North Carolina Lawyers Weekly
Where the Supreme Court previously addressed the proper standard for holding a creditor in civil contempt for attempting to collect a debt that a Chapter 7 discharge order has immunized from collection, that rule also applied in a Chapter 11 ...
Read More »Bankruptcy – Standard for Chapter 11 contempt is clarified
Bankruptcy – Trustee fails to recover debtor’s IRS tax penalty rejected 
Where the trustee sued the United States to void a debtor’s tax penalty obligations to the IRS, and to recover the debtor’s prior payments to the IRS, his claims were dismissed. A “noncompensatory tax penalty that is statutorily required and ...
Read More »Bankruptcy — Automatic Stay – Real Property – Property Owners’ Association Dues
While the Smoky Mountain Country Club Property Owner’s Association (the POA) was under bankruptcy protection with an automatic stay in full effect, the plaintiff-property owners filed a complaint against the developers of the country club, seeking a ruling that would ...
Read More »Bankruptcy – Bankruptcy fees amendment is constitutional
Although a 2017 amendment to the bankruptcy fees provisions may render it more expensive for some debtors in Virginia—as opposed to North Carolina or Alabama—to go through Chapter 11 proceedings, because the difference is a byproduct of Virginia’s use of ...
Read More »Bankruptcy – Treasury can claim debtor’s tax overpayment
Although the bankruptcy code allows a debtor to claim certain personal property as exempt, the Treasury Department has a superior right to claim a tax overpayment, in order to offset monies owed to another federal agency. Background To finance the ...
Read More »Bankruptcy – IRS’s offset right trumps debtor’s right to receive tax overpayment
The case of first impression held that despite a bankruptcy code section providing that exempt property cannot be used to satisfy a debtor’s prepetition debts, the tax code makes clear the government’s right to set-off a tax overpayment against a ...
Read More »Bankruptcy – 1997 decision on homestead bifurcation overruled
The 4th Circuit, sitting en banc, holds that a Chapter 13 plan may bifurcate a claim based on an undersecured homestead mortgage into secured and unsecured components and cram down the unsecured component, overruling a 1997 decision that had been ...
Read More »Bankruptcy – Post-petition payments can’t be sought for child support
The Bankruptcy Code is clear that when a Chapter 13 plan is not confirmed, the trustee must return post-petition payments to the debtor. As a result, the child support division could not levy on funds held by the trustee because ...
Read More »Bankruptcy – Local bankruptcy court rule held invalid
The Eastern District of Virginia’s Local Bankruptcy Rule 3070-1(C), which allows for dismissal without hearing, conflicts with the requirements of 11 U.S.C. § 1307. Background In January 2017, the Eastern District’s bankruptcy trustee certified under Local Bankruptcy Rule 3070-1(C) that ...
Tagged with: Bankruptcy
Read More »Bankruptcy – Dismissal Reversed – Marino Factors – No Real Misconduct
Even though the bankruptcy court found several factors indicating bad faith on the part of the debtors, the bankruptcy court did not have the benefit of the recent Fourth Circuit decision, Janvey v. Romero, 883 F.3d 406 (4th Cir. 2018), ...
Tagged with: Dismissal
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