Showing 42 posts by Laura J. Genovich.
Are Student Loans Dischargeable in Bankruptcy? Only if You Can Prove Undue Hardship
Many students don't realize the scope and extent of the lifelong financial burden they saddle themselves with when taking out student loans. It is only after getting into the "real world" that they realize that living expenses are higher, and after tax income is lower, than they anticipated, making student loan debt repayment difficult if not impossible.
Some look to bankruptcy for relief and a fresh start. But all debt is not treated equally in bankruptcy. Student loan debt is not the same as, for instance, credit card debt. It is not dischargeable pursuant to Bankruptcy Code section 523(a)(8) except in one narrow circumstance. Specifically, to discharge student loan debt, a debtor must show undue hardship - a very high bar. Read More ›
Categories: Chapter 7, Western District of Michigan
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Sixth Circuit Rules that Individual Chapter 11 Debtors are Subject to the Absolute Priority Rule
One of the fundamental tenets of a business bankruptcy reorganization plan under Chapter 11 of the Bankruptcy Code is the "absolute priority rule." This rule, codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code, provides that every unsecured creditor must be paid in full before the debtor can retain any property under a reorganization plan. Chapter 11, however, is not solely the domain of business debtors. Individuals (who more commonly seek protection under Chapters 7 and 13) may also file for Chapter 11. So how does the absolute priority rule affect individual debtors? That issue is analyzed in a recent opinion, Ice House America, LLC v. Cardin, issued by the U.S. Court of Appeals for the Sixth Circuit. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 11
Michigan Bankruptcy Petition Preparer to Serve Jail Time for Criminal Contempt
Section 110 of the United States Bankruptcy Code provides that a non-attorney can assist in the preparation of the bankruptcy petition. However, as an Inkster, Michigan man just learned (the hard way), the Bankruptcy Code places numerous requirements on bankruptcy petition preparers and subjects those who do not comply to substantial penalties.
On Tuesday, February 25, Derrick Hills of Inkster was sentenced by U.S. District Court Judge Sean F. Cox to 46 months in prison after being convicted by a jury in September of five counts of criminal contempt. The contempt proceedings stemmed from repeated violations of orders issued by U.S. Bankruptcy Judge Steven Rhodes from 2007 to 2009. According to a press release issued by the U.S. Attorney's Office following Hills' conviction at trial:
Read More ›The evidence presented at trial showed that Hills had acted as a bankruptcy petition preparer since 2007, assisting people in filing for bankruptcy. Hills continued to act as a bankruptcy petition preparer despite five bankruptcy court orders issued by Bankruptcy Judge Steven Rhodes, permanently enjoining Hills from doing so for various non-compliance with bankruptcy rules and complications caused by his acting in the capacity of a bankruptcy petition preparer. Hills assisted individuals with consumer debts in preparing and filing their Chapter 7 bankruptcy paperwork. However, his actions went well beyond what was allowed by law and clearly violated Judge Rhodes Orders.
Categories: Chapter 7, Did you Know?, Eastern District of Michigan
Chapter 11 Retainer is Property of Estate even if Paid by Third Party
In re Newcomb Print Communications, Inc., Case No. 12-08042 (Bankr. W.D. Mich., Sept. 6, 2013).
When a debtor files a case under Chapter 11 and retains legal counsel, another person or entity may fund the debtor’s retainer. But even when the debtor is not the source of the funds, the retainer is property of the bankruptcy estate – which is particularly important if the case later converts to Chapter 7. Read More ›
Categories: Chapter 11, Chapter 7
Sixth Circuit: Rejection of Chapter 11 Plan not a “Final Appealable Order” for Purposes of Appellate Jurisdiction
Lindsey v. Pinnacle Nat’l Bank (In re Lindsey), Appeal No. 12-6362 (6th Cir., Aug. 13, 2013)
The Sixth Circuit held this week in a published opinion that a bankruptcy court’s denial of confirmation of a Chapter 11 plan is not a final appealable order. In so holding, the Sixth Circuit joins four other circuits, while three other circuits have held to the contrary. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 11
Fame as an asset: Will Casey Anthony’s Chapter 7 bankruptcy case preclude future book and movie deals?
In re Casey Marie Anthony, Bankr. M.D. Fla., Case No. 8:13-bk-00922-KRM
Although this blog typically focuses on Michigan bankruptcy cases, last week’s Chapter 7 filing by Casey Anthony raises interesting questions about the impact of bankruptcy on public figures.
Casey Anthony held the national spotlight for nearly three years after being charged with murdering her two-year-old daughter, Caylee. Anthony initially alleged that Caylee was kidnapped by her nanny, then claimed that Caylee accidentally drowned in the family pool. After a jury found her not guilty on all charges except some misdemeanors, Anthony faced a barrage of lawsuits, including claims for defamation and for reimbursement by private investigators who searched for Caylee in the months before her remains were found.
Those lawsuits ground to a halt when Anthony filed a voluntary Chapter 7 petition in the Middle District of Florida on January 25, 2013. In her bankruptcy papers, Anthony lists few assets (comprised mostly of household goods) but discloses unsecured debts of nearly $800,000, plus numerous debts of unknown amounts. The debts include the pending lawsuits against her and $500,000 in legal fees owed to her criminal defense attorney. Read More ›
Categories: Chapter 7
Only trustee, not debtor, can bring lawsuit on pre-petition cause of action
Auday v. Wet Seal Retail, Inc., Case No. 12-5057 (6th Cir., Oct. 25, 2012) (recommended for full-text publication).
As most bankruptcy practitioners know, a debtor’s pre-petition cause of action – whether for personal injury, breach of contract, or other claim – is property of the bankruptcy estate. Now, the Sixth Circuit has clarified that only the trustee can file suit in connection with a Chapter 7 debtor’s pre-petition cause of action, unless the action is abandoned. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 7
Bankruptcy practice reminder: Complaints require “well-pleaded factual allegations,” not just legal conclusions
Moyer v Koster et al (In re Przybysz), Adv. Pro. Case No. 12-80174 (Hon. Scott W. Dales, Sept. 25, 2012).
A recent decision from the Bankruptcy Court of the Western District of Michigan serves as a lesson and reminder to attorneys that complaints must do more than recite legal conclusions – they also must allege sufficient facts to put defendants on notice of the claims and of possible defenses. Read More ›
Categories: Chapter 7, Western District of Michigan
Bankruptcy Court for the Western District of Michigan Adopts New Local Rules
The local rules for the Bankruptcy Court for the Western District of Michigan have been amended, effective August 1, 2012. The new rules can be found here in their entirety.
A redline version of the rules, showing the amendments, can be found here. (We have identified that the following link is no longer active, and it has been removed)
Among other changes, practitioners should review the following amendments: Read More ›
Categories: Western District of Michigan
Interpretations of Stern in the Western District of Michigan
This blog entry includes material originally prepared by the author for the 2012 FBA Bankruptcy Seminar.
The U.S. Supreme Court’s decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), immediately cast a shadow of uncertainty on bankruptcy courts’ constitutional authority to enter final orders. But Stern leaves many questions unanswered, and the bankruptcy judges within the Western District of Michigan have differed as to whether the case should be interpreted narrowly or broadly. As a result, depending on the presiding judge in a particular case, Stern may be critically important or unworthy of mentioning. The following is a brief review of cases in this district that address the scope of Stern. Read More ›
Categories: Chapter 7, U.S. Supreme Court, Western District of Michigan
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