Bankr. W.D.N.C.: In re Kennedy- Reasonable Mortgage Attorney Fee's in Chapter 11 Ed Boltz Sun, 02/25/2024 - 01:05 Abstract   Title 11 of the United States Code (the “Bankruptcy Code”) provides a fresh start to the “honest but unfortunate debtor.” Chapter 7 therefore permits a debtor to “discharge their outstanding debts in exchange for liquidating their nonexempt assets and distributing them to their creditors.” Dismissals in chapter 7 are governed by section 707 of the Bankruptcy Code. Section 707(a) governs all chapters of bankruptcy filings and applies when adequate “cause” is shown. There is currently a circuit split regarding whether a debtor’s lack of good faith constitutes cause for dismissal under section 707(a). Under section 707(a), a case may only be dismissed for cause after notice and hearing. Section 707 does not define “cause,” offering only a non-exhaustive list of what may constitute cause. This includes unreasonable delay, nonpayment of fees, and failure to file required information on motion of the U.S. Trustee. As a result, bankruptcy courts are given significant discretion when asked to determine whether there is cause to dismiss under section 707. This is a fact-based inquiry. Courts have found cause to dismiss, for example, where the administration of the estate would require the Trustee to operate the debtor’s business in violation of federal law, or where the dismissal would further the judicial economy without harm to either the debtor or their creditors. This article explores the circuit split surrounding whether a debtor’s lack of good faith is cause for dismissal under section 707(a). Part I analyzes the approaches of the various circuits, beginning with the majority view established by the Sixth Circuit in In re Zick that bad faith is grounds for dismissal. Part II analyzes case law on the issue of bad faith dismissals out of lower courts within the Second Circuit, which has not yet heard the issue. The article concludes with a finding that the Second Circuit is likely to follow the Sixth Circuit’s approach in Zick and accept a debtor’s bad faith as grounds for dismissal under section 707(a) in cases of egregious misconduct. Commentary: The lead case on bad faith under 11 U.S.C. § 707(a)  in the Fourth Circuit is Janvey v. Romero,  which does reserve such dismissals to "cases of real misconduct"  and "serious abuses of the bankruptcy process". For a copy of this article, please see:   Blog comments Attachment Document bad_faith_dismissals_in_chapter_7.pdf (285.11 KB) Category Law Reviews & Studies

Even if you yourself do not have it, social media is ever-present in our lives. Literally billions of people worldwide use platforms like Instagram, TikTok, X/Twitter, Facebook, and more. Many details about someone can be found on social media platforms. There are countless stories of people getting fired, relationships ending, and other bad things happening because of something that came to light on social media platforms. Recently, attorneys have begun to look at the social media platforms of clients and opponents to try and get an edge. If you are looking to obtain or keep disability benefits, this can be troubling. It is entirely possible that things like Facebook and Instagram will be used to try and hurt your disability claim. Interested parties can find things you post, both public and “private,” and use them against you if they work against what you say is true in your disability claim. However, it is also true that social media is only a glimpse into someone’s life, so something that may initially appear compromising may simply be misunderstood by whoever is looking at it. For a free review of your situation by our New Jersey disability attorneys, contact Young, Marr, Mallis & Associates at (609) 557-3081. How Do Posts on Social Media Harm Disability Claims in NJ? Of all the reasons that a claim or application for disability coverage may be denied, a social media post is probably not the first thing that comes to mind. However, online posts can hinder efforts to get disability coverage in more ways than you may initially expect. Your Posts Show Lack of Disability One way that social media posts hurt individuals seeking disability coverage is by demonstrating to insurance companies and application evaluators that you are not, in fact, disabled. For example, suppose you claim you are disabled because you cannot perform basic physical tasks, and after you submit your application, you post videos of yourself kayaking on vacation. That video clearly would show that you are not as totally disabled as you claimed to be. Accordingly, you may be denied coverage by an insurance provider or government program. It also does not matter whether these posts are public or private. There are various ways of getting access to “private” things on social apps. So, if your public-facing page is squeaky clean, but there are private videos showing a lack of disability, you may still be in hot water. Other People’s Posts Your social media pages are not the only ones you need to worry about. Things other people put out online can also compromise your claim. For example, if you claim disability, but a friend’s Facebook page has a video of dancing during a night out, that could raise suspicions as to the extent of your disability. Will Disability Insurance Providers Really Look at My Social Media in NJ? Private insurance companies will absolutely prowl through your social media presence to see if you actually need coverage. Insurance companies are not in the business of paying out every policy all of the time, so they are going to make sure that it makes sense to provide coverage. If you believe there is anything that may raise some eyebrows on your social media pages – even if you are completely deserving of disability coverage – you should discuss it with our NJ disability lawyers so that we can address it when it inevitably comes up. There are different rules for federal programs evaluating whether you are disabled. These programs can generally only look at your social media presence if they suspect you of fraud per HALLEX § I-3-2-40 – a set of rules the SSA uses when hearing claims. Tips For Social Media Use When Applying for Disability in NJ Our Mount Laurel, NJ disability attorneys have put together some tips and tricks to help make sure that your disability application process goes as smoothly as possible. It is important to manage your social media pages during that time because even innocuous posts may sound proverbial alarm bells for someone looking at your application. Limit How Much You Post One important thing to do is limit how much of your life you make available online. Try to keep social media postings to a minimum as you go through the application process. This way, there are fewer chances that someone can take a post out of context and put your claim into question. If you are going to post something, avoid posting things that make it look like you are not disabled. For example, if you are going to post yourself doing a physical activity prior to becoming disabled, it may be best to hold off posting it until after your claim is approved. Even then, if you’re going to post it, be sure that it is crystal clear that this is not a recent video. Additionally, do not post about your disability, work, or other things directly related to your claim. Let Friends Know Your Situation Talk to friends and acquaintances and let them know that you do not want them to post anything that could make it harder for you to acquire the coverage and benefits you are entitled to. A well-meaning friend could inadvertently post something that would tip off someone looking at your claim. Google Yourself One trick you can use to find anything that may make your disability claim more difficult is typing your name into a search engine and seeking what comes up. You might be surprised. If anything troubling for your claim does come up, it is better if our lawyers know about it so we can address it. Talk to Our New Jersey Disability Lawyers About Your Claim Young, Marr, Mallis & Associates’ Passaic, NJ disability lawyers can answer any questions and address any concerns you have about your claim when you contact us at (609) 557-3081.

Law Review: Bruckner, Matthew A. and Charron-Chenier, Raphael and Grooms, Jevay- , Bankruptcy in Black and White: The Effect of Race and Bankruptcy Code Exemptions on Wealth (December 8, 2023) Ed Boltz Fri, 02/23/2024 - 19:07 Abstract:   Bankruptcy law in the United States is race-neutral on its face but, in practice, race matters in bankruptcy outcomes. Our original research provides an empirical look at how the facially neutral laws that allow debtors to retain assets in bankruptcy cases result in disparate outcomes for Black and white debtors. Racial differences in asset retention in bankruptcy cases play a role in perpetuating wealth inequality between Black and white debtors. Existing bankruptcy data lacks individual-level characteristics such as race, which inhibits researchers’ ability to adequately assess biases or unintended consequences of laws and policies on subsets of the population. Thus, we construct a novel data set using bankruptcy data from Washington D.C. in 2011 and imputing race. The data demonstrates that facially race-neutral bankruptcy laws contribute to racially disparate outcomes by allowing white debtors to keep larger amounts of both personal and real property. First, exemption laws allow every bankruptcy filer to retain some personal property even if they do not repay their creditors in full. At the median, white filers in the District of Columbia claimed $10,150 in exemptions, relative to $8,359 for Black filers. In other words, the median white filer kept roughly $1,800 more of their property than Black filers, despite reporting similar overall personal property values. Second, exemption laws allow every bankruptcy filer to retain some (or all) equity in their home. Unlike personal property, where Black and white debtors enter bankruptcy with about the same amount of property, white debtors enter bankruptcy with more home equity than Black debtors ($585,000 compared with $251,600 at the median). Unsurprisingly, then, white debtors also leave bankruptcy with more home equity (e.g., the median Black filer retains roughly 80% less in home equity than white filers). Although bankruptcy laws do not inflate the value of white filers’ personal or real property values relative to Black debtors, our exemption rules contribute to white debtors leaving bankruptcy with greater wealth than Black debtors. By protecting certain assets like home equity, which are unevenly distributed in our sample across Black and white debtors, bankruptcy law appears to play a role in perpetuating wealth inequality. Even where assets are more evenly distributed, as personal property was in our sample, bankruptcy law leaves Black debtors with a less robust “fresh start” than white debtors. Commentary: Presumably because this is a descriptive empirical study, rather than a prescriptive policy argument,  it is nonetheless unfortunate that there are no recommendations for changes that increase the equity of bankruptcy exemptions.  It would seem, including from the date in this article, that any increase in exemptions,  while beneficial to Black debtors, might still be of greater benefit to white debtors.  Whether the detriment of any widening of the wealth gap between the cohorts of white and Black debtors exiting bankruptcy would exceed the benefits to individual debtors in protecting a greater amount of assets is perhaps an Original Position question for political philosophers. Not practicing in Washington, D.C.,  I might be wildly speculating,  but elsewhere case law allows for the exemption of any interest in real estate,  including a  leasehold (think back to the bundle of sticks from Property Law 101).  This could allow an unlimited exemption in security deposits and prepaid rent  as those are an  "interest in real property"  under D.C. Code § 15–501,  providing greater equity in the liberal application of exemptions in favor of debtors,  with particular benefit for Black debtors,  who have disproportionate rates of renting rather than home ownership.  I am grateful that  the authors of this paper  have been more accurate in comparing Chapter 7 and Chapter 13 by noting that "[a]s a practical matter, however, there may be little difference in creditor recovery rates if a chapter 13 debtor lacks any 'disposable income' or a chapter 7 debtor lacks any non-exempt property."  This marks a hopeful improvement in the academic literature that far too often previously routinely asserted that Chapter 13 debtors are required to pay more to unsecured creditors.  In fact,  both because of the Chapter 13 debtor is actually allowed to pay less to creditors,  both based on Mean Test deductions for retirement contributions and because the Best Interests of the Creditors analysis  allows Chapter 13 debtors to retain the hypothetical costs of liquidation (basically a secret exemption for the Trustee's Fees and Costs)).     Next maybe academics might start to  revisit with a more nuanced view the success rate of Chapter 13, which may not be nearly as dour as the recurrent  but perhaps dated statement that "[o]nly about one-third of chapter 13 cases end with the debtor receiving a discharge of their remaining debts." To read a copy of the transcript, please see: Blog comments Attachment Document black_and_white_the_effect_of_race_and_bankruptcy_code_exemptions_on_wealth_compressed_1.pdf (713.67 KB) Category Law Reviews & Studies Ed Boltz: Bankruptcy Attorney News

Bankr. M.D.N.C.: In re Adams- Sale of Residence is Substantial and Unanticipated Change in Circumstances resulting in new liquidation analysis Ed Boltz Fri, 02/23/2024 - 07:20 Summary: Adams initially filed  a pro se Chapter 7 bankruptcy disclosing his residence  on Schedule A of his petition,  stating that its value was "Unknown", but, after the Chapter 7 Trustee took preliminary steps to sell the property,  Adams hire an attorney, filed an amendment asserting a value of $260,000 and converted the case to Chapter 13.  The Chapter 13 plan was confirmed with a requirement of $79,705.55 dividend under the Best Interests of the Creditors test.  Six months after confirmation,  Adams sought to sell his residence for $289,000,  with the Trustee then seeking,  through a subsequent Motion to Modify,  to increase the liquidation requirement to $109,043. The bankruptcy court, relying on In re Murphy, 474 F.3d 143 (4th Cir. 2007),  rejected Adams' argument that the original $79,705  requirement was res judicata,  finding that the sale constituted a "substantial change" in Adam's financial circumstances that was "unanticipated" at confirmation. As a result under 11 U.S.C. §1329(a), the modified or "amended"  plan  required a new analysis of the Best Interests of Creditors as of the “as of the effective date of [that] plan.” The bankruptcy court did, nonetheless,  allow Adams to retain not only his homestead exemption,  but also “any amount of proceeds attributable to principal reduction resulting from Debtor’s post-petition payments and any portion of the liquidation value previously paid to creditors in this case.” Commentary: As again, this case points to the insufficiency of the homestead exemption in North Carolina,  as the $35,000 that Adams was allowed to retain is certainly insufficient for a down payment on nearly any home.  Hopefully exemption reform is something that the North Carolina Bar Association Bankruptcy Section will take up soon. Additionally, with  a mortgage owed,  per the Proof of Claim,  of $135,255.64,  it would seem that at the time of confirmation,  the  Best Interests of the Creditors analysis  may not have taken into account the hypothetical  costs of the Chapter 7 Trustee,  which would have been $6,437,  reducing the required dividend to as little as approximately $57,308.00. Similarly, even once the property was sold,  the Best Interests of the Creditors test at 11 U.S.C. § 1325(a)(4) still only requires that unsecured claims receive "not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7."  This would still reduce the amount paid to unsecured creditors by the hypothetical Chapter 7 Trustee's commission of approximately $7,742.  As that amount would not be paid to unsecured creditors in a Chapter 7,  it should instead have been retained by Adams.  The point of the Best Interest of Creditors test is not to ensure that the debtor feels the same pain as in Chapter 7,  but that creditors get the same benefit. This is another of the advantages that Congress included to encourage Chapter 13 over Chapter 7,  but one that courts,  overzealous Chapter 13 Trustees and even debtor's attorneys,  when too fixated on other failed arguments,  do not always seem to recognize. This case, and others on the same issue,  were discussed extensively during the ABI presentation Post-Petition Appreciation: When Things Go Up, Who Gets What? For a copy of the opinion, please see: Blog comments Attachment Document in_re_adams.pdf (731.98 KB) Category North Carolina Bankruptcy Cases Middle District

Law Review, Hampson, Christopher- Harsh Creditor Remedies And The Role Of The Redeemer Ed Boltz Fri, 02/23/2024 - 05:21 Abstract: The concept of the judgment-proof or collection-proof debtor is fundamental to our understanding of civil law and of what distinguishes it from criminal law.  But when civil creditors can threaten unduly harsh or cruel debt collection measures (whether legally or not), they extend their reach into the pockets of those whom this Article calls “redeemers,” third parties with a familial or quasi-familial relationship to civil debtors who have reason to pay on their behalf.  This Article examines four such measures—imprisonment, homelessness, destitution, and deportation—remedies that sound like they come from another time and place, but which are threatened by some creditors in the United States today. Such “remedies” are problematic because (among other reasons) they undermine a core pillar of civil law:  that liability—absent a guarantee—is limited to the defendant.  Because harsh creditor remedies can affect third‑party redeemers, they also provide a classic example of an externality that justifies nonparentalistic intervention.  We should think of this field not as “the law of debtors and creditors,” but as “the law of debtors, creditors, and redeemers.” The role that redeemers play in debt collection law is one of many instances in which legal institutions display a myopic view of communities:  redeemers too often stand outside the field of vision of courts and legislatures.  Even so, this theory provides a powerful tool for explaining and reinforcing legal rules ranging from the law of unconscionability to exemption statutes to consumer protection.  This Article also recommends several measures to cabin this “spillover” effect, including an argument that imprisonment for civil debt violates not only state bans on debtors’ prisons, but also the federal Due Process Clause (even after Dobbs). Commentary: With all of the discussion and case law  regarding third-party releases for basically despicable people like the Sacklers in the Purdue Pharma bankruptcy,  rarely  do any of the judges or commentators on those cases contrast the relief sought  there on the cheap,  both in terms of dollars,  scrutiny or shame,  with how in consumer bankruptcy cases  the co-debtor stay  of 11 U.S.C. § 1301  is often unnecessarily co-joined with 11 U.S.C. § 1322(b)(1)  to condition that protection on payment of the claim in full and with contract interest.   Further compounding this harsh treatment of redeemers in consumer bankruptcies,  overzealous Trustees  often seek to apply the Means Test to force a debtor's spouse and other household members to provide redemption funds on debts for which they are not liable. (Whether directly or through the overwrought "sugar daddy"  argument  that the debtor should not be allowed to underwrite  the expenses of the other household members, in effect forcing them to be redeemers.) To read a copy of the transcript, please see: Blog comments Attachment Document harsh_creditor_remedies_and_the_role_of_the_redeemer.pdf (559.25 KB) Category Law Reviews & Studies Ed Boltz: Bankruptcy Attorney News

An essential backbone of the global economy, more and more trucking companies are going out of business. Challenges such as fuel price changes, regulations, labor shortages, and economic downturns can harm the industry’s stability and financial health.  Bankruptcy law can help trucking companies survive in these difficult times. Speak with a trusted bankruptcy attorney today. Get a Free Confidential Consultation Troubles Facing the Trucking Industry Fluctuating Fuel Prices Fuel costs are a big expense for trucking companies. Volatility in oil prices can greatly impact their bottom line. Expensive fuel can make it difficult for companies, especially small ones, to make money and stay afloat. Stringent Regulations Trucking companies must follow many complex state and federal regulations, from vehicle pollution to how long drivers can work. Compliance with these regulations can be costly and time-consuming.  For example, the Electronic Logging Devices (ELD) mandate, which requires drivers to electronically record their driving hours, has imposed additional financial burdens on many operators. Labor Shortages The industry is currently facing a significant driver shortage. This is magnified by an aging workforce and the challenge of attracting younger drivers. This shortage can lead to increased wages and benefits costs, further straining the financial resources of trucking companies. Economic Downturns Recessions can lead to decreased demand for freight services, as businesses reduce production and consumers cut back on spending. Such downturns can be devastating for trucking companies, particularly those heavily reliant on industries sensitive to economic cycles, like manufacturing and retail. Rising Insurance Costs Trucking companies naturally face high insurance premiums because of the inherent risks associated with transporting goods over long distances. These costs have been steadily increasing, partly due to the rise in litigation and settlement amounts against trucking companies involved in accidents. Maintenance and Equipment Costs The cost of maintaining and updating trucks and equipment can be substantial. As technology advances, older vehicles may become obsolete or require expensive upgrades to remain compliant with regulatory standards. Why You Should Consider Declaring Bankruptcy Many people often view bankruptcy as a last resort, but it can provide a lifeline for trucking companies facing hard times. By filing for bankruptcy, a company can restructure its debts, reduce its obligations, and emerge as a more competitive and financially stable entity. Here are 5 benefits of filing for bankruptcy for your trucking company. Automatic Stay Upon filing for bankruptcy, an automatic stay is immediately enacted. This halts all collection activities, including lawsuits, repossessions, and foreclosures. This reprieve can provide trucking companies with the breathing room needed to reorganize without the constant pressure from creditors. Debt Restructuring Bankruptcy allows for the restructuring of debts. For example, under Chapter 11, a trucking company can propose a reorganization plan for renegotiating terms with creditors, downsizing operations to reduce costs, or liquidating assets to pay off debts. This process enables the company to realign its financial obligations with its current capacity to pay. Discharge of Unsecured Debts Bankruptcy can lead to the discharge of certain unsecured debts, such as credit card debts, unsecured business loans, and some judgments. Eliminating these obligations can significantly reduce the overall debt burden, freeing up resources for essential expenses like fuel, maintenance, and payroll. Contract and Lease Modifications Chapter 11 bankruptcy offers the opportunity to reject or modify existing contracts and leases that are no longer favorable or sustainable. This can be particularly useful for renegotiating lease terms on vehicles or equipment, potentially leading to lower monthly payments. Fresh Start Successfully emerging from bankruptcy can provide a trucking company with a fresh start. With a more manageable debt load and streamlined operation, the company can focus on profitability and long-term sustainability without the weight of past financial missteps. Navigating Bankruptcy in the Trucking Industry The decision to file for bankruptcy should not be taken lightly. It involves careful consideration of the company’s financial situation, future prospects, and the potential impact on employees, customers, and business relationships.  If your trucking company is at risk of going out of business, Lakelaw can help. With over 50 years of experience in bankruptcy law, David P. Leibowitz is nationally recognized for excellence by Super Lawyers, Martindale-Hubbell, Lawdragon, and more. David has also represented numerous trucking companies and assisted them with cost reduction, reorganization, and asset liquidation. Get a Free Confidential Consultation The post Keep on Trucking: How to Steer Your Trucking Company Out of Bankruptcy appeared first on Lakelaw.

Bankr. M.D.N.C.: In re Miller- Fraud and Similar Claims Related to Denial of Mortgage Modifications Ed Boltz Wed, 02/21/2024 - 02:00 Summary: Yitzhak Miller  brought claims against related to the mortgage servicers related to  three rental properties: constructive fraud; fraudulent inducement;  negligent  misrepresentation;  breach of duty of good faith and fair dealing;  abuse of process; breach of settlement agreement  civil conspiracy;  UDTPA ;  racketeering in violation of 18 U.S.C. § 1961 et seq. The bankruptcy court dismissed the constructive fraud claims  finding,  in reliance on  Dallaire v. Bank of America that the defendant mortgage servicers did not have any fiduciary duty to Miller. As to fraudulent inducement,  Miller was required, with sufficient detail to satisfy Rule 9(b), to allege:  a false representation or concealment of a material fact,  that was reasonably calculated to deceive,  that was made with the intent to deceive,  which does in fact deceive,  resulting in damage to the injured party.”  Packrite, LLC v. Graphic Packaging Int'l, Inc., No. 1:17CV1019, 2019 U.S. Dist. LEXIS 113428, at *7-8 (M.D.N.C. July 9, 2019).  Miller's generalized allegations that the loans implied they were for the borrower's principal residence and made in compliance with Fannie Mae guidelines  failed as insufficient.   Similarly the claims of negligent representation that the loans were "governed by regulations and/or trade practices intended to prevent unjustified foreclosures"  failed due to insufficient support.   The claim for breach of duty of good faith and fair dealing failed because there was no "special relationship between the parties" beyond a contractual one.   Abuse of process   "is the misapplication of civil or criminal process to accomplish some purpose not warranted or commanded by the process" and requires a showing of the existence of an ulterior motive, and  an act  in the use of the process not proper in the regular prosecution of the proceeding. The bankruptcy court rejected the allegation that the foreclosures against the properties were sought for the improper purpose of "cheating [Miller] of the equity". Miller asserted breach of settlement claim   based on an agreement  to "stand down on all foreclosure efforts"  while he sought to sell one of the three properties,  with the anticipation of using the expected proceeds to bring the other to mortgages current.  Shortly after obtaining a contract to sell that first property,  the foreclosures were nonetheless immediately recommenced. Unfortunately for Miller,  the bankruptcy found there was no settlement contract,  as the mortgage servicer's North Carolina counsel had no authority regarding the property in Lousiana,  especially as any such oral settlement would not be enforceable as it lacked any specificity to constitute a contract. Because all of Miller's tort claims were dismissed, the civil conspiracy and UDTPA claims do not rest on any underlying tortious conduct and failed as well.   The racketeering claim failed as such requires the showing of an "enterprise" with  least four  features:  a purpose,  relationships among those associated with the enterprise, longevity sufficient to permit  these associates to pursue the enterprise's purpose; and it  affected interstate commerce. Commentary: With the competing allegations that Miller submitted  multiple Requests for Mortgage Assistance (RM As)  but with Specialized asserting that those had not been received,  the underlying bankruptcy would certainly seem to have been an instance that could have benefited from Miller seeking to participate in the bankruptcy court's LMM program.  While strictly speaking that is limited to Chapter 13 debtors and their principal residence,  the underlying bases for that program could similarly allow this in a Chapter 11 case for rental properties. Whether Miller truly wanted  mortgage modifications or instead to use litigation to force negotiations for more reasonable terms is unclear. For a copy of the opinion, please see:   Blog comments Attachment Document in_re_miller.pdf (731.5 KB) Category North Carolina Bankruptcy Cases Middle District

I’ve long campaigned for compensation of bankruptcy practitioners that recognizes the practitioner’s skill set and the complexities of this practice. Without real-world compensation, bankruptcy can’t compete for legal talent. Alongside that campaign, I’ve expressed my concern about what Bill Rochelle calls the overlegalization of consumer bankruptcy. I see that in the increasing, and needless in […] The post Chapter 13 NoLook Fees: Fair vs. Affordable appeared first on Bankruptcy Mastery.

Bankr. M.D.N.C.: In re Myatt- Equitable Distribution Award for 401k effective without QDRO & still Excluded from Estate Ed Boltz Mon, 02/19/2024 - 17:23 Summary: The bankruptcy court overruled the chapter 7 trustee's objection to the debtor Catherine Myatt's claimed exemption in her interest in her former husband's 401(k) retirement account. The court found that the consent order entered in the Myatts' state court divorce proceeding, which incorporated their separation agreement, created Ms. Myatt's ownership interest in $22,677.31 of Mr. Myatt's 401(k) account.  The order constituted a final resolution of the Myatts' equitable distribution claims and fixed their rights in marital property.  Although a qualified domestic relations order (QDRO) was contemplated to implement the transfer, the absence of a QDRO did not impact Ms. Myatt's vested interest established in the consent order. The court held that Ms. Myatt's interest in the 401(k) account funds was excluded from her bankruptcy estate under 11 U.S.C. § 541(c)(2).  As an alternate payee of an ERISA-qualified retirement plan, Ms. Myatt could exclude her interest from the estate like the plan participant.  This exclusion applied notwithstanding the lack of a QDRO to effectuate the transfer.  The court found the result supported the public policy of protecting retirement assets during the period between an equitable distribution order and execution of a QDRO. Commentary: If anyone is a member of the NC Bar Association Family Law section, please share this case and summary there. For a copy of the opinion, please see:   Blog comments Attachment Document myatt.pdf (205.62 KB) Category North Carolina Bankruptcy Cases Middle District

What Are the Revised Department of Justice Guidelines for Discharging Student Loan Debt? Law Office Blogger Mon, 02/19/2024 - 06:43 As of February 14, 2024, the revised Department of Justice (DOJ) guidelines for discharging student loan debt are still under evaluation after their initial implementation in November 2022. Here's what we know: Current guidelines (November 2022): Aim to make the discharge process fairer and more accessible. Encourage consistent treatment of student loan discharge across cases. Reduce the burden on borrowers trying to get discharge. Help identify cases where discharge is appropriate. Key components: Standardized process: Provides clear expectations for discharge proceedings. Stipulation and recommendation: DOJ attorneys can now stipulate to facts demonstrating "undue hardship" and recommend discharge if three conditions are met: Present inability to repay: Borrower cannot maintain basic living standards with required repayments. Persistent financial hardship: Circumstances suggest this will continue long-term. Good faith efforts: Borrower has sincerely tried to repay in the past. Early indications: Initial reports suggest the new process is increasing the number of discharges. Evaluation and potential updates: DOJ and Department of Education are currently assessing the first year of implementation. Based on feedback, future updates might further streamline the process or refine criteria for discharge. Blog comments