Courts Split on Whether Suits in Bankruptcy Court Can Violate the Automatic Stay
A minority of courts hold that a suit in bankruptcy court can violate the automatic stay if based on a claim that could have been brought before bankruptcy and did not arise under the Bankruptcy Code.
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On Dismissal of a ‘13,’ Barton May (or May Not) Bar Garnishments
Section 1326(a)(2) by itself does not bar garnishment of funds held by a trustee on dismissal before confirmation.
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Corporations Are More Likely Eligible for the SBRA than Owners of Defunct Businesses
Utah’s Judge Thurman says that a corporation liquidating its remaining assets is engaged in business ‘activities’ and is therefore eligible for Subchapter V.
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Denver Judge Opens the SBRA Door Wide for People with Debt from Failed Companies
A fast-food worker can (conceivably) qualify as a small business debtor under Subchapter V, according to Bankruptcy Judge Thomas B. McNamara.
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Deeply Subordinated Creditor Barred from Voting or Objecting to Plan Confirmation
Subordination agreement did not transfer voting rights, but prudential standing nevertheless barred the subordinated creditor from participating in confirmation, Judge Somers says.
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Personal Injury Settlement Not Included in Calculating Projected Disposable Income
Judge McNamara of Denver allowed chapter 13 debtors to keep all of a $46,500 personal injury settlement received before filing.
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Inability to Cover Accruing Interest Was Pivotal on Discharging Student Loans
Eligibility for an income-based repayment program is relevant only on the third Brunner test regarding good faith.
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Amount of an Exemption Isn’t Required to Make an Order Final, Circuit Majority Says
Tenth Circuit majority believes that the grant or denial of an exemption is sufficient to make the order final, even if the bankruptcy court hasn’t ruled on the extent or amount of the exemption.
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Ponzi-Schemer’s Assistant Liable Under UFTA Even Without Knowledge of Fraud
Providing a necessary service for a Ponzi-schemer was enough to make an employee liable to return compensation as a fraudulent transfer.
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Automatic Stay Applies Automatically to the Archbishop of a Bankrupt Archdiocese
Although a lawsuit against the archbishop violated the automatic stay, Judge Thuma of Albuquerque declined to impose sanctions because precedent was ‘spotty or nonexistent.’
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