REPORT RELEASED ON FY2013 FEDERAL COURT CASELOADS, BANKRUPTCY CASES DROPPED 12 PERCENT
Individuals and businesses filed 1,107,699 bankruptcy petitions in FY2013, 12 percent fewer than in the previous year and the lowest total since FY2008, when 1,042,806 petitions were filed, according to the "2013 Judicial Business of the U.S. Courts" report released today by the Administrative Office of the U.S. Courts. The report said that FY2013 was the third consecutive yearly decline, marking a cumulative drop of 31 percent from the 1,596,355 petitions filed in 2010. Terminations of bankruptcy cases fell 8 percent in FY2013 to 1,197,918. Because terminations exceeded filings, the total of 1,534,652 cases pending on September 30, 2013 was 6 percent below the total number of pending cases one year earlier. The report also showed that filings of adversary proceedings fell 17 percent to 44,555 (down 9,376 proceedings). Terminations of adversary proceedings declined 20 percent to 53,512, and pending adversary proceedings dropped 13 percent to 56,843. Click here to read the full report.
ANALYSIS: AS HAMP WINDS DOWN, ASSISTED HOMEOWNERS TO FACE HIGHER RATES
Five years after the Home Affordable Modification Program (HAMP) bailed out more than 1 million struggling homeowners, many who got the relief may end up losing their homes after all, according to an analysis yesterday in the Washington Post. Nearly 30 percent of those who qualified for HAMP relief have defaulted again, and roughly 800,000 borrowers who remain enrolled in the government's flagship program will see their mortgage interest rates gradually rise starting this year -- eventually increasing payments by more than $1,000 a month in some cases, according to a recent federal analysis. As the higher payments kick in, regulators and consumer advocates fear that homeowners won't be able to stay current on their mortgages, placing an unwelcome strain on the housing market and potentially on economic growth. Since HAMP's launch in 2009, average household income has been flat for all but the highest earners. And while home prices have climbed in the past two years, many borrowers continue to owe more on their mortgages than their homes are worth, making it difficult to sell their properties or refinance their way out of trouble. Obama administration officials are defending HAMP, saying that they are prepared to respond if there is a significant uptick in delinquencies among the homeowners. Read more.
U.S. PROJECTS $179 BILLION PROFIT FROM FANNIE MAE, FREDDIE MAC
Fannie Mae and Freddie Mac could return $179.2 billion in profits to taxpayers over the next 10 years if they continue operating under federal conservatorship, Bloomberg News reported yesterday. The U.S.-owned mortgage-finance companies, seized by regulators during the 2008 credit crisis, have returned to profitability as the housing market has been recovering. By the end of this month, they will have sent $202.9 billion back to the Treasury, which counts it as dividends on the U.S. investment and not repayment of the $187.5 billion they got in taxpayer aid. The projections, released today as part of an annual analysis prepared by the Office of Management and Budget, have tripled from last year, when budget-writers had forecast a $51 billion profit from Fannie Mae and Freddie Mac through 2023. Read more.
CFPB TO MAIL DEBT-COLLECTION SURVEYS TO CONSUMERS
The Consumer Financial Protection Bureau on Friday issued a public notice and request for comment over a plan to mail surveys to consumers "to learn about their experiences interacting with the debt collection industry," InsideARM.com reported yesterday. The CFPB plans to use the survey data to inform its rulemaking process for debt collection, but the timeframe of the survey may push back any new rules. According to the notice, the survey will ask consumers whether they have been contacted by debt collectors in the past, whether they recognized the debt that was being collected, and about their interactions with the debt collectors. The survey will also ask consumers about their preferences for how they would like to be contacted by debt collectors, opinions about potential regulatory interventions in debt-collection markets, and about their knowledge of their legal rights regarding debt collections. The CFPB said that it will take between two and three months to execute the survey and collect responses. After that, it will need some additional time to compile the data. In total, the Bureau predicts that it will have a report on the survey ready for public distribution 6-8 months after the survey process begins. Read more.
LATEST ABI PODCAST EXAMINES RECENT CASES INVOLVING ENVIRONMENTAL LIABILITIES IN BANKRUPTCY, INCLUDING FREEDOM INDUSTRIES
The latest edition of ABI's podcast features ABI Resident Scholar Prof. Charles Tabb talking with James Redwine, an independent consultant, trustee and lawyer based in Baton Rouge, La. Redwine, a frequent contributor to the ABI Journal's "Toxins-Are-Us" column and who formerly served as vice president of Environmental for Motors Liquidation, talks about the environmental liabilities in recent cases, including liabilities involved in the Freedom Industries case. Click here to listen to the podcast.
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NEW ABILIVE WEBINAR ON MARCH 20 EXAMINES HOW TO DRAFT LOAN WORKOUT AGREEMENTS
The next abiLIVE webinar will take place on March 20 from 1-2:30 p.m. ET and will examine how to draft loan workout agreements. Learn the purpose and legal underpinnings of the various component parts of frequently used workout documents such as forbearance agreements, intercreditor agreements and restructuring/override agreements. The panel will focus on real-world examples of good and bad provisions of workout documents and will provide drafting tips. Group discounts available! Click here to register.
ABI MEMBERS WELCOME TO ATTEND "THE LEGACY OF MR. PONZI: THE MADOFF AND STANFORD CASES" PROGRAM ON MARCH 28 PRESENTED BY THE AMERICAN COLLEGE OF BANKRUPTCY
The American College of Bankruptcy First Circuit Fellows will present "The Legacy of Mr. Ponzi: the Madoff and Stanford Cases" program from 1-4 p.m. ET on March 28 at the Boston College Law School in Newton, Mass. The program will include a panel discussion featuring the Madoff trustee, a co-Liquidator of Stanford International Bank, and reporters from the New York Times and Associated Press who covered the Madoff and Stanford cases. There is no charge to attend the program. For more information or to register, please click here.
LEADING SCHOLARS TO PRESENT RESEARCH AND PROPOSALS FOR POTENTIAL CHAPTER 11 REFORMS AT THE ABI ILLINOIS SYMPOSIUM ON CHAPTER 11 REFORM APRIL 3-5
Advancing the dialogue on important reform issues in conjunction with ABI's Commission to Study the Reform of Chapter 11, ABI and the University of Illinois College of Law have assembled leading scholars to present academic papers on issues related to the Commission's work. Scholars will present papers and debate the consequences of the increased importance of secured credit to modern restructuring law to members of the Commission and fellow scholars at the ABI Illinois Symposium on Chapter 11 Reform at the Kirkland & Ellis Conference Center in Chicago on April 3-5. The papers presented at the Symposium will be published in a forthcoming issue of the University of Illinois Law Review.
For a schedule containing a list of all presenters and commentators at the Symposium and to register, please click here.
NEW CASE SUMMARY ON VOLO: GONZALEZ V. MASSACHUSETTS DEPARTMENT OF REVENUE (1ST CIR.)
Summarized by Bodie Colwell of Bernstein Shur
The Bankruptcy Appellate Panel affirmed the U.S. Bankruptcy Court for the District of Massachusetts' determination that the debtor's state tax liabilities were dischargeable even though his tax returns were filed late. Applying the Massachusetts law on the definition of a "return," the BAP found that the debtor's late filed returns were returns for the purposes of the "hanging paragraph" of § 523.
There are more than 1,200 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: IS UCC ARTICLE 9 THE ACHILLES HEEL OF BITCOIN?
A recent post on the ABI Blog Exchange examines why Bitcoin hasn't fallen apart because of the way Article 9 of the Uniform Commercial Code (UCC) operates.
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.
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The U.S. Trustee should generally appoint a single creditors' committee in jointly administered bankruptcy cases.
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