Many debtors are unaware of “dragnet clauses,” only to find out the same after a bankruptcy is filed. Dragnet clauses are “cross-collateralization” clauses typically used by credit unions to secure other contractual obligations against collateral that didn’t exist when the original security agreement was created.

The Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA) which went into effect on October 17, 2005, appears to be living up to its name with the changes to 11 USC 362.  Indeed, for creditors who violate the automatic stay, there no longer appears to be a good faith exception due to new “consumer protections.”

The Ninth Circuit recently issued a very important decision in the case of In re Ransom, wherein it ruled that Debtors without vehicle debt can not deduct vehicle ownership expenses on Form B22 (the “means test”), a new form created under the new bankruptcy laws enacted in October, 2005.  Such a ruling now creates a [...]

It is not uncommon for debtors in Chapter 13 to fall behind on their trustee, mortgage, or car payments due to circumstances outside of their control.  In such situations, secured lenders will move for relief of stay, which is a motion to allow them to proceed with their normal remedies outside the jurisdiction of the [...]

On June 25, 2009, the Ninth Circuit Court of Appeals ruled that a Chapter 7 Trustee could not undo  a highly unbalanced property distribution arising from a dissolution proceeding where judgment was entered in State Court.  Such a ruling is significant in now providing more security to debtors that seek bankruptcy after divorce, and where [...]

Although the recent downturn in real estate is driving thousands to seek chapter 13 bankruptcy relief to save their homes, the same downturn is also having the ironic affect of denying eligibility to debtor for that very relief.
To file for chapter 13, a debtor must meet the qualifications of 11 USC 109.  Essentially, they must have, [...]

On June 23, 2009, in the case of SNTL Corp. 2009 WL 1758759 (9th Cir. Cal.)), the Ninth Circuit Court of Appeals concluded that unsecured creditors may claim attorney fees incurred postpetition based on a prepetition contract with the debtor.  The Ninth Circuit essentially adopted the Bankruptcy Appellate Panel decision and attached the same as an [...]

On July 14, 2009, the 10th Circuit Court of Appeals issued a decision disallowing a “no doc” claim in a Bankruptcy Case.  Such a holding by the 10th Circuit now binds all Courts in that Circuit and will have an impact on similar proof of claims throughout the United States.
In the case of Caplan v. [...]

For many years, it was questionable whether a debtor who filed for chapter 7 relief was able to keep expensive real estate at the expense of paying other creditors.  At least 5 cases have come down since the new laws passed in 2005 that held that such high expenses related to residences was an “abuse” [...]

The United States District Court located in San Diego recently issued an opinion on December 10, 2008, holding that student loans may be discharged in chapter 13 bankruptcy cases where the creditor fails to object after receiving proper notice.  Other cases around the country are also holding the same and the United States Supreme Court [...]