Press "Enter" to skip to content

Posts published in “Bankruptcy”

9th Cir. Holds Debtor’s Acknowledgement of Debt Does Not Excuse Untimely Proof of Claim

The U.S. Court of Appeals for the Ninth Circuit recently held that if a creditor wishes to participate in the distribution of a debtor’s assets under Chapter 13, it must timely file a proof of claim, and the debtor’s acknowledgment of the debt owed to the creditor does not relieve the creditor of this affirmative duty. A copy of the opinion is available at:  Link to Opinion. The debtor filed a Chapter 13 bankruptcy petition.  The bankruptcy court issued a notice with a deadline for creditors to file a proof of claim.  The creditor was sent a copy of the…

Fla. App. Court (2nd DCA) Holds Substituted Mortgagee Need Not Prove Standing at Time of Substitution

The District Court of Appeal of Florida, Second District, recently confirmed that a substituted plaintiff would have to demonstrate its standing to enforce a note and mortgage at the time of trial, and the original plaintiff’s standing at the time the foreclosure complaint was filed. In so ruling, the Court rejected the argument a substituted mortgagee must also prove its standing at the time of a court-ordered substitution. A copy of the opinion is available at:  Link to Opinion. A mortgagee filed a foreclosure action asserting two counts: an action to reestablish the note which was allegedly lost or destroyed,…

MD Fla. Holds Notice of Bankruptcy Sufficient for ‘Actual Knowledge’ of Representation by Counsel Under FCCPA

The U.S. District Court for the Middle District of Florida, Orlando Division recently ruled that debtors’ FCCPA and TCPA claims did not arise out of and were not related to their mortgage to fall under the jury waiver provisions in the mortgage where the claims arose out of attempts to enforce a debt that was discharged in bankruptcy. The Court also ruled the debtors sufficiently stated a claim under FCCPA by alleging the creditor received notice of the debtors’ bankruptcy case to constitute actual knowledge the debtors’ were represented by counsel. A copy of the opinion in Bray et al v.…

Supreme Court Takes On Chapter 13 Bankruptcy Mess Created by FDCPA Ruling

The Supreme Court of the United States has decided it will review the decision of the U.S. Court of Appeals for the Eleventh Circuit in Johnson v. Midland Funding LLC. A link to the docket is available here: Link to Docket.  As you will recall from my previous article, Johnson was the second case decided by the Eleventh Circuit addressing time-barred proofs of claim in Chapter 13 bankruptcy. In the first case, Crawford v. LVNV Funding, LLC, the Eleventh Circuit held that a debt collector violates the FDCPA when it files a proof of claim in a bankruptcy case on a…

11th Cir. Holds Bankruptcy ‘Surrender’ Requires Debtor to Give Up All Rights in Collateral

The U.S. Court of Appeals for the Eleventh Circuit recently held that the word “surrender” in the Bankruptcy Code, 11 U.S.C. § 521(a)(2), requires that debtors relinquish all of their rights to the collateral. In so ruling, the Court ordered the borrowers to “surrender” their house to the mortgagee in a foreclosure action, and held that the bankruptcy court had the authority to compel the borrowers to fulfill their mandatory duty under 11 U.S.C. § 521(a)(2) not to oppose a foreclosure action in state court. A copy of the opinion in David Failla, et al v. Citibank, N.A. is available at: …

3rd Cir. Says State Law Claims Not Preempted by Bankruptcy Code’s Involuntary Case Provisions

The U.S. Court of Appeals for the Third Circuit recently held that the Bankruptcy Code does not preempt state law claims brought by non-debtors for damages related to the filing of an involuntary bankruptcy proceeding. A copy of the opinion in Rosenberg v. DVI Receivables XVII, LLC is available at:  Link to Opinion. The creditors in this action initiated state court litigation against limited partnerships controlled by the debtor, alleging money owed under various leases.  During the state court proceedings, the creditors filed an involuntary bankruptcy proceeding against the debtor and the debtor’s affiliated medical imaging companies, none of which were defendants in the…

4th Cir. Holds Time-Barred Proof of Claim Does Not Violate FDCPA

In a split decision, the U.S. Court of Appeals for the Fourth Circuit recently held that “filing a proof of claim in a Chapter 13 bankruptcy based on a debt that is time-barred does not violate the Fair Debt Collection Practices Act when the statute of limitations does not extinguish the debt.” A copy of the opinion in Dubois v. Atlas Acquisitions LLC is available at:  Link to Opinion. The defendant was represented by Donald Maurice of Maurice Wutscher LLP. This action involved two consolidated adversary proceedings. In both underlying bankruptcies, a debt buyer filed proofs of claim on loans that…

6th Cir. BAP Holds In Rem Foreclosure Not Disguised In Personam Collection Effort

The Bankruptcy Appellate Panel of the Sixth Circuit recently held that a condominium unit owners association did not violate a debtor’s Chapter 7 discharge order by scheduling a sheriff’s sale to complete a prepetition foreclosure. Rejecting the bankruptcy court’s conclusion that the in rem foreclosure sale was scheduled to induce payment of discharged pre-petition condominium fees, the Sixth Circuit BAP noted that “all foreclosure litigation potentially can induce payments of discharged debt to avoid a foreclosure sale.” Accordingly, the Sixth Circuit BAP held that the foreclosure was not a disguised in personam collection effort, and that the denial of foreclosure…

Court Affirms Dismissal of Crawford Case for FDCPA ‘Time-Barred’ Proof of Claim, Case Was Itself ‘Time-Barred’

On July 10, 2014, the United States Court of Appeals for the Eleventh Circuit issued its opinion in Crawford v. LVNV Funding, LLC. That opinion began by decrying the “deluge” of proofs of claim filed by debt buyers on debts that are unenforceable under state statutes of limitations. It ended by holding that the filing of a “stale” claim in bankruptcy violates the Fair Debt Collection Practices Act. As expected, the Eleventh Circuit’s opinion led to another sort of deluge: numerous FDCPA claims based upon the filing of proofs of claim or other collector conduct in bankruptcy. While courts across…

Mass. SJC Holds Recorded Attorney’s Affidavit May Cure Defect in Certificate of Acknowledgment for Mortgage

In response to a request from the U.S. Court of Appeals for the First Circuit, the Supreme Judicial Court of Massachusetts recently held that a recorded attorney’s affidavit attesting to the proper acknowledgment of a recorded mortgage with a Certificate of Acknowledgment that omits the mortgagors’ names, in certain circumstances, may cure the defect in the Acknowledgment. The Court also held that a recorded attorney’s affidavit attesting to the proper acknowledgment of a recorded mortgage with a Certificate of Acknowledgment that omits the mortgagors’ names, in certain circumstances, may provide constructive notice of the existence of the mortgage to a…

ED NY Holds Debtor May Not Force Mortgagee to Take Title in Collateral

The U.S. District Court for the Eastern District of New York recently held that a confirmable Chapter 13 plan cannot both “vest” title to real property and “surrender” that property to a secured lender, and that the secured lender may refuse to accept the vesting in satisfaction of its claim. Thus, the Court held that a debtor may not force the transfer of title in collateral to a secured creditor in satisfaction of the secured creditor’s claim, without the consent of the secured creditor. A copy of the opinion in HSBC Bank USA, NA v. Zair is available at:  Link to…

Fla. App. Court (5th DCA) Holds Borrower’s Surrender in Bankruptcy Resolves Contested Foreclosure

As an example of the conflicting and contrasting court rulings on the effect of surrender in bankruptcy (see our prior update), the District Court of Appeal of the State of Florida, Fifth District, recently dismissed a borrower’s appeal from a final judgment of foreclosure because the borrower admitted during the course of his bankruptcy proceeding that he owed the mortgage debt and stated his intention to surrender the mortgaged property. A copy of the opinion in Rivera v. BAC Home Loans is available at: Link to Opinion. A mortgage loan borrower filed for bankruptcy relief while his appeal of a foreclosure…