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New England Bankruptcy Law Blog

Preti Flaherty bankruptcy attorneys provide news and discuss up-to-date legal issues and emerging trends in bankruptcy, creditor’s rights and business restructuring law. The attorneys in the firm's insolvency practice represent clients in all areas of bankruptcy with a focus on business restructuring, formal bankruptcy proceedings and creditors’ rights litigation.

Recent Blog Posts

  • In the recent opinion of In re Failla, the Eleventh Circuit ruled that when a debtor indicates in a Chapter 7 bankruptcy schedules case that she or he intends to “surrender” property subject to a secured claim, the debtor can’t renege on that commitment. The Court of Appeals therefore affirmed the bankruptcy court’s order requiring the debtors to cease opposition to a secured creditor’s subsequent foreclosure of the surrendered property. The Faillas indicated in their Chapter 7 Statement... More
  • As reported on our blog, the Eleventh Circuit ruled that filing a time barred proof of claim does not violate the Fair Debt Collection Practices Act, an issue which has divided courts and Courts of Appeals. The Supreme Court has granted certiorari in the case of Midland Funding LLC v. Johnson. (See here.)  Presumably, this will resolve the circuit split on the issue and provide guidance for creditors and debtors on this tough issue.Stay tuned. We will report... More
  • Recently, the Bankruptcy Court for the District of Maine held that a debtor’s interest in an engagement ring is exempt under Maine law. In re Cynthia A. Chaney, Case No. 15-20725. In that case, the debtor claimed the full value of her wedding and engagement rings, valued at $5,200, as exempt under Maine law. The Chapter 7 Trustee in the case objected, arguing that Maine law allows an exemption in jewelry up to a maximum value of $750. In Maine, a... More
  • Do parents receive something of value when they pay for their child to attend college? The Massachusetts Bankruptcy Court (Hoffman, J.) recently considered this exact question in DeGiamcomo v. Sacred Heart University, Inc., AP No. 15-01126 (August 10, 2016). In this case, after the debtor’s parents were convicted of investment fraud for operating a Ponzi scheme, a Chapter 7 trustee attempted to avoid and recover over $60,0000 in tuition payments made to an area college as fraudulent transfers... More
  • With its recent opinion in In re Eric Dubois, Case No. 15-1945, the Fourth Circuit has joined Second, Third, and Seventh Circuits in ruling that proofs of claim filed for stale debt does not violate the Fair Debt Collection Practices Act.Two debtors in separate bankruptcy cases filed Adversary Proceeding complaints against Atlas Acquisitions LLC, which had bought claims from pay-day lenders and filed proofs of claim in the bankruptcy cases. The adversary complaints asserted that Atlas had violated ... More
  • Chapter 7 trustees’ success in avoiding mortgages with defective certificates of acknowledgement occurs with some regularity in Massachusetts.  See e.g. In re Giroux, 2009 WL 1458173 (D. Ma. Bankr. Jul. 27, 2011).  But it has not been that common in Maine.  Last month, however, a Chapter 7 trustee successfully avoided a Maine mortgage because of a defective acknowledgment and obtained the right to sell the property.  In re Bishop, No. 15-10554 (D. Me. Bankr. Jul. 28, 2016).  The Debtor’s mortgage... More
  • As part of the American Bankruptcy Institute Northeast Bankruptcy Conference and Consumer Forum, Tony Manhart presented an article, which I co-wrote with him, on whether a late-filed tax return is a “return” under section 523(a) of the Bankruptcy Code. Courts are divided on whether the definition of “return” added by the Bankruptcy Abuse and Consumer Protection Act makes tax debt associated with all late-filed returns non-dischargeable. Courts in the First Circuit have found that late-filed returns are not “returns” and the... More
  • A North Carolina bankruptcy court recently denied a Debtors’ attempt to “strip off” a junior lien on their primary residence by rejecting the argument that the property should be valued near the time of plan confirmation.  In re Cooper, No. 11-02804-8 (Bankr. E.D. N.C. Jun. 8, 2016). § 506(a) provides that for purposes of determining the secured status of a creditor “value should be determined in light of the purpose of the valuation and of the proposed distribution or use... More
  • The 23rd annual Northeast Bankruptcy Conference takes place this week, from July 14-17, at the Omni Mount Washington Resort in Bretton Woods, New Hampshire. This conference provides a great opportunity to gain insight into our industry. It also offers a forum to discuss current topics and network with knowledgeable colleagues. On Friday, from 11:00 a.m. to 12:15 p.m., I will be moderating a consumer track panel session entitled, "Many Unhappy Returns - Another Hanging Paragraph Creates a Trap for Consumer... More
  • In Estate of Summers v. Nisbet, the Maine Supreme Judicial Court reinforced the first in time, first in right nature of attachment and trustee process under Maine law.  Attachment and trustee process are powerful enforcement tools with which a plaintiff can place a lien on a defendant’s real or personal property while the case is pending, so that the defendant cannot transfer or abscond with property while being sued. After a tragic fire at an apartment building in Portland, Maine that... More
  • The Court of Appeals for the Seventh Circuit recently discussed the standard for whether payments made to vendors in the 90 days prior to a bankruptcy filing are within the “ordinary course of business” defense.  In making that determination, courts look at the transactions between the debtor and the creditor prior to the bankruptcy filing to set a baseline for what the parties’ “ordinary course” dealings were.  Typically, courts use one of two methods to create a baseline.  The first—the... More
  • The bankruptcy court for the Eastern District of New York found that a debtor who was ordered to vacate his home could still claim an exemption in the property. In a divorce proceeding several months prior to the bankruptcy filing, the debtor’s spouse had been granted exclusive occupancy of the home and the debtor was barred from entering the property.  At the time of the bankruptcy filing, the debtor was prohibited by the state... More
  • In a recent decision from the Bankruptcy Court for the District of Maine, In re Cho, the Court ruled that 11 U.S.C. § 365(d)(4)(A) applies to debtors in Chapter 13 cases. In this case, the debtors operated a dry cleaning business and had an unexpired lease with a creditor. The creditor moved for relief from the automatic stay. The debtors subsequently filed their Chapter 13 plan, 188 days after filing, and attempted to assume the lease with the... More
  • The latest statistics show bankruptcy filings are down compared to last year. In New Hampshire, filings are off 13%. In Maine, filings have decreased 26%. In Massachusetts, filings are lower by 16%. With a few exceptions, such as Texas and Alaska, bankruptcy filings have been off nationwide.A closer look at the monthly trends, however, suggests an increase in new filings may be on the horizon. For instance, in Maine, 183 petitions were filed this past... More
  • In a recent decision from the Court of Appeals for the 11th Circuit, In re Johnson, the Court found that the Bankruptcy Code and the Fair Debt Collection Practices Act can coexist.  Whether an FDCPA claim may lie against a creditor filing a proof of claim in a bankruptcy case appears to be an open issue around the country.  The debtor in Johnson argued that a creditor has no right to file a proof of claim where the underlying debt... More