode 3:
"Up in Smoke"

The Executive Office of the United States Trustee has inappropriately instructed Chapter 13 and Chapter 7 Trustees that they cannot administer marijuana assets in bankruptcy cases.

Bankruptcy Workshop: Season 2, Episode 2:
"The Lien is Void"

The lien securing a disallowed arrearage claim filed by a mortgage servicer is voided by § 506(d).

In re Mason, 2017 WL 394344 (Bankr. S.D. Miss. Jan. 27, 2017) (Ellington).

Bankruptcy Workshop Special Edition
"NACTT Meets Rachel Jackson"

Don’t miss the NACTT Annual Meeting in Seattle, July 12–15, 2017. CK says: Consider bidding on the Hermitage Box to benefit the NACTT Foundation.

Bankruptcy Workshop: Season 2, Episode 1:
"Blowing the Whistle
on the U.S. Trustee Budget

The proposed Trump budget doubles bankruptcy filing fees to fund the U.S. Trustee Program. Does this make sense when bankruptcy filings are half of what they were?

Bankruptcy Workshop: Season 1, Episode 12:
"Sewer Sponte III: When is Silence Acceptance?"

Dicta in Espinosa creates impossible quandary: When does creditor silence relieve bankruptcy judges of “obligation” to correct defects in Chapter 13 plans?

In re Bea, 533 B.R. 283 (B.A.P. 9th Cir. 2015) (Dunn, Kirscher, Taylor).

In re Brown, 2016 WL 6440364 (Bankr. N.D. Ind. Aug. 2, 2016) (Grant).

In re Smiley, 2016 WL 6440365 (Bankr. N.D. Ind. Aug. 10, 2016) (Grant).

Bankruptcy Workshop: Season 1, Episode 11
Sewer Sponte II: The Dark Side of Espinosa

Dicta in Espinosa has inspired some bankruptcy judges to deny confirmation of Chapter 13 plans when no creditor objects.

United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L.Ed.2d 158 (2010).

Bankruptcy Workshop: Season 1, Episode 10

Recent cases reveal a new generation of bankruptcy judges inclined to raise issues sewer sponte in Chapter 13 cases.

In re Sierra, No. 15-70603, 2016 WL 6304620 (Bankr. S.D. Tex. Oct. 27, 2016) (Rodriguez).

In re Waring, No. 16-12624-TBM, 2016 WL 4440378 (Bankr. D. Col. Aug. 22, 2016) (McNamara).

Bankruptcy Workshop: Season 1, Episode 9

The mortgage servicing industry is broken. The results show up in Chapter 13 cases. The bankruptcy community has reached the end of its patience.

In re Gravel, No. 11-10112, 2016 WL 4765773 (Bankr. D. Vt. Sept. 12, 2016) (Brown).

Bankruptcy Workshop: Season 1, Episode 8

What are the entitlements of creditors when a Chapter 13 debtor receives an inheritance more than 180 days after the petition? Is this just an issue at modification or is something bigger hidden here?

In re Portell, No. 12-44058-13, 2016 WL 4734321 (Bankr. W.D. Mo. Sept. 9, 2016)(Federman).

Bankruptcy Workshop: Season 1, Episode 7

Balloon payment of secured debt is alive and well notwithstanding “equal payments” requirement in § 1325(a)(5)(B)(iii)(II).

In re Cochran, No. 15-52314-AEC, 2016 WL 4575557 (Bankr. M.D. Ga. Sept. 1, 2016)(Carter).

Bankruptcy Workshop: Season 1, Episode 6

Seventh Circuit broadly empowers bankruptcy courts to modify plans after confirmation to increase payments to creditors when circumstances improve.

In re Powers, No. 14-CV-03128, 2016 WL 3443342 (7th Cir. June 23, 2016) (Bauer, Williams, Adelman).

Bankruptcy Workshop: Season 1, Episode 5

Can an underwater lienholder escape lienstripping in a Chapter 13 case by not filing a proof of claim? Hopefully, the Fourth Circuit won’t buy that outcome.

In re Burkhart, et al., Civ. No. PJM 14-315 (D. Md. July 26, 2016).

Bankruptcy Workshop: Season 1, Episode 4

There is good news and bad news about what happens when a car lender or a home mortgage holder fails or chooses not to file a proof of claim. Discussing:

In re Jones, No. 15-11460, Decision on Motion for Relief from Stay (Bankr. N.D. Ind. Aug. 5, 2016) (Grant).

In re Brown, No 16-10216, Decision and Order Denying Confirmation (Bankr. N.D. Ind. Aug. 2, 2016) (Grant).

In re Pajian, 785 F.3d 1161 (7th Cir. 2015).

Bankruptcy Workshop Online at!

As you may have heard, is soon to become! We are pleased to announce the first of many new features is now online!

Welcome to Bankruptcy Workshop, hosted by Keith Lundin with his buddy CK. The first video — Season 1, Episode 1 — debuted at the NACTT Annual Seminar in Philadelphia. It introduces you to the Workshop, explains the name change and has an unprecedented unmuzzling ceremony of Cardboard Keith (CK). Then we get right down to business with two new must-see videos that provide insight on topics that continue to bedevil the courts: what to do with claims for stale debts, and dismissal doldrums after Harris:

Season 1, Episode 3: Dead Debt Trifecta — The cases discussed are three FDCPA decisions from the 11th Circuit getting it right contrasted with wrong turns by the 7th and 8th Circuits: Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014); Johnson v. Midland Funding, LLC, 823 F.3d 1334 (11th Cir. 2016); Bazemore v. Jefferson Capital Systems, LLC, 2016 WL 3608961 (11th Cir. July 5, 2016); Owens v. LVNV Funding, LLC, 2016 WL 4207965 (7th Cir. Aug. 10, 2016); and Nelson v. Midland Credit Mgmnt., 2016 WL 3672073 (8th Cir. July 11, 2016).

Season 1, Episode 2: Philadelphia Report — The spotlight case here is from the Bankruptcy Court for E.D. Michigan: In re Bateson, 2016 WL 3475613 (Bankr. E.D. Mich. June 23, 2016) (Shefferly).


Stay exception for domestic support collection in § 362(b)(2)(C) does not relieve DSO creditor of binding effect of confirmed plan under § 1327(a); State was in contempt when it intercepted reimbursement payment to debtor after confirmation of plan that provided full payment of DSO. Florida Dep’t of Rev. v. Gonzalez (In re Gonzalez), No. 15-14804, 2016 WL 4245422 (11th Cir. Aug. 11, 2016) (Jordan, Rosenbaum, Siler).

Eleventh Circuit: Bankruptcy Code Does Not Preclude FDCPA Action Based on Proof of Claim for Stale Debt

"We now answer the question left open in Crawford. The Bankruptcy Code does not preclude an FDCPA claim in the context of a Chapter 13 bankruptcy when a debt collector files a proof of claim it knows to be time-barred." Johnson v. Midland Funding, LLC, No. 15-11240 (11th Cir. May 24, 2016) (Martin, Higginbotham, Wilson) (read the full text of this opinion).

Supremes: Fraud Is Broader than Misrepresentation

“The term ‘actual fraud’ in § 523(a)(2)(A) encompasses forms of fraud, like fraudulent conveyance schemes, that can be effected without a false representation.” Husky Int’l Elecs., Inc. v. Ritz, No. 15-145, 2016 WL 2842452 (May 16, 2016). (Available at

Bankruptcy Judge Declares System Failure

In a judge-initiated proceeding that starkly reveals disagreement between current and former judges in the Southern District of Texas, a bankruptcy judge has declared that the United States Trustee, the Standing Trustee and the bankruptcy court each "violated its duties" with respect to the management of mortgages in Chapter 13 cases in the district. The decision includes a robust public apology and an affidavit from a retired bankruptcy judge supporting the Standing Trustee. In re Chapter 13 Plan Administration in the Brownsville, Corpus Christi and McAllen Divisions, Misc. Case No. 15­701, Amended Order, ECF Doc. 31 (Bankr. S. D. Tex. May 6, 2016) (Jones) (available at

Fourth Circuit (Mis)Construes Power To Cure Default

The Fourth Circuit holds that a Chapter 13 debtor is forever stuck with the default interest rate in a principal residence mortgage notwithstanding that the debtor cures default and maintains payments through a confirmed plan under §§ 1322(b)(2) and (b)(5). Anderson v. Hancock, No. 15-1505, 2016 WL 1660178 (4th Cir. Apr. 27, 2016) (Wilkinson, Niemeyer, Norton).

Good Read: Judicial Estoppel Is Broken In Eleventh Circuit

Circuit Judge Tjoflat calls on the Eleventh Circuit to convene en banc to correct the mess it has made of judicial estoppel when debtors in bankruptcy fail to disclose lawsuits. Slater v. U.S. Steel Corp., No. 12-15548, 2016 WL 723012 (11th Cir. Feb. 24, 2016) (Tjoflat, Pryor, Scola).

Ninth BAP: Discharged Unsecured Debt Not Counted

Wholly unsecured junior lien is not counted toward unsecured debt eligibility limit in Section 109(e) when debtors discharged personal liability in prior Chapter 7 case. Free v. Malaier (In re Free), BAP No. WW-14-1395-JuKiF, 2015 WL 9252592 (B.A.P. 9th Cir. Dec. 17, 2015) (Jury, Kirscher, Faris).

Supremes to Decide Whether "Actual Fraud" Requires Misrepresentation

The Supreme Court granted certiorari to resolve the circuit split whether nondischargeability for “actual fraud” under 11 U.S.C. § 523(a)(2)(A) requires a misrepresentation as held by the Fifth Circuit in Husky International Electronics, Inc. v. Ritz (In re Ritz), 787 F.3d 312 (5th Cir. May 22, 2015), or more broadly applies to a fraudulent transfer scheme as held by the First Circuit in Sauer Inc. v. Lawson (In re Lawson), 791 F.3d 214 (1st Cir. July 1, 2015) (Lynch, Kayatta, Thompson), and the Seventh Circuit in McClellan v. Cantrell, 217 F.3d 890 (7th Cir. July 5, 2000) (Posner, Ripple, Rovner). Husky Int’l Elecs., Inc. v. Ritz (In re Ritz), No. 15-145, 2015 WL 4600346 (Nov. 6, 2015).

Ninth Circuit Nixes Sternberg

The Ninth Circuit en banc has overruled Sternberg v. Johnston, 595 F.3d 937 (9th Cir. Feb. 8, 2010) (Hawkins, Berzon, Clifton), cert. denied, 562 U.S. 831, 131 S. Ct. 102, 178 L. Ed. 2d 29 (Oct. 4, 2010): "Section 362(k) is best read as authorizing an award of attorney's fees incurred in prosecuting an action for damages" for violation of the automatic stay. America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), Case No. 12-60052, 2015 WL 5946342, *5 (9th Cir. Oct. 14, 2015) (en banc).

California Reciprocal Attorney’s Fee Statute Applies to Objection to Confirmation

Chapter 13 debtor recovers attorney fees under California reciprocal attorney's fee statute for successfully defending objection to confirmation of plan that bifurcated car claim that included negative equity financing; lender's objection was action "on a contract" for purposes of California statute notwithstanding that debtor's defense was based on Bankruptcy Code. Penrod v. AmeriCredit Fin. Servs., Inc. (In re Penrod), No. 13-16097, 2015 WL 5730425 (9th Cir. Oct. 1, 2015) (Gilman, Graber, Watford).

Good Read: Local Standards: Housing and Utilities on UST Web Site Are Fake

The division of Local Standards: Housing and Utilities into mortgage and nonmortgage components was the work of the EOUST and the Rules Committee, not the IRS; debtor with taxes and insurance but no mortgage debt is allowed entire Local Standards: Housing and Utilities amount stated by IRS. In re Currie, No. 14-71331, 2015 WL 5474475 (Bankr. C.D. Ill. Sept. 17, 2015) (Gorman).

Ninth Circuit: Lien Securing
Disallowed Claim Is Void

Section 506(d) voids lien securing timely filed but disallowed secured claim at completion of payments in no-discharge Chapter 20 case. Blendheim v. HSBC Bank Nat'l Ass'n (In re Blendheim), Nos.13–35354 & 13–35412, 2015 WL 5730015 (9th Cir. Oct. 1, 2015) (Bybee, Callahan, Paez).


Chapter 7 debtor cannot use § 506(d) to void wholly unsecured junior lien because “Dewsnup defined the term ‘secured claim’ in § 506(d) to mean a claim supported by a security interest in property, regardless of whether the value of that property would be sufficient to cover the claim.” Bank of America, N.A. v. Caulkett, No. 13-1421, 2015 WL 2464049 (June 1, 2015). Available here.

Supremes: Consent Works

“We hold that Article III is not violated when the parties knowingly and voluntarily consent to adjudication by a bankruptcy judge.” Wellness Int’l Network, Ltd. v. Sharif, No. 13-935, 2015 WL 2456619 (May 26, 2015).

Supremes: Debtor Gets Refund at Conversion

At conversion (in good faith) to Chapter 7 after confirmation, undistributed funds held by Chapter 13 trustee must be refunded to debtor. Harris v. Viegelahan, No. 14-400, 2015 WL 2340847 (May 18, 2015).

Bankruptcy Rule 3002(c) Applies to Secured Creditors

The 90-day bar date for timely filing proofs of claim in Bankruptcy Rule 3002(c) applies to secured creditors. In re Pajian, No. 14-2052, 2015 WL 2182951 (7th Cir. May 11, 2015) (Wood, Easterbrook, Williams).

FDCPA Reaches Debt Collectors for State of Ohio

Private attorneys appointed as "special counsel" to Ohio Attorney General and authorized to use OAG stationary to collect debts owed State are not excepted from FDCPA liability. Gillie v. Law Office of Eric A. Jones, LLC, Case No. 14-3836, 2015 WL 2151755 (6th Cir. May 8, 2015) (Clay, Gilman, Sutton).

Supremes: Denial of Confirmation is NOT Final

The Supreme Court has unanimously sentenced debtors to suffer dismissal or confirmation of a plan debtors do not want as a condition for appeal of the denial of confirmation. Bullard v. Blue Hills Bank, No. 14-116, 2015 WL 1959040 (May 4, 2015).

Confirmation Bars FDCPA Action in Fourth Circuit

FDCPA class action against debt buyer for illegally filing proofs of claims without a Maryland debt collection license is precluded by confirmation of Chapter 13 plans: “[Debtors] should have raised these statutory claims during the plan confirmation hearings, and their failure to do so means that these claims are barred by res judicata.” Covert v. LVNV Funding, LLC, No. 14-1016, 2015 WL 877133, at *4 (4th Cir. Mar. 3, 2015) (Niemeyers, Shedd, Keenan).

Counting Debt Unsupported by Value or Personal Liability

To calculate “aggregate debt” for purposes of eligibility in a Chapter 12 case, “debt” includes the unsecured portion of an undersecured claim notwithstanding discharge of the debtor’s personal liability in a prior Chapter 7 case. Davis v. U.S. Bank, N.A. (In re Davis), No. 12-60069, 2015 WL 662001 (9th Cir. Feb. 17, 2015) (Graber, Gould, Callahan).

Supremes Accept Another Chapter 13 Case: Can You Appeal the Denial of Confirmation?

Addressing a nasty split among the circuits, the Supreme Court will decide whether the denial of confirmation of a plan is a final, appealable order. In several circuits, the debtor must suffer dismissal of the case or confirmation of a plan to which the debtor objects to gain access to appellate review of the denial of confirmation. Bullard v. Hyde Park Sav. Bank, No. 14-116 (U.S. Dec. 12, 2014).

Supremes Grant Cert: Who Gets $ at Conversion After Confirmation?

The Supreme Court today granted certiorari to resolve this circuit split: When a debtor in good faith converts to Chapter 7 after confirmation of a Chapter 13 plan, undistributed funds held by the Chapter 13 trustee are refunded to the debtor -- as the Third Circuit held in In re Michael, 699 F.3d 305 (3d Cir. Oct. 26, 2012) (Ambro, Roth, Sloviter) -- or distributed to creditors -- as the Fifth Circuit held in Viegelahn v. Harris (In re Harris), 757 F.3d 468 (5th Cir. July 7, 2014) (Graves, Benavides, Clement).

Supremes Grant Cert: Strip off of Wholly Unsecured Lien in Chapter 7 Case

The question presented: "whether section 506(d) permits a Chapter 7 debtor to 'strip off' a junior mortgage lien in its entirety when the outstanding debt owed to a senior lienholder exceeds the current value of the collateral." Bank of America, N.A. v. Caulkett, No. 13-1421, 2014 WL 2207208 (Nov. 17, 2014) (Petition for Writ of Certiorari available at 2014 WL 2213197).

The definitive Chapter 13 Treatise for over 20 years, Keith Lundin's Chapter 13 Bankruptcy is entering its FIFTH Edition!

The Fifth Edition is simply too big to write and release all at once, so we are releasing it in sections as they are completed, that together with the current Fourth Edition will ensure that you always have the most comprehensive and insightful Chapter 13 resource ever written.

The first 52 New Sections are already available!

SUBSCRIBERS: All of the new material is ready and waiting for you at the 5th Edition's Table of Contents. There is much, much more on the way.

Not Yet a Subscriber? Here's a Quick Look at what we do. Check it out, let us know if you have any questions, and we look forward to you joining us!

Tenth Circuit BAP: “Derived” Means “Received”

In a Chapter 7 case, to determine current monthly income under § 101(10A), wages received during six-month look-back period are included notwithstanding that work was performed and wages were earned before period began. Miller v. United States Trustee (In re Miller), No. WY-14-002, 2014 WL 5018464 (B.A.P. 10th Cir. Oct. 8, 2014) (Karlin, Nugent, Somers).

Chapter 13 Debtor Lacks Standing to Sue Mortgagee

Without discussion of § 1303 or of contrary authority from other circuits, Chapter 13 debtor lacks capacity to sue Nationstar for predatory and deceptive practices and to undo prepetition foreclosure; cause of action passed to Chapter 13 estate and only the trustee has standing to pursue the action. Rugiero v. Nationstar Mortg., LLC, No. 13–2126, 2014 WL 4549003 (6th Cir. Sept. 15, 2014) (Batchelder, Boggs, White).

Funding Plan from Legal Marijuana Sales Is "Means Forbidden by Law"

Citing Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365, 127 S. Ct. 1105, 166 L. Ed. 2d 956 (Feb. 21, 2007), conversion from Chapter 7 to Chapter 13 is bad faith when any confirmable plan would be funded from sales of marijuana that are legal in Colorado but illegal under federal law; production and sale of a controlled substance is a means forbidden by law under § 1325(a)(3). In re Arenas, Case No. 14-11406 HRT, 2014 WL 4288991 (Bankr. D. Colo. Aug. 28, 2014) (Tallman).

Restitution Trumps Automatic Stay

18 U.S.C. § 3613(a) empowers federal government to collect criminal restitution from property of a Chapter 13 estate without regard to the automatic stay or relief from the stay. United States v. Robinson (In re Robinson), No. 13-5857, 2014 WL 4116476 (6th Cir. Aug. 22, 2014) (Cole, Griffin, Pearson).

Proof of Claim Violates FDCPA

Filing a proof of claim to collect a stale debt is actionable under the Fair Debt Collection Practices Act: filing the proof of claim was a "collection activity;" filing a time-barred claim is "unfair . . . unconscionable . . . deceptive . . . and misleading." Crawford v. LVNV Funding, LLC, No. 13-12389, 2014 WL 3361226 (11th Cir. July 10, 2014) (Goldberg, Hull, Walter).

Eleventh Circuit Agrees: No-Discharge Lien Strip Is Allowed

The Eleventh Circuit has joined the Fourth Circuit (Branigan v. Davis (In re Davis), 716 F.3d 331 (4th Cir. May 10, 2013) (Niemeyer, Keenan, Diaz)), in holding that a "Chapter 20" debtor can strip off a wholly unsecured junior mortgage notwithstanding that the debtor is not eligible for discharge because of § 1328(f). Wells Fargo Bank, N.A. v. Scantling (In re Scantling), No. 13-10558, 2014 WL 2750349 (11th Cir. June 18, 2014) (Tjoflat, Moore, Schlesinger).

Replacement Value Standard Applies to Surrender

“Replacement value” standard in § 506(a)(2) applies at surrender of recreational vehicle under Chapter 13 plan. BAPCPA arrived after Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (June 16, 1997), and plain language of § 506(a)(2) requires replacement value without regard to “disposition or use” by debtor. When replacement value is greater than debt, plan can surrender collateral in full satisfaction of claim. Santander Consumer USA, Inc. v. Brown (In re Brown), No. 13-13013, 2014 WL 1245266 (11th Cir. Mar. 27, 2014) (Wilson, Bucklew, Lazzara).

Filing Fees Go Up on June 1, 2014

The Judicial Conference approved the following increases in bankruptcy fees effective June 1, 2014: the “administrative fee” charged at the filing of every Chapter 7 or Chapter 13 case increases to $75 (from $46); a new fee of $75 will be charged to divide a joint case under Chapter 7 or Chapter 13; the filing fee for an adversary proceeding increases to $350 (from $293).

Carelessness or Inadvertence Upsets Judicial Estoppel

Judicial estoppel does not bar debtor’s disability action because failure to schedule in Chapter 13 case was error by attorney of which debtor was not aware and exemption for disability benefits under state law negates motive to benefit from concealment. Javery v. Lucent Technologies, Inc. Long Term Disability Plan for Mgmt. or LBA Emps., 741 F.3d 686 (6th Cir. Feb. 3, 2014) (Cole, Clay, Bertelsman).

What Happens When Courts Don’t Understand Chapter 13

Bankruptcy court did not clearly err in finding lack of good faith under § 1325(a)(3) and (a)(7) when disabled debtor with limited income from Social Security and no nonexempt assets proposed “attorney-fee-centric” plan that would require 17 months to pay attorney fees; that 36-month plan would pay all allowed unsecured claims in full did not change outcome because “abysmal failure rate” of Chapter 13 cases made it unlikely that debtor would complete plan. Brown v. Gore (In re Brown), No. 13-10260, 2014 WL 563601 (11th Cir. Feb. 14, 2014) (Carnes, Hull, Cox).

Standing Trustee Acts Under Officer of the United States

Standing Chapter 13 Trustee is a “person acting under” an Officer of the United States—the United States Trustee within the Department of Justice—for purposes of removing a discrimination action to federal court under 28 U.S.C. § 1442(a)(1); trustee had “colorable federal defense” that employment action was performance of official duties that included involvement of United States Trustee and of a United States bankruptcy judge after peer review by National Association of Chapter 13 Trustees. Bell v. Thornburg, No. 13-30155, 2013 WL 6850026 (5th Cir. Dec. 30, 2013) (Stewart, King, Prado).

No Benefit to Estate? No Derivative Standing

Assuming derivative standing is possible in a Chapter 13 case, debtor does not have derivative standing to avoid prepetition foreclosure sale when trustee elected not to pursue avoidance because there was no equity in the property to benefit creditors. Weyandt v. Federal Home Loan Mortgage Corp. (In re Weyandt), No. 11-4565, 2013 WL 6052130 (3d Cir. Nov. 18, 2013) (unpublished) (Chagares, Vanaskie, Shwartz).

Lien Stripping Limitation

In a Chapter 13 case filed by only one spouse, plan cannot strip off valueless junior lien on residence owned as tenancy by the entireties. Alvarez v. HSBC Bank USA, N.A. (In re Alvarez), No. 12-1156, 2013 WL 5737704 (4th Cir. Oct. 23, 2013) (Gregory, Davis, Keenan).

Ninth Circuit Finishes Off Kagenveama

A majority of the Ninth Circuit sitting en banc has overruled the surviving part of Maney v. Kagenveama (In re Kagenveama), 521 F.3d 868 (9th Cir. June 23, 2008) (Siler, Bea, Pregerson): the applicable commitment period in § 1325(b) is temporal; even a debtor with no projected disposable income must propose a plan that is at least as long as the 3 or 5 year applicable commitment period. Danielson v. Flores (In re Flores), No. 11-55452, 2013 WL 4566428 (9th Cir. Aug. 29, 2013) (en banc).

Significant Proposed Rules and Forms Changes: Speak Up Now

The Judicial Conference Advisory Committee on Bankruptcy Rules has just published important proposed amendments to the bankruptcy rules and forms. Comments are due by February 15, 2014. These amendments dramatically change the content and timing of proofs of claims and include a new form for the Chapter 13 Plan. The proposed amendments and committee reports are posted at The Chapter 13 Plan form is tied to rule changes that would not become effective until December 1, 2015. Most of the other proposed form changes could become effective December 1, 2014. The Advisory Committee through its chair, Gene Wedoff, has reached out robustly to the entire bankruptcy community for comments and suggestions about these important changes. Comments may be submitted electronically at


State court contempt proceeding and incarceration for failure to pay alimony violated automatic stay when state court order required debtor to pay alimony from postpetition income but there was no garnishment or similar withholding order in effect at the Chapter 13 petition. In re DeSouza, No. 11-40315-MSH, 2013 WL 2991034 (B.A.P. 1st Cir. June 14, 2013) ( Deasy, Kornreich, Tester).

Seventh Joins Tenth: Dewsnup Applies in Chapter 13 Cases

Echoing Woolsey v. Citibank, N.A. (In re Woolsey), 696 F.3d 1266 (10th Cir. Sept. 4, 2012) (Gorsuch, Holmes, Matheson), Dewsnup applies in Chapter 13 cases: § 506(d) does not void unsecured portion of undersecured tax lien. Ryan v. United States (In re Ryan), No. 12-3398, 2013 WL 3380131 (7th Cir. July 8, 2013) (Ripple, Rovner, Williams).

Second Circuit: Car Lender Willfully Violated Stay by Refusing Turnover of Repossessed Car

Car lender willfully violated stay by refusing to return car lawfully repossessed before petition; debtor’s equitable interest under state law became property of Chapter 13 estate and lender exercised control over that property by demanding adequate protection as condition of turnover. Weber v. SEFCU (In re Weber), No. 12-1632-bk, 2013 WL 1891371 (2d Cir. May 8, 2013) (Cabranes, Raggi, Carney).

First Circuit BAP: Untimely Claim Filed by Debtor is Disallowed and Dischargeable

Untimely priority claim filed by debtor on behalf of taxing authority is disallowed on trustee’s objection and will be discharged without payment upon completion of plan. Municipality of Carolina v. Gonzalez (In re Gonzalez), BAP No. PR 12-063, 2013 WL 1629235 (B.A.P. 1st Cir. Apr. 12, 2013) (Haines, Feeney, Hoffman).

Third Circuit: Fesq is Alive and Well Notwithstanding Espinosa

In re Fesq, 153 F.3d 113 (3d Cir. Aug. 18, 1998) (Stapleton, Alito, Shadur), was not overruled by United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010); bank cannot challenge confirmation order by Rule 60 motion on any ground except fraud. In re Rodriguez, No. 12-2146, 2013 WL 1716110 (3d Cir. Apr. 22, 2013) (Jordan, Aldisert, Nygaard) (unpublished).

First Circuit: Claim Disallowance Can Bar Collection of Nondischargeable Debt

Allowance of student loan debt “in the amount of $0.00” based on unrebutted evidence that loans were paid in full before petition precludes post-bankruptcy collection of student loan debt without regard to nondischargeability. Hann v. Educational Credit Mgmt. Corp. (In re Hann), 711 F.3d 235 (1st Cir. Mar. 29, 2013) (Torruella, Stahl, Thompson).

Supremes Say "Defalcation" Requires Intentional Wrong

To determine dischargeability under § 523(a)(4), defalcation in a fiduciary capacity requires an intentional wrong: either “conduct that the fiduciary knows is improper . . . [or] reckless conduct of the kind that the criminal law often treats as the equivalent." Bullock v. BankChampaign, N.A., No. 11-1518, 2013 WL 1942393, at *5 (May 13, 2013).

Fourth Circuit: Lien Strip Okay in No-Discharge Cases

BAPCPA did not upset lien-stripping of wholly unsecured mortgage in no-discharge Chapter 20 case; good faith test provides sufficient protection from abuse. Branigan v. Davis (In re Davis), No. 12-1184, 2013 WL 1926407 (4th Cir. May 10, 2013) (Diaz, Niemeyer; Keenan dissenting).



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