Generally, if a debtor pays an unsecured creditor shortly (if not an insider, within 90 days) before a bankruptcy is filed, allowing the creditor to receive more than they would in the bankruptcy if no payment had been made, then the trustee can recover these funds. Courts have created an equitable exception to the preference right where funds were provided to the debtor by a third party to pay a specific debt, concluding that such funds are not recoverable as a preference because the funds were never property of the debtor, thus the transfer does not disadvantage any creditor. This do
Too often counsel do not fully disclose fees and limits of representation in the fee disclosure required by Rule 2016(b). A court in New Jersey examined this issue in In re Busillo, 2018 Bankr. LEXIS 3352, Case #15-15627 (Bankr. D.N.J. Oct 29 2018). The court examined three cases by the same firm, in which the firm filed 2016(b) statements asserting $3,500 received prior to the filing of the statements, with a balance due of $0, and that:
Anyone who does farm bankruptcies should be familiar with the Perishable Agricultural Commodities Act (PACA). This law provides in part that proceeds from the sale of produce received by a merchant, dealer or broker shall be held in trust for the benefit of all unpaid suppliers or sellers of such produce until payment of all sums due to the suppliers or sellers. This gives such sellers a superior right to such funds over non-PACA creditors, including secured creditors. Thus it is critical to determine whether a purported PACA claim actually qualifies as such a claim to determine th
Most litigation involving the automatic stay revolves around lifting or extending the stay. In rare cases, the court may go back and retroactively annul the stay in a current or prior case. The court found such grounds in In re Schonscheck, 2018 Bankr. LEXIS 3231 Adv #18-2027-GMH, (Bankr. E.D. Wis. Oct.
A not uncommon issue in chapter 13 cases is what happens when debtors are paying 100% to unsecured creditors but are not committing all their disposable income to the plan in the process. The chapter 13 trustee's often object, requesting that interest be paid to the unsecured creditors when debtors do not commit all disposable income to the plan. A bankruptcy court in Indiana had the opportunity to rule on this issue in IN RE: GEORGE M. McKINNEY & EUGENIA L. McKINNEY, Debtors., No.
The Bankruptcy Appellate Panel of the 8th Circuit had opportunity to examine whether failure to timely disclose assets, even if in bad faith, can preclude the debtor from exempting such assets. In
The appeal in In re: LINO MIRANDA MUNOZ, Debtor. SUPERIOR CLEANING SERVICE, LLC, Appellant, v. LINO MIRANDA MUNOZ, Appellee., No. 17-CV-1910-WJM-STV, 2018 WL 4214439, (D. Colo. Sept.
Discussing an issue that arises with some frequency in cases converted from chapter 13 to chapter 7, the court in In re: JEFFREY J. ROCKWELL d/b/a Rockwell Prods. f/d/b/a Rockwell Prods., Inc., Debtor., No. 15-20583, 2018 WL 4042859 (Bankr. D. Me. Aug.
A court in San Diego has the opportunity to interpret a seldom-used statute regarding willful and malicious injury allegations in a suit filed after the deadline to file a 523(a)(6). The court in In re Ang, No. AP 17-90114-CL, 2018 WL 3965208 (Bankr. S.D. Cal. Aug. 16, 2018) found the debt nondischargeable under 11 U.S.C. 1325(a)(4), which does not have a bar date to file the claim.