Secured Creditors Beware: Ninth Circuit Holds a Chapter 13 Debtor may Avoid Liens Even if not Entitled to a Discharge

The Creditors Rights

The creditor in Blendheim was HSBC Bank, which held a deed of trust lien on the debtors’ home. HSBC timely filed a secured proof of claim based on its deed of trust against the debtors’ residence. For some unknown reason, HSBC never responded to the debtors’ objection, and the bankruptcy court entered an order disallowing HSBC’s secured claim. Congress enacted § 1328(f) of the Bankruptcy Code when its passed BAPCPA.

Sixth Circuit: Creditor did not Violate Chapter 7 Discharge Injunction While Negotiating Release of Lien

Foster Swift

Once a Chapter 7 debtor receives a discharge of personal debts, creditors are enjoined from taking action to collect, recover, or offset such debts. However, unlike personal debts, liens held by secured creditors “ride through” bankruptcy. The underlying debt secured by the lien may be extinguished, but as long as the lien is valid it survives the bankruptcy.

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Burr’s James Roberts Named a Finalist for the Chambers Diversity & Inclusion Awards

Burr Forman

James works in the Creditors’ Rights and Bankruptcy Group in the firm’s Birmingham office. His practice focuses on all aspects of corporate restructuring, bankruptcy, and insolvency proceedings, including Section 363 sales, disorderly winddowns, preference, and fraudulent transfer litigation, as well as debtor and secured creditor representation.

As Chapter 11 Bankruptcy Filings Surge, Here’s What Creditors Need to Know to Protect and Enforce Their Rights


Creditors of a bankrupt company must be aware of the various deadlines and procedures that govern the chapter 11 process in order to protect and enforce their rights. For creditors to maximize their recoveries, they must stay informed and take action during a bankruptcy proceeding. The debtor is required to serve all known creditors with notice of the commencement of the chapter 11 case. Conversely, a creditor must also perform its post-petition obligations to a debtor.

A Primer On Administrative Expense Claims From An Oil And Gas Bankruptcy Case


Some of Whistlers’ creditors also filed an involuntary chapter 11 petition against Whistler. The claim drew objections from Whistler, one of its secured creditors, and the unsecured creditors’ committee. This post provides a quick primer on administrative expense claims. These claims are entitled to priority for actual and necessary goods and services supplied to a debtor in bankruptcy.

Deepening Circuit Split, Third Circuit Holds that Items Seized Pre-Petition Did Not Violate Automatic Stay

Consumer Financial Services Law

2019) that creditors who refuse to relinquish an item that was seized pre-petition are not subject to sanctions because their refusal does not violate 11 U.S.C. § She then notified her creditors of the filing and demanded return of the Corvette. The creditor refused to do so, and Denby-Peterson filed a motion for turnover seeking an order (1) compelling the return of the Corvette, and (2) imposing sanctions for an alleged violation of the automatic stay.


Collection Industry News

New sub-chapter V (“five”) – part of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”) – is set to expire in about six months. Creditors will also benefit from the lower costs, quicker proceedings, and increased certainty about the outcome of the process, if at the expense of some leverage. Owners now have a way to keep their equity ownership even over the objection of creditors. This trustee may even interface with creditors in negotiations.

How Businesses Use Corporate Debt Restructuring for Liquidity


Debts can quickly cripple a business, and negotiating more favorable terms with creditors is usually the best way out. Many businesses are both debtors and creditors. Creditors can cut their losses, and everyone can come to an agreement on how to move forward with a deal that benefits everyone involved. Debt restructuring is a mechanism where a business’s creditors restore liquidity by reorganizing financial obligations. Past-Due Secured Debt. Secured Creditors.

Collusive Bidding on a Debtor’s Assets: A Question of Fairness


However, if Lombard, another potential bidder of Waypoint’s assets, and a secured creditor of Waypoint, made a bid for the assets, Macquarie would lose the breakup fee and be unable to submit a matching bid. [vi] By: Ross Weiner. John’s University School of Law. American Bankruptcy Institute Law Review , Staff Member. Under section 363 of title 11 of the United States Code (the “Bankruptcy Code”), a trustee or debtor-in-possession may sell the debtor’s assets.

Default Interest Rates are Presumed Reasonable Under Sec. 506(b), and a Bankruptcy Court May Not Use the Fair and Equitable Language of Sec. 1129(b) to Conclude Otherwise

The Creditors Rights

The Ninth Circuit BAP recently discussed on appeal the issue of whether a bankruptcy court may use the “fair and equitable” standard for confirmation in § 1129(b) to deny an oversecured creditor default interest on its claim to which it would otherwise be entitled under § 506(b). The creditor enjoys a presumption that the contracted for rate is reasonable, and the debtor bears the burden of demonstrating it is not, or that the rate is not enforceable under applicable non-bankruptcy law.


BN Lawyers

Work with Creditors. Most creditors (lenders, suppliers, employees) will be aware of the distress facing the entire service industry. If there is a mitigating factor at play, it is that creditors know that even well-run companies that will be profitable over the medium- and long-term will face short-term liquidity problems and distress. Many creditors will be willing to work with businesses. Creditors face their own pressures. By: R. Shannon, Esq. [1].

Separate Military Service Periods Considered Single Transactions for Recoupment Purposes


military salary, less a 7.65% adjustment for Social Security and Medicare and a 15% administrative adjustment. [2] 7] However, in June 2018, the Debtor filed for bankruptcy relief under Chapter 13 of Title 11 of the United States Code (the “Bankruptcy Code”) and scheduled the City as a creditor for $50,947.00. [8] 11] Because bankruptcy law policy favors equal treatment of creditors and bank court supervision over secured creditors, the recoupment doctrine is narrowly construed. [12]