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Vol 13, Num 4 l August 2015

Technology and Intellectual Property

► In This Issue:

Nowhere to Go: Troubleshooting Consumer Cases Where the Debtor May Not Be Eligible for Relief under Any Code Chapter

Katherine E. Iskin
Office of the Standing
Chapter 13 Trustee

South Bend &
Fort Wayne, Ind.

Section 109 of the Bankruptcy Code has requirements that define who may be a debtor. In consumer cases, a debtor may be ineligible for chapter 7 if he/she has significant income; more specifically, if the debtor has failed the means test set forth in § 707‌(b).

In a chapter 13 case, § 109‌(e) mandates that the debtor must have both a regular income and debts that fall within statutory guidelines. From a policy standpoint, this makes sense: debtors who have the means to repay their creditors belong in a chapter 13. Debtors with both a high income and high debts might be exempt from the means test as business debtors and eligible for chapter 7, or may be better served in an individual chapter 11 case. » Read More

Between Scylla and Charybdis: Communicating with Debtors During and After Bankruptcy

ABI

Robert C. Keller
Russo, White & Keller, P.C.
Birmingham, Ala.

Odysseus faced an impossible choice. Should he face Scylla with her six heads, three rows of shark-like teeth, and long necks who lived in a cavern above the sea, ready to devour anyone who came close to her mountainous retreat? Or should he face Charybdis, a whirlpool monster who devoured everything that came into its watery path? He asked Circe, “Could I not somehow steer clear of the deadly Charybdis, yet ward off Scylla when she attacks my crew?” Circe responded, “You must hug Scylla’s rock and with all speed drive your ship through, since it is far better to lose six of your company than your whole crew.“ In other words, there was no avoiding the two evils: Odysseus had to choose the lesser of the two and deal with the consequences.
» Read More

Should Bankruptcy Trustees Retain the Ability to Claw Back College Tuition Payments Under § 548?

ABI

Elizabeth E. Stephens
Sullivan Hill Lewin Rez
& Engel APLC

Las Vegas


Four congressmen have answered “no” to the title question and introduced the Protecting All College Tuition Act of 2015 (PACT). The bill simply provides: “Section 548 of title 11, United States Code, is amended by adding at the end the following: ‘(f) A payment of tuition by a parent to an institution of higher education (as defined in either section 101 or 102 of Higher Education Act) for the education of that parent’s child is not a transfer covered under paragraph (1)(B).’”

The stated purpose of the bill is “to provide an exception to the avoidance of transactions by bankruptcy trustees under section 548 where the transaction was a good faith payment by a parent of post-secondary education tuition for that child.” The bill’s sponsor admitted that he introduced the bill in reaction to an article in the Wall Street Journal that highlighted what appeared to be a growing trend among bankruptcy trustees to seek to avoid tuition payments as fraudulent transfers.
» Read More

Ninth Circuit Discharges Student Loan on Issue of First Impression

ABI

Shannon A. Doyle
eBankruptcy Assistants, Inc.
Long Beach, Calif.



By now, we are all aware of the student debt crisis this country and the lack of relief available through bankruptcy. Borrowers have an uphill battle when it comes to meeting the undue-hardship test and qualifying for a discharge of their student loans. While the government has addressed the problem through Income Based Repayment Plans for government loans, private student loans remain an extreme economic burden for millions of people.

Although some courts seem to be loosening the standard for a showing of undue hardship, the noose remains tight. However, there is some good news. In a case of first impression, the Ninth Circuit has found a loophole, allowing for the discharge of certain student loans without a showing of undue hardship. In Institute of Imaginal Studies, dba Meridian University vs. Christoff, the Ninth Circuit addresses whether tuition advanced to debtor by a for-profit college is excepted from discharge pursuant to § 523(a)(8)(A)(ii).
» Read More

NEWSnazzy New Website Available for the 27th Annual Winter Leadership Conference

ABI has launched a new website and registration page for this year’s Winter Leadership Conference! Join us Dec. 3-5, 2015, at the historic Arizona Biltmore in downtown Phoenix for CLE, networking and breath-taking views. Offering up to 12/14 hours of CLE/CPE credit and 2.75/3 hours of ethics, there are a variety of sessions with topnotch speakers for consumer practitioners, as well as financial advisors.

The Consumer Bankruptcy and Legislation committees will be jointly providing attendees with a student loan update titled "Recent and Pending Legislation Regarding Student Loans and CFPB Regulations for Mortgage Servicing." Scheduled for Saturday, from 9:30 - 10:45 am, speakers for this session include Edward C. Boltz (The Law Offices of John T. Orcutt, PC; Durham, NC), Prof. Susan E. Hauser (North Carolina Central University School of Law), and Debra L. Miller (Standing Chapter 13 Trustee; South Bend, IN).

Other consumer-related sessions will include:

  • Filing a Claim on a Time-barred Debt Violates the FDCPA
  • BAPCPA Consumer Issues: Ten Year Anniversary Special
  • Estate Planning, Divorce and Bankruptcy: When World’s Collide
Highlights from the conference include:
  • Optional events, including a golf tournament, kayaking, tennis, horseback riding and much more
  • Great Debates on chapter 11 plans, whether a bankruptcy judge can disband a creditors’ committee and must a creditor file a proof of claim
  • BAPCPA Consumer Issues: 10-Year Anniversary Special
  • Nine joint committee sessions, provided by ABI’s 18 committees
  • A live Bloomberg “Eye on Bankruptcy” luncheon presentation
  • A special Casino Night!
  • A judges’ roundtable on hot-button issues

Early-bird registration ends Oct. 2, so be sure to register to take advantage of the savings!

23rd Annual Southwest Bankruptcy Conference

 

20th Annual Views from the Bench

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