OCTOBER BANKRUPTCY FILINGS INCREASE 11 PERCENT OVER PREVIOUS MONTH, CONSUMER FILINGS UP 12 PERCENT
Total U.S. bankruptcy filings for the month of October increased 11 percent compared to September, according to data provided by Epiq Systems, Inc. October bankruptcy filings totaled 89,875, up from the 80,668 filings registered in September 2013. The 86,331 total noncommercial filings for October represented a 12 percent increase from the September noncommercial filing total of 77,274. Total commercial filings for October 2013 were 3,544, representing a 4 percent increase from the 3,394 filings in September.
"Despite this aberration, monthly year-over-year filing totals have declined for 35 consecutive months," said ABI Executive Director Samuel J. Gerdano. "We expect the full year total to drop to a level last seen in 2008 as sustained low interest rates and sluggish consumer spending continue to suppress bankruptcy filings." The 89,875 total bankruptcy filings in October represented an 11 percent decrease from the 101,399 filings registered in October 2012. Total commercial filings for October 2013 were 3,544, representing a 27 percent decrease from the 4,837 filings during the same period in 2012. The October commercial chapter 11 filing total of 515 represented a 6 percent decrease from October 2012's total of 549. In addition, the 86,331 total noncommercial filings for October represented an 11 percent drop from the October 2012 noncommercial filing total of 96,562. Click here for the full statistical release.
ANALYSIS: END OF AMERICANS' DEBT HANGOVER SEEN AS BOOSTING GROWTH
A pickup in borrowing will give the world's biggest economy a much-needed boost next year even as federal government austerity pinches growth, according to an analysis today in Bloomberg News. The resulting gains in personal spending will help counter the effects of federal budget cuts that are weighing on economic expansion, according to Ben Garber, an economist at Moody's Capital Markets Research Inc. in New York. Federal outlays relative to the size of the economy declined to 22 percent in 2012, the smallest amount since 2008, according to figures from the Congressional Budget Office, which projects that the share will drop over the subsequent five fiscal years to 20.6 percent in 2017. While the government has been cutting back, consumers are well on the road to recovery and will be in position to take up the slack, according to Garber. Household debt as a share of income was 92.2 percent last quarter, a decade low and down from its peak of 114 percent in 2009. Read more.
CUNA LOOKS TO PUSH BEYOND THE 15-YEAR BARRIER FOR STUDENT LOANS
The Credit Union National Association (CUNA) is proposing that its members be allowed to offer student loans that go beyond the 15-year payoff mark, the current limit for student loans offered by credit unions, according to a post today on MainStreet.com. "The 15-year standard student loan made sense in years past when the total debt taken out was much lower," said Paul Gentile, CUNA's executive vice president. "Now students are borrowing more. They need more time to pay off these loans." CUNA representatives met with officials from the Consumer Financial Protection Bureau (CFPB) last month to make the case for the longer loan. Jane Glickman, spokesperson for the Department of Education, acknowledged that the workarounds currently available for federal loans went beyond 15 years; the variety of pay-off scenarios essentially means that there is no hard benchmark in the federal student loan space. Except for mortgages, credit unions, whose main regulator is the National Credit Union Association along with the CFPB, primarily make loans with a 15-year term. Extending the timeframe would also let credit unions consolidate multiple federal student loans. Gentile said that the average rate for private student loans through credit unions is 6.25 percent. But the interest rate climate is likely to become volatile throughout the rest of the decade. According to FinAid.org, the best private student loan rates will be roughly equal to the prime rate, charged to the most credit-worthy customers, plus 0.50 percent with no fees, similar to the Federal PLUS Loan. Last week's rate was 3.25 percent But scoring one of these loans requires a top-notch credit score -- something which FinAid says that only about 20 percent of borrowers have. Read more.
For more on student loan debt, make sure to register for ABI's Nov. 15 Workshop, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" For more information or to register, please click here.
U.S. TAKES AIM AT "FORCED" MORTGAGE INSURANCE
The Federal Housing Finance Agency (FHFA) is pushing ahead with a ban on fees for "force-placed" insurance policies -- expensive coverage that is thrust upon borrowers whose regular homeowners' policy has lapsed -- despite industry objections that such a move encroaches on state regulators, the Wall Street Journal reported today. New York and other states are cracking down on such policies. Rather than set rules on what insurers can charge for such policies, which is generally the purview of states, the FHFA will prevent mortgage servicers that do business with Fannie Mae and Freddie Mac from accepting certain payments. Such a move essentially would bar the entire industry from the practice, since Fannie and Freddie back about two-thirds of U.S. home loans. The FHFA is expected to ban two forms of compensation from insurers to banks that collect borrowers' payments on home loans: sales commissions for placing coverage with particular insurers, and reinsurance relationships in which the bank or mortgage servicer is paid for taking on a portion of the insurance risk. The FHFA move comes on the heels of efforts by insurance regulators in New York, California and Florida to bring down the cost of force-placed insurance through measures such as rate reductions and bans on the fees paid by the insurers. Read more. (Subscription required.)
HOMEOWNERSHIP RATE CLIMBS FROM LOWEST LEVEL SINCE 1995
The U.S. homeownership rate climbed from its lowest level in 18 years, signaling that the real estate rebound is drawing in more buyers, Bloomberg News reported today. The share of Americans who own their homes was 65.3 percent in the third quarter, up from 65 percent in the previous three months, the Census Bureau reported today. The prior level was the lowest since the third quarter of 1995. Rising real estate values are removing negative equity, helping homeowners avoid foreclosure while also luring would-be purchasers into the market before prices and mortgage rates go higher. The pool of eligible buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning. Home prices jumped 12 percent in September from a year earlier, the 19th straight annual increase, Irvine, Calif.-based CoreLogic Inc. said today. Read more.
Regulators have proposed a new set of limits for large traders of commodities such as oil, gold and sugar, a year after a federal court tossed out an earlier set of rules, the Wall Street Journal reported today. The Commodity Futures Trading Commission voted 3-1 to propose a revised version of so-called position limits, which aim to curb sharp price spikes by limiting the percentage of the market that any one firm can control in certain commodities. CFTC Chairman Gary Gensler argues that the revised rules would survive any renewed judicial challenges because the agency had taken steps to flesh out their legal justification. In arguing for the rules, the agency cites the alleged cornering of the silver market by the Hunt brothers of Texas in 1979 and 1980 as well as the more recent manipulation of the natural-gas markets by hedge fund Amaranth Advisors LLC. Read more. (Subscription required.)
TOMORROW! RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM; ATTEND IN PERSON OR VIA LIVE WEBSTREAM
You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held tomorrow from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:
- Living with the New CFPB Mortgage Servicing Rules
Business Lending: Navigating What Lies Ahead
- Business Lending: Recent Legal Developments
For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.
CHAPTER 11 COMMISSION HEARING ON THURSDAY TO EXAMINE CHAPTER 11 PLAN PROCEDURE AND DISTRIBUTION- WEBCAST AVAILABLE!
ABI's Commission to Study the Reform of Chapter 11 will hold a public hearing on Thursday at 2:30 p.m. ET to examine chapter 11 plan procedure and distribution at ABI's 10th Annual Complex Financial Restructuring Competition. Witnesses set to testify at the hearing include:
- Thomas J. Salerno of Squire Sanders LLP (Phoenix)
- Prof. George W. Kuney of the University of Tennessee College of Law (Knoxville, Tenn.)
- Maria Chavez-Ruark of Saul Ewing LLP (Baltimore)
- Courtney Engelbrecht Barr (on behalf of International Women's Insolvency & Restructuring Confederation) of Locke Lord LLP (Chicago)
- Kathleen M. Miller (on behalf of International Women's Insolvency & Restructuring Confederation) of Smith, Katzenstein & Jenkins LLP (Wilmington, Del.)
- Prof. Anthony J. Casey of University of Chicago Law School (Chicago)
- Prof. S. Todd Brown of University of Buffalo Law School (Buffalo, N.Y.)
Prepared materials, video of previous hearings and more are available at http://commission.abi.org. To watch live webcast of the hearing, please visit the website on Nov. 7 at 2:30 p.m. ET.
EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15
Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:
- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends
- Repayment Options: Income Based Repayment and New Lender/Servicer Programs
- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration
For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.
ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER
The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup sponsored by Great American Group is based on your top three scores from the seven ABI events. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.
NEW ABILIVE WEBINAR LOOKS AT HOW TO HIRE THE RIGHT FINANCIAL ADVISORS
ABI's Financial Advisors & Investment Banking Committee
is proud to present the next abiLIVE webinar, "How to Hire the Right Financial Advisors," on Dec. 11 from 1-2:15 p.m. ET. The program will provide attendees with an overview and basic understanding of the different types of financial advisors that may be relevant for in- and out-of-court cases. Topics include:
- The different types of financial advisors available;
- The benefits and limitations for each category of advisor; and
- How to select the right advisor for the job.
Speakers on the webinar include:
-Daniel F. Dooley of MorrisAnderson (Chicago)
-Gregory S. Hays of Hays Financial Consulting LLC (Atlanta)
-Ivan Lehon of Ernst & Young (New York)
-Allen Soong of Deloitte CRG (Los Angeles)
• Teri Stratton of Piper Jaffray & Co. (El Segundo, Calif.)
Registration is $75 for ABI members/$175 for non-members. Have a number of colleagues that would like to participate? Take advantage of group pricing for ABI members: register 5 or more and the registration cost drops to $60 per person!
Beginning in January 2014, ABI will institute its first dues increase to the regular dues rate in six years. The $20 increase will ensure that ABI can continue to provide you with the latest and most effective tools available in insolvency information and education. You can lock in 2013 rates, and additional discounts, for up to three years by using a multi-year renewal option (save $75!). You can also save 10 percent on future dues by opting into the automated dues program. To renew your membership and save, please go to renew.abi.org.
NOW AVAILABLE FOR PURCHASE; ETHICS CLE AVAILABLE! "BANKRUPTCY IN DEPTH" VIDEO PREVIEWS UPCOMING SUPREME COURT BANKRUPTCY CASES
Available now for purchase from ABI's eLearning Center (http://cle.abi.org) is a new "Bankruptcy In Depth" video featuring ABI Resident Scholar Kara Bruce and Eric Brunstad of Dechert LLP (Hartford, Conn.) previewing the bankruptcy cases that the Supreme Court will consider during its 2013 term. Brunstad, who has argued many cases before the Court and is an expert in bankruptcy appellate practice, discusses in depth Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor's exempt assets, and ExecutiveBenefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court's authority to adjudicate Article III matters. He also provides a candid view of what it is like to argue a case before the Court and an in-depth analysis of the issues involved with the upcoming cases. Available for the member price of $75, ABI will also seek 1.25 hours of ethics CLE credit in 60-minute-hour states and 1.5 hours of credit in 50-minute-hour states for this program. This online CLE program is presumptively approved in CA, DE, FL, GA, HI, IL, NV, NJ, NY (Approved Jurisdiction Policy), RI and SC. Credit hours granted are subject to approval from each state, which has not been determined. To purchase the new "Bankruptcy In Depth" video, please click here.
ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS
Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.
NEW CASE SUMMARY ON VOLO: CARROLL V. LOGAN (4TH CIR.)
Summarized by Elizabeth Gunn of Sands Anderson PC
The Fourth Circuit adopted the majority view that § 1306 modifies the § 541 time period in chapter 13 cases, affirming an earlier bankruptcy court ruling. Accordingly, a chapter 13 bankruptcy estate consists of (i) property described in § 541 and (ii) the kind of property described in § 541 and acquired before the chapter 13 case is closed, dismissed, or converted.
There are more than 1,000 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.
NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: RULE 30(b)6 EXAMINATION CONSIDERATIONS
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post took a closer look at the use for obtaining oral testimony of an organization itself through the service of Notice of Deposition under Federal Rule of Civil Procedure 30(b)6.
The CFPB's new mortgage servicing rules will be the focus of the Nov. 6 abiWorkshop. For more information or to register, please click here.
Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.
ABI Quick Poll
Can litigant consent enable the bankruptcy court to enter final judgment in a matter which, after Stern, falls outside the court's constitutional authority?
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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