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7th Circuit

Another Case Shows the Need to Provide Remedies for Discharge Violations

Discharge was violated, but sanctions are likely out of reach.
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Must a Debtor Be Destitute Before Discharging Student Loans?

Unemployed for 16 months, surviving on food stamps, and living rent-free enabled a debtor to discharge student loans.

Seventh Circuit: Reclamation Claims Are Subordinate to DIP Financing

The 2005 amendments to Section 546(c) departed from state law under UCC § 2-702 by creating a federal rule making reclamation claims subordinate to existing secured claims and DIP financing.
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PACA Doesn’t Give Rise to Denial of Discharge for Defalcation, Chicago Judge Says

A PACA trust lacks the hallmarks of a trust, so a failure to pay a produce supplier doesn’t give rise to a nondischargeable debt for defalcation while acting in a fiduciary capacity, Judge Goldgar says.

Even a $3 Million Claim for Severance Is Exempt in Illinois as Wages, Easterbrook Says

Pleas to injustice and unfairness failed to persuade the Seventh Circuit to depart from a state law exemption for wages.
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Seventh Circuit Limits Punitive Damages to Total Compensatory Damages of $582,000

Despite atrocious mortgage servicing, the circuit court cut a jury’s $3 million award of punitive damages to $582,000.
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Medical Bills Are Held to Be Consumer Debts, Invoking the Means Test

Someone forced into bankruptcy on account of medical bills will also be forced into chapter 13.

Receivership Court May (Sometimes) Bar the Filing of an Involuntary Bankruptcy

Court weighs the relative advantages of receivership versus bankruptcy in deciding whether to bar the filing of an involuntary bankruptcy.

Seventh Circuit Holds that Parking Tickets and Fines Are Chapter 13 ‘Admin’ Expenses

Appeals courts won’t allow bankruptcy to shield debtors from paying parking tickets and fines incurred in the course of a chapter 13 case.
Court: 

Failure to Raise a Stern Objection Violates a Lawyer’s Standard of Care

The lawyer whose waiver led to Wellness International avoided malpractice by the skin of his teeth.

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