Chapter 13 Bankruptcy

12 May “Chapter 20” Lien Stripping Allowed by Fourth Circuit Appeals Court

The U.S. Court of Appeals, Fourth Circuit, has become the first U.S. Court of Appeals to approve "chapter 20" lien stripping. Although virtually all U.S. bankruptcy courts allow the "stripping" (vacating and eliminating) of completely unsecured junior mortgages on homestead real estate, the Fourth Circuit...

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26 Apr Trouble Getting a Mortgage Modification? Get Your Bankruptcy Court to Help!

Homeowners experiencing financial difficulties can avoid losing their homes by getting a mortgage modification. The trouble many people have is getting their mortgage company to agree to grant them an affordable modification. Recently, several Bankruptcy Courts have gotten involved in the mortgage modification process. The Courts...

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31 Mar What’s Baseball Got to Do with Bankruptcy?


The Basic Rules of Baseball Bankruptcy by Jan Hamilton, Chapter 13 Trustee

Sections 544, 545, 547, 548 and 549 of the Bankruptcy Code grant “strong arm” powers to bankruptcy trustees, but not specifically to debtors. These statutes permit trustees to seek set aside of certain transfers, including preferential payments and fraudulent conveyances. Long-standing disputes continue over whether these strong arm powers are available to the chapter 13 trustee, the debtor, both or neither. The precise statutory language in chapters 7, 11, 12, and 13 contribute to judicial polarity. Chapter 13 bears some similarities to chapter 11 and even more so to its stepchild chapter 12, although they are not the same. The chapter 13 trustee and debtor are given certain mandates not wholly inconsistent with the duties of the trustee and debtor in the other applicable chapters. One must start with the proposition that the actual phrase “debtor in possession” is never used in chapter 13, while chapter 12 specifically provides for “removal of debtor in possession” in § 1204. § 1101 states the “debtor in possession” is the debtor. §1306, however, does provide that “the debtor shall remain in possession of all property of the estate,” unless otherwise provided for in the order confirming plan. As is demonstrated, although this dichotomy is at the center of the interpretive dispute, it is not determinative, as other statutes bearing on the issue are not wholly consistent with one another. “All players on a team shall wear uniforms identical in color, trim and style." 1.11(a)(1), Official Major League Baseball Rules. When considering the role of the chapter 13 trustee, it is often difficult to determine which color uniform she is wearing. Is it the uniform of a chapter 7 trustee? The debtor? For what team is she playing? The statutory language ostensibly establishing the scheme for chapter 13’s is not particularly helpful in this regard.
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