7th Circuit

Although Unusual, Postpetition Retainers Are Permissible, Chicago Judge Says

The possibility that interim compensation allowances can be disgorged means that counsel won’t have an undue advantage over other administrative creditors, Judge Cleary says.

PACA Debt Isn’t Nondischargeable, Chicago Judge Says, Siding with the Minority

Lower courts are split on whether violating a PACA trust results in a nondischargeable debt. The question is on direct appeal to the Eleventh Circuit.

Complaint Survives Against Chicago for Not Releasing Impounded Cars Immediately

Despite Fulton, a Chicago bankruptcy judge rules that the City of Chicago might have violated Section 362(a)(4), (a)(6) or (a)(7) by refusing to release impounded cars immediately after a debtor files a chapter 13 petition.

Judge Barnes Tells Gamblers What Records to Keep to Win a Discharge in Bankruptcy

The suggestion that the debtor never won undercut the poker player’s testimony about uncorroborated gambling losses.

Objections to Priority Claims May Follow Confirmation of a Chapter 13 Plan

Confirming a chapter 13 plan on the assumption that a claim was entitled to priority didn’t bar the debtors from later objecting to the priority of the claim.

Discharge Cuts Off Future Liability on a Guaranty, Some Courts Hold on a Split

The ‘conduct’ test in the Seventh Circuit, not the ‘accrual test,’ determines when a claim arose and whether it was discharged.

Courts Have Made the FDCPA a ‘Dead Letter,’ Chicago District Judge Says

The opinion tells plaintiffs what actions to take before filing suit to ensure constitutional standing to pursue a claim under the FDCPA.

Seventh Circuit Defines What It Means to Practice Law

The Seventh Circuit provided a useful guide for how much supervision a lawyer must provide when a nonlawyer is doing most of the work.

Cap on Employee Benefit Claims Is Per Plan, Not Per Debtor, Seventh Circuit Says

The $13,650 cap on priority claims for each employee under an ‘employee benefit plan’ applies to each benefit plan, not to all of an employer’s benefit plans added together, the Seventh Circuit says.

Holding Impounded Cars Still Might Violate the Automatic Stay, Seventh Circuit Says

Seventh Circuit says that Fulton left open the question of whether holding an impounded car violates Sections 362(a)(4) or (a)(6).