Debt For Military Education Not Dischargeable
July 13, 2006
The 3rd Circuit has ruled the military equivalent of a student is not dischargeable. A former student of the Air Force Academy challenged the debt repayment for his education after leaving the Academy without completing courses or his debt of service to the armed forces.
The cost of the education then became due, although not typically considered to be a student loan.
The 3rd Circuit treated the loan as one that fit the plain language of non-dischargeable debts under the code as being a debt
“for an educational benefit overpayment or loan made, insured, or guaranteed by a government unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents”
LA Attorney Indicted On Bankruptcy Fraud Charges
June 23, 2006
Stephen Yagman, a civil rights attorney in Los Angeles, has been indicted on bankruptcy fraud charges. The lawyer has filed many civil rights suits including suits against the Los Angeles County Sheriffs Office.
New York Sues Debt Collectors
June 23, 2006
Eliot Spitzer has sued several New York debt collectors for abusive debt collection. Read the full story at Bill McLeod's Law Blog – Mcleod Law Offices, P.C.- Massachusetts Bankruptcy, Employment Law and Fair Debt Collection Practices Attorneys in Boston
The suit alleges that the Boyajian companies (1) used dunning letters and falsely stated or implied that they came from attorneys; (2) falsely accused debtors of criminal activity, and threatened debtors with arrest; and (3) failed to supply verification of the debt when requested to do so.
In addition, they were apparently trying to collect on bad checks which were more than 6 years old – and in New York, the statute of limitations for bringing such a claim is 6 years. According to a report here the outfits were apparently collecting checks made payable to Ames and Bradlees, two retailers than have long since been out of business.
Goldman Sachs has hired James H. M. Sprayregen, from Kirkland and Ellis to run its restructuring practice. What does this mean to the rest of world?
Not alot unless you’re a bankruptcy and you want to use his new salary to make you feel inferior… or it means a ton if you are financial market analyst.
The hiring should be a sign of the times that the corporate bankruptcies are going to start flying. With market roller coaster rides like we’ve had recently, the hiring is a further indicator of a tentaive market at best.
Getting Help to See the Sunshine Through the Rain – New York Times
Workers Compensation as Preferences Under BAPCPA
June 16, 2006
Recent Supreme Court majority in the case of Howard Delivery Serv., Inc. v. Zurich American Ins. Co. is strange at best with Justices Scalia and Thomas joining among others, Justice Ginsburng, who had this to say in the 6-3 decision regarding preference payments
In holding that claims for workers' compensation insurance premiums do not qualify for § 507(a)(5) priority, we are mindful that the Bankruptcy Code aims, in the main, to secure equal distribution among creditors. We take into account, as well, the complementary principle that preferential treatment of a class of creditors is in order only when clearly authorized by Congress….[W]e are guided in reaching our decision by the equal distribution objective underlying the Bankruptcy Code, and the corollary principle that provisions allowing preferences must be tightly construed…. Any doubt concerning the appropriate characterization [of a bankruptcy statutory provision] is best resolved in accord with the Bankruptcy Code's equal distribution aim. We therefore reject the expanded [i.e., "plain meaning"] interpretation Zurich invites. (Citations omitted.
Debt Collectors in the Crosshairs of NYC
June 14, 2006
New York City may be getting ready to take on a few debt collectors.
In response to a 70 percent increase in consumer complaints in two years, the New York City Department of Consumer Affairs held information gathering hearings, and may propose tighter restrictions on debt collecting agencies.
BAPCPA Outline
June 14, 2006
The long awaited and promised world’s most comprehensive outline of BAPCPA is now available: Bankruptcy Litigation Blog: BAPCPA Outline: Part I, Section B – Judicial Commentary: BAPCPA’s “Plain Meaning” Not Followed
83% Decrease in Arizona Bankruptcy Filings
May 25, 2006
According to Mohave Daily News: Business, bankruptcy filings in Arizona dropped like a rock in the first four months of the year.
From January through April 2005, 10,592 filings were reported by the U.S. Bankruptcy Court of Arizona. The same period this year saw only 1,777 cases, of which 1,374 were so-called ‘‘Chapter 7'' liquidation filings.
‘‘For April, we're almost 84 percent below what we had for the same month last year,'' said Terrence Miller, clerk of the U.S. Bankruptcy Court of Arizona.
‘‘Year to date, we're about 83 percent below. We had that large upsurge right before the new law took effect . . . so we're finishing up working through all those cases.''
With figures like 83 percent below previously levels, you will soon see courts laying off personnel. The courts are already on tight budgets that are tied to case loads.
Watch the chapter 13 trustee's office, notrious for their large staffs, to also start laying people off right and left.
Technorati Tags: bankruptcy, chapter 13
Credit Counseling Agencies Slammed By IRS
May 16, 2006
IRS cracks down on abusive credit-counseling operations – MarketWatch
The IRS has revoked the tax-exempt status of many credit counseling agencies after audits of the companies.
The real world of credit-counseling according to the article goes something like this:
"We were seeing almost boiler rooms selling these plans," said Steven Miller, commissioner of tax-exempt and government entities at the IRS, in a telephone interview.
"If you weren't qualifying for a debt-management plan, they were hanging up on you. Even if you did qualify, they made no real attempt in many instances [to ascertain] whether you were better off in a debt-management plan," he said.
And, as part of their tax-exempt status, these organizations are supposed to provide education, but that's not what was happening, Miller said. "These organizations are supposed to talk to people and do some education about how to get their credit lives in order," he said. "There was too much salesmanship and sales of debt-management programs, and not enough education."
This crackdown on counseling agencies comes at a time when consumers seeking to file bankruptcy are now forced to complete a credit-counseling session, under the rules of the new bankruptcy law that went into effect in October.
Bankruptcy and Restructuring Blog has a rundown on the recent 9th Circuit opinion soldifying the Bankruptcy Trustees exclusive right to assert legal claims on behalf of the bankruptcy estate.
“The Ninth Circuit noted that Bankruptcy Code section 323
gives the trustee the capacity to sue on behalf of the estate. The
Court further acknowledged that, under some circumstances, a trustee
may authorize others to bring suit on the estate’s behalf. However, the
Ninth Circuit held that the right to bring suit belongs to the trustee
in the first instance, not creditors.”
Read the full post: Bankruptcy and Restructuring Blog: BANKRUPTCY TRUSTEE HAS THE EXCLUSIVE RIGHT TO ASSERT LEGAL CLAIMS ON BEHALF OF THE BANKRUPTCY ESTATE
