Posted by Kevin on May 23, 2011 under Bankruptcy Blog | 
It is the law that a bankruptcy filing acts as an automatic stay of most collection efforts against the debtor. But how broad is that protection? In a recent case in the Eastern District of New York (In re: Ebadi), the stay went beyond property owned by the debtor. The debtor was a shareholder of CBC Media Realty. CBC owned a commercial building which it used as collateral for a loan. The debtor personally guaranteed the loan. CBC defaulted on the loan and the creditor obtained a foreclosure judgment. The debtor was named as a defendant in the foreclosure case. Just prior to the sale, the debtor filed a Chapter 13 and notified the foreclosing creditor of the filing. The creditor went ahead with the sale anyway.
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Posted by Kevin on May 18, 2011 under Bankruptcy Blog |
Back in January, 2011, I posted a blog concerning the surrender of a property. On the petition, the debtor must disclose what it intends to do with certain property. You can state that you intend to surrender the property to a secured creditor (like your lender). But, the catch is that the lender does not have to take back the property.
In a recent Chapter 7 case in Maine, HSBC filed a foreclosure action. The borrower filed a Chapter 7 petition and stated its intention to surrender the property. HSBC sent a letter to the debtor saying that it was dropping the foreclosure action but stated that the debtor still owed HSBC pursuant to the Loan Agreement. After two letters from the debtor’s attorney, HSBC acknowledged that the debt was discharged but refused to foreclose and refused to release the mortgage lien without payment.
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Posted by Kevin on May 10, 2011 under Bankruptcy Blog |
The object of a bankruptcy is to get a discharge of your debts. The Code, however, has delineated certain types of debts which are not dischargeable; for example, certain taxes, claims based on a DWI, etc. One of the exceptions to discharge is for debts based on willful and malicious injury by the debtor to another entity or to the property of another entity. The usual example for this type of exception to discharge would be if the debtor beat up and injured someone who then got a judgment. However, this exception to discharge does way beyond the obvious. It can include an intentional breach of contract.
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Posted by Kevin on May 7, 2011 under Bankruptcy Blog |
In NJ, year ending December, 2009 indicates 36420 bankruptcies. Year ending December, 2010 indicates 41366 bankruptcies. This was up 14%. In addition, Chapter 7 filed 3.3 times more than Chapter 13. Remember, we told you that the purpose of the new law, BAPCPA, was to make more people file under Chapter 13. It failed.
Note the the American Bankruptcy Institute indicated that bankruptcies in the US were down 6% from the first quarter of 2010 to the first quarter of 2011. That trend is not happening in NJ which bankruptcies are even or slightly higher.
