In In re Dukes, No. 16-16513 (11th Cir. Dec. 6, 2018), the Eleventh Circuit held that a debtor’s mortgage obligation was not discharged, despite a proof of claim not being filed, because the mortgage was not provided for by the debtor’s plan and because of the anti-modification provision of Section 1322(b)(2).
Continue Reading Eleventh Circuit: Mortgages not covered by bankruptcy discharge
Bankruptcy
Supreme Court Sides With Balch Lawyers and Finds for Midland Funding, Rejecting FDCPA Lawsuits Based on Bankruptcy Proofs of Claim for Out-of-Statute Debts
This week, the United States Supreme Court issued a key decision under the Fair Debt Collection Practices Act in a case litigated by Balch & Bingham lawyers, Jason Tompkins and Chase Espy. In Midland Funding, LLC v. Johnson, the Supreme Court resolved a circuit split over the issue of whether debt collectors who file bankruptcy proofs of claim for stale debts are subject to suit under the Fair Debt Collection Practices Act. Siding with Midland, one of the nation’s largest buyers of unpaid debt, the Supreme Court held that “filing a proof of claim that on its face indicates that the limitations period has run” is not actionable under the FDCPA, thereby avoiding a potential conflict between the FDCPA and the Bankruptcy Code. Although ostensibly limited to the bankruptcy context, the Johnson decision could potentially ripple into other FDCPA cases. In the meantime, though, Johnson will undoubtedly turn off the faucet for would-be FDCPA plaintiffs who had hoped to capitalize on what the Eleventh Circuit complained is a “deluge” of out-of-statute proofs of claim.
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Continue Reading Supreme Court Sides With Balch Lawyers and Finds for Midland Funding, Rejecting FDCPA Lawsuits Based on Bankruptcy Proofs of Claim for Out-of-Statute Debts
Eleventh Circuit Declines to Expand Reach of “Least Sophisticated Consumer” Standard In the Context of Sending Periodic Mortgage Statements Following Bankruptcy Discharge
The Eleventh Circuit recently clarified that sending periodic mortgage statements following a debtor’s bankruptcy discharge is not misleading to the “least sophisticated consumer.” In Helman v. Bank of America, 15-13672, 2017 WL 1350728 (11th Cir. April 12, 2017) Gayle Helman filed suit, alleging that Bank of America violated the Fair Debt Collections Practices Act (FDCPA), Florida Consumer Collection Practices Act (FCCPA), and other state laws when it sent Ms. Helman periodic mortgage statements after her mortgage loan was discharged in bankruptcy. She claimed that the statements unlawfully attempted to collect a discharged debt and that such communications would be misleading to the least sophisticated consumer because it suggested she remained liable for the debt.
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Continue Reading Eleventh Circuit Declines to Expand Reach of “Least Sophisticated Consumer” Standard In the Context of Sending Periodic Mortgage Statements Following Bankruptcy Discharge
Against the Grain: Bankruptcy court allows FDCPA claim to proceed despite res judicata argument
Few issues involving the Fair Debt Collection Practices Act (FDCPA) are more hotly contested than whether filing a proof of claim on a time-barred debt violates the FDCPA. In bankruptcy, creditors have a right to file proofs of claim outlining the debt owed to them by the bankrupt debtor. In some instances, the statute of…
Bankruptcy courts divided on whether Chapter 13 plan extends time for redemption
Bankruptcy courts are currently divided on whether a debtor has a right to redeem property sold at a tax sale after the redemption period has run. The time for redemption depends on the law of the state where the property is located. In Alabama, for example, the statutory redemption period is three (3) years. Usually,…
Supreme Court Rules Junior Liens Can’t Be Stripped Off in Chapter 7 Bankruptcy
On June 1, 2015, the United States Supreme Court handed down its opinion in the case of Bank of America, N.A. v. Caulkett. In this case, the Court unanimously decided that a debtor in chapter 7 bankruptcy cannot “strip off” a junior lien that is fully underwater at the time the bankruptcy case is filed. …
ELEVENTH CIRCUIT COURT OF APPEALS UPHOLDS NON-DEBTOR RELEASES IN CHAPTER 11 PLAN
The Eleventh Circuit Court of Appeals recently issued an opinion resolving any question as to whether or not a chapter 11 plan of reorganization may include enforceable releases of third parties who are not in bankruptcy.[1] This ruling reinforces the importance of carefully reviewing proposed chapter 11 plans as these plans could impact a…