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Posts published in “Bankruptcy”

No FDCPA Violations in Simon After Remand

Two years ago, in Simon v. FIA Card Services, N.A., the Third Circuit held that alleged violations of the FDCPA resulting from conduct in a bankruptcy case were not precluded by the Bankruptcy Code. At issue was whether the defendants engaged in false, misleading or deceptive conduct in connection with their service of a subpoena for a Rule 2004 examination.  The certification of service on the subpoenas indicated service both directly on the plaintiffs and on their attorney whereas they were actually only served on the attorney. In addition, the location provided for the examination was improper under the bankruptcy…

U.S. Supreme Court Holds Chapter 7 Debtor Cannot ‘Strip Off’ Wholly Unsecured Junior Mortgage

The U.S. Supreme Court recently held that a debtor in a Chapter 7 case cannot “strip-off” or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code. A copy of the opinion is available at: Link to Opinion. The debtors in the consolidated cases both had two mortgages on their homes. The petitioner held a second-position mortgage on each of the homes. The senior mortgage on each home exceeded its fair market value, meaning that the junior mortgages were entirely unsecured and “underwater.” Each debtor moved to “strip-off” or void the junior mortgage liens pursuant to section 506(d)…

7th Circuit Rules Secured Creditor Must File Timely Claim to Receive Chapter 13 Plan Distributions

The U.S. Court of Appeals for the Seventh Circuit recently held that a secured creditor must file its proof of claim no later than the 90-day deadline under Federal Rule of Bankruptcy Procedure 3002(c) in order to receive distributions under a Chapter 13 plan of reorganization. A copy of the opinion is available here:  Link to Opinion. An individual debtor filed his petition under Chapter 13 of the Bankruptcy Code. The clerk of the Bankruptcy Court mailed the “Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines” to the debtor’s creditors. Pursuant to Federal Rule of Bankruptcy Procedure 3002(c),…

Crawford, Progeny – More than Proofs of Claim on Time-Barred Debt

It has been several months since the Eleventh Circuit handed down its decision holding that filing a proof of claim on “time-barred” debt violates the FDCPA. The request for rehearing, which I reported about this past summer, was denied. While a petition for certification to the Supreme Court is possible, even if the court accepts the case (and that’s a tall order itself) we would not see a decision before 2016. A Multitude of Crawford-type Claims While it was a safe bet a new round of FDCPA claims would be spawned by Crawford, the sheer number of claims being filed outside the Eleventh Circuit is surprising.…