How Breadcrumbing Puts You At A Disadvantage In Divorce Have you ever felt like you were fed up with a relationship, just for that person to give you a shred of attention that’s enough to reel you back in? If so, you’ve probably experienced a phenomenon known as “breadcrumbing.” While it might not be as dangerous as other forms of abuse and psychological manipulation, it can still make the recipient feel a variety of negative emotions. If someone is susceptible to breadcrumbing, they may be put at a steep disadvantage should they ever get divorced from their spouse or have a custody dispute with their child’s other parent.  Read on to learn more about breadcrumbing to determine if this tactic is being used against you. To review it with an experienced lawyer in the context of Arizona family law, contact our firm for your free consultation. Our dedicated divorce and custody attorneys know just how sensitive these matters can be. For family law lawyers, it can be just as important to be an understanding and compassionate listener as it is to bring a pit-bull mentality to the courtroom. To schedule your free consultation with a member of My AZ Lawyers, call 480-470-1504.  What Is Breadcrumbing? Breadcrumbing is “a behavior in which one person sends intermittent and often vague messages to keep another person interested or engaged, without any intention of fully committing or entering into a relationship.” While the term is used most often when discussing dating, it can apply to a variety of romantic and non-romantic relationships. Think of the popular boy in school who may occasionally be nice to the nerd so he’ll let him copy his homework, or the boss who always hints at a promotion that never comes to their employee, if they only work a little harder. A romantic relationship can also start off healthy, and eventually devolve to where one or both partners utilize breadcrumbing. After a few kids, a wife may begin to only show affection when she wants her husband to complete a task, or a husband may only plan a date or buy flowers when he can tell he’s in trouble. Breadcrumbing affects the recipient negatively in several ways. It can cause feelings of inadequacy, jealousy, anger, sadness, etc. It might be triggering for someone who has experienced a traumatic childhood or abusive relationship. Breadcrumbing can also prevent the recipient from moving on and finding someone who is actually interested in them.  Signs You Are Being Breadcrumbed If you suspect that you or someone you love is being breadcrumbed in a relationship, there are some tell-tale signs that this method of manipulation is being utilized. Some of the warning flags for breadcrumbing include: Communication will only ever be on the other person’s terms. Deep down, you probably already know that this person can’t be relied on in an emergency, or even just to comfort you on a bad day. They might not reply when you’re the first to reach out, or even respond after they have started a conversation. Most of their communication may be at night or via text, or primarily focus on physical intimacy.  This person might outwardly tell you they are not ready to be in a committed relationship with you. This could be because of work, family obligations, or simple emotional unavailability. But you will probably still find them on the dating apps, “looking for a long-term relationship.”  If you do ever get this person to agree to plans, they may be late or flake entirely. Any plans for a rain-check may be vague or non-committal. You won’t catch this person agreeing to be your wedding date in six months or possibly even your dinner date next week.  They might only use the lowest-effort forms of communication possible. While double-tapping a post to like it or sending a one-word text on an app meant for sending hidden messages only takes a second to complete, it can make the breadcrumbing target feel like they are making progress in their relationship.  This person might avoid any deeper-level discussions of feelings. Conversations are often kept at the surface level, and a breadcrumber may also put extra effort into keeping the conversation focused on the other person.  How Breadcrumbing Can Play Out In Divorce Not everyone who gets divorced wants to. Arizona is a no-fault divorce state, and only one spouse needs to decide they want a divorce for it to eventually be granted, unless the spouses have entered a covenant marriage. Arizona is a community property state, so all assets and debts acquired during the marriage will be split evenly between them in divorce, unless they sign a consent decree agreeing to some other dissolution of their marital estate. Getting a spouse to agree to property division outside of community property laws could be where breadcrumbing comes into play.  A spouse who is used to manipulating their partner to get their way can be trusted to do the same during divorce. During the marriage, they may have utilized breadcrumbing to make sure the family always went to the vacation destination of their choosing, lived in a home suiting their needs, etc. In a marriage that is already official, this may look more like withholding affection and attention in order to give their spouse a sense of desperation to give them their way. In a marriage that is ending, it may arise as promises to cooperate on certain issues if the other spouse makes huge sacrifices in other areas. For example, one spouse might hint at getting back together with their spouse if they agree to come to their divorce attorney’s office for a negotiation, or promise to be fair during the child custody portion of the divorce if their spouse agrees to surrender the family home.  Anyone who is aware that they are susceptible to manipulation needs to be on guard throughout the entire divorce process. A manipulative spouse likely won’t have a hard time finding an equally manipulative attorney in Arizona or any other state in the country. Hiring your own attorney who isn’t afraid to back down from a challenge and try innovative strategies to deal with difficult opposition will make the divorce process less challenging. If you’re looking for an Arizona divorce lawyer who knows how to deal with toxic and manipulative exes, call 480-470-1504 to schedule your free consultation with My AZ Lawyers today.  Don’t Want A Breadcrumbing Dynamic To Extend Into Divorce? Contact My AZ Lawyers For Your Free Consultation.  There is nothing wrong with being someone who wants to make their partner happy and tries their best to see the positive in a situation. But a manipulative spouse may turn that against you and use breadcrumbing as a strategy to achieve an unfair divorce resolution. At the offices of My AZ Lawyers, we have seen countless spouses assume they can steamroll their exes in divorce because of how things went during the marriage. In these situations, it’s best to retain an attorney who is confident in their knowledge of the Arizona law office and their negotiation skills, even with ruthless opposing counsel. Let our legal team fight to make sure your divorce is fair and as peaceful for your family as possible. Get started today with your free consultation by phone- call 480-470-1504. MY AZ LAWYERS Email: [email protected] Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 Glendale Location 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: 602-509-0955 Tucson Location 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: 520-441-1450 Avondale Location 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: 623-469-6603 The post How Breadcrumbing Puts You At A Disadvantage In Divorce appeared first on My AZ Lawyers.

How Breadcrumbing Puts You At A Disadvantage In Divorce Have you ever felt like you were fed up with a relationship, just for that person to give you a shred of attention that’s enough to reel you back in? If so, you’ve probably experienced a phenomenon known as “breadcrumbing.” While it might not be as dangerous as other forms of abuse and psychological manipulation, it can still make the recipient feel a variety of negative emotions. If someone is susceptible to breadcrumbing, they may be put at a steep disadvantage should they ever get divorced from their spouse or have a custody dispute with their child’s other parent.  Read on to learn more about breadcrumbing to determine if this tactic is being used against you. To review it with an experienced lawyer in the context of Arizona family law, contact our firm for your free consultation. Our dedicated divorce and custody attorneys know just how sensitive these matters can be. For family law lawyers, it can be just as important to be an understanding and compassionate listener as it is to bring a pit-bull mentality to the courtroom. To schedule your free consultation with a member of My AZ Lawyers, call 480-470-1504.  What Is Breadcrumbing? Breadcrumbing is “a behavior in which one person sends intermittent and often vague messages to keep another person interested or engaged, without any intention of fully committing or entering into a relationship.” While the term is used most often when discussing dating, it can apply to a variety of romantic and non-romantic relationships. Think of the popular boy in school who may occasionally be nice to the nerd so he’ll let him copy his homework, or the boss who always hints at a promotion that never comes to their employee, if they only work a little harder. A romantic relationship can also start off healthy, and eventually devolve to where one or both partners utilize breadcrumbing. After a few kids, a wife may begin to only show affection when she wants her husband to complete a task, or a husband may only plan a date or buy flowers when he can tell he’s in trouble. Breadcrumbing affects the recipient negatively in several ways. It can cause feelings of inadequacy, jealousy, anger, sadness, etc. It might be triggering for someone who has experienced a traumatic childhood or abusive relationship. Breadcrumbing can also prevent the recipient from moving on and finding someone who is actually interested in them.  Signs You Are Being Breadcrumbed If you suspect that you or someone you love is being breadcrumbed in a relationship, there are some tell-tale signs that this method of manipulation is being utilized. Some of the warning flags for breadcrumbing include: Communication will only ever be on the other person’s terms. Deep down, you probably already know that this person can’t be relied on in an emergency, or even just to comfort you on a bad day. They might not reply when you’re the first to reach out, or even respond after they have started a conversation. Most of their communication may be at night or via text, or primarily focus on physical intimacy.  This person might outwardly tell you they are not ready to be in a committed relationship with you. This could be because of work, family obligations, or simple emotional unavailability. But you will probably still find them on the dating apps, “looking for a long-term relationship.”  If you do ever get this person to agree to plans, they may be late or flake entirely. Any plans for a rain-check may be vague or non-committal. You won’t catch this person agreeing to be your wedding date in six months or possibly even your dinner date next week.  They might only use the lowest-effort forms of communication possible. While double-tapping a post to like it or sending a one-word text on an app meant for sending hidden messages only takes a second to complete, it can make the breadcrumbing target feel like they are making progress in their relationship.  This person might avoid any deeper-level discussions of feelings. Conversations are often kept at the surface level, and a breadcrumber may also put extra effort into keeping the conversation focused on the other person.  How Breadcrumbing Can Play Out In Divorce Not everyone who gets divorced wants to. Arizona is a no-fault divorce state, and only one spouse needs to decide they want a divorce for it to eventually be granted, unless the spouses have entered a covenant marriage. Arizona is a community property state, so all assets and debts acquired during the marriage will be split evenly between them in divorce, unless they sign a consent decree agreeing to some other dissolution of their marital estate. Getting a spouse to agree to property division outside of community property laws could be where breadcrumbing comes into play.  A spouse who is used to manipulating their partner to get their way can be trusted to do the same during divorce. During the marriage, they may have utilized breadcrumbing to make sure the family always went to the vacation destination of their choosing, lived in a home suiting their needs, etc. In a marriage that is already official, this may look more like withholding affection and attention in order to give their spouse a sense of desperation to give them their way. In a marriage that is ending, it may arise as promises to cooperate on certain issues if the other spouse makes huge sacrifices in other areas. For example, one spouse might hint at getting back together with their spouse if they agree to come to their divorce attorney’s office for a negotiation, or promise to be fair during the child custody portion of the divorce if their spouse agrees to surrender the family home.  Anyone who is aware that they are susceptible to manipulation needs to be on guard throughout the entire divorce process. A manipulative spouse likely won’t have a hard time finding an equally manipulative attorney in Arizona or any other state in the country. Hiring your own attorney who isn’t afraid to back down from a challenge and try innovative strategies to deal with difficult opposition will make the divorce process less challenging. If you’re looking for an Arizona divorce lawyer who knows how to deal with toxic and manipulative exes, call 480-470-1504 to schedule your free consultation with My AZ Lawyers today.  Don’t Want A Breadcrumbing Dynamic To Extend Into Divorce? Contact My AZ Lawyers For Your Free Consultation.  There is nothing wrong with being someone who wants to make their partner happy and tries their best to see the positive in a situation. But a manipulative spouse may turn that against you and use breadcrumbing as a strategy to achieve an unfair divorce resolution. At the offices of My AZ Lawyers, we have seen countless spouses assume they can steamroll their exes in divorce because of how things went during the marriage. In these situations, it’s best to retain an attorney who is confident in their knowledge of the Arizona law office and their negotiation skills, even with ruthless opposing counsel. Let our legal team fight to make sure your divorce is fair and as peaceful for your family as possible. Get started today with your free consultation by phone- call 480-470-1504. MY AZ LAWYERS Email: [email protected] Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 Glendale Location 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: 602-509-0955 Tucson Location 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: 520-441-1450 Avondale Location 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: 623-469-6603 The post How Breadcrumbing Puts You At A Disadvantage In Divorce appeared first on My AZ Lawyers.

N.C. Business Ct.: Pro-Tops v. Maksimenko_- Service of Process Short Cut is Improper Ed Boltz Wed, 04/16/2025 - 16:31 Summary: Pro-Tops sought to effectuate service on Maksimenko through a private process server on six different occasions without success. The personal process server contacted Maksimenko, who denied avoiding service. On December 19, 2024, the private process server met with Maksimenko at an agreed location,  providing copies of the complaint and summons. Maksimenko moved to dismiss under Rule 12(b)(5) for improper service of process. The Business Court granted Maksimenko’s motion to dismiss, noting that Plaintiff’s affidavit of service did not indicate service by the sheriff had first been attempted or that the sheriff was otherwise unable to serve the summons or complaint. Citing precedent, the Court noted that “use of a private process server is limited by statute to scenarios where the sheriff is unable to fulfill the duties of a process server.” Finding that service was not properly effectuated on Maksimenko, Plaintiff’s case was dismissed. In a decision that reinforces the rigid contours of North Carolina’s civil procedure—and the potential pitfalls for creditors moving too quickly—the Business Court dismissed a suit without prejudice against an individual defendant due to improper service under Rule 12(b)(5), despite undisputed actual notice of the action. While Pro-Tops, Inc. v. Maksimenko arises from a commercial trade secrets dispute rather than a consumer or bankruptcy case, the ruling has important implications for both areas—particularly as consumers continue to face lawsuits from creditors, landlords, and collectors increasingly represented by large firms seeking swift judgment in North Carolina courts. Commentary: While not a consumer case per se, Pro-Tops v. Maksimenko serves as a reminder that North Carolina courts—particularly its Business Court—demand strict adherence to service of process rules. For consumer advocates and bankruptcy attorneys, the case offers another procedural arrow in the quiver to defend against improperly served judgments, which, if timely challenged, may be dismissed or voided altogether. With proper attribution,  please share this post.    To read a copy of the transcript, please see: Blog comments Attachment Document pro-tops_v._maksimenko.pdf (177.2 KB) Category NC Business Court

N.C. Ct. of Appeals: Midland Credit Management v. Mitchell- Procedural Errors Lead to Dismissal of Pro Se Consumer Case Ed Boltz Tue, 04/15/2025 - 22:26 Summary: The North Carolina Court of Appeals dismissed the appeal of Derrick Mitchell in a case brought against him by Midland Credit Management, Inc. for an unpaid credit card debt. The trial court had granted summary judgment in favor of Midland, ordering Mitchell to pay $13,790.19 plus interest. Mitchell, representing himself, appealed the decision, arguing that the trial court erred in multiple ways, including failing to rule on his motion to dismiss, granting summary judgment, and striking his counterclaims. The Court of Appeals dismissed the appeal due to substantial violations of the North Carolina Rules of Appellate Procedure. The court found that Mitchell’s appeal was deficient in several ways, including failing to provide legal arguments, standards of review, or supporting legal authority for his claims. The court emphasized that appellate rules apply to all litigants, including those representing themselves, and that compliance is essential to maintaining the adversarial process. Because Mitchell’s violations impaired the court’s ability to conduct a meaningful review, the appeal was dismissed. Commentary: Midland v. Mitchell serves less as doctrinal development than a practical demonstration of the steep procedural terrain faced by consumer debtors. The decision, though unpublished, reinforces that the courthouse doors remain open only to those able to navigate increasingly complex procedural rules—rules that, for consumer debtors facing summary judgment on charged-off accounts, may prove as formidable as the debt itself.   Even with fee shifting provisions in consumer rights statutes,  it seems like consumers struggle to not only find lawyers  who will bring these sorts of claims and counterclaims,  but even to get a  consultation  with an attorney about what rights and defenses they might have. This case also reflects a broader trend: North Carolina’s courts continue to entertain lawsuits from debt buyers—often with scant original documentation—and grant summary judgments in the absence of a well-presented defense. While consumers can, in theory, raise powerful statutory and constitutional defenses, this decision exemplifies how such claims are easily extinguished if not procedurally packaged with precision.   With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document midland_credit_management_v_mitchell.pdf (116.34 KB) Category NC Court of Appeals

When you get disability, your earned income matters. Caregiver stipends and other benefits from the U.S. Department of Veterans Affairs (VA) aren’t earned income, so they don’t affect your disability eligibility. VA caregiver stipends aren’t paid to the disabled veteran, either, but to their primary caregiver. If you get VA disability benefits, you can also get Social Security Disability Insurance (SSDI). Your VA benefits won’t lower when you get SSDI, and vice versa. The Social Security Administration (SSA) does restrict earned income when on SSDI, like from a part-time job. For a free case assessment from our Pennsylvania disability lawyers, call Young, Marr, Mallis & Associates today at (215) 515-2954. Do VA Caregiver Stipends Affect Disability Eligibility in Pennsylvania? Veterans seeking stipends for caregivers and other support can apply through the Program of Comprehensive Assistance for Family Caregivers (PCAFC). If your application gets approved and your caregiver gets a stipend, what does that mean for your SSDI benefits? If you’re applying for SSDI and your caregiver gets a VA stipend, that will not affect your application. SSDI eligibility is based on having a qualifying disability and working enough years while paying Social Security tax. If you can’t work anymore, SSDI can replace some of your income. You have to stay under monthly earned income limits while you get SSDI, but a PCAFC caregiver stipend won’t affect that since it goes to your primary caregiver, not you. Even if that person is your spouse, any amounts they make, whether from their job or a caregiver stipend, won’t affect your disability eligibility when applying for or getting benefits. Does Getting VA Benefits Affect Disability Eligibility in Pennsylvania? You can get VA benefits if you suffer an injury or illness during military service. The eligibility criteria differ from that of SSDI, and you might even get both types of payments. VA monthly benefit amounts are based on assigned disability ratings. While your condition must be expected to end in death or last at least a year to get SSDI, those requirements don’t exist for VA disability benefits. If you get VA disability benefits, you can also apply for SSDI. These benefits do not affect one another’s amounts. VA benefits aren’t earned income, so they don’t count toward your monthly income limits while on SSDI, either. Getting VA benefits will affect your eligibility for Supplemental Security Income (SSI), however. This is a need-based program, so you can only get SSI if you have very limited resources and income. Monthly Income Limits for Pennsylvania Disability Recipients If you can engage in “substantial gainful activity” (SGA), it can affect your SSDI benefits. While VA benefits or a caregiver stipend aren’t considered substantial gainful activity, anything that results in earned income is. Blind SSDI recipients can earn up to $2,700 per month without losing their benefits, and non-blind recipients can earn up to $1,600 in 2025. Remember, your spouse’s earned income doesn’t count against you, as it’s not evidence of SGA on your part. Earning over the SGA limits means not getting your SSDI payment for that month. If you also get VA disability or your caregiver gets a stipend, those payments will stay unaffected, as they don’t have income limits. SSDI recipients should also stay mindful of trial work periods. These get automatically triggered when recipients earn over $1,160 in 2025. Trial work periods can test your ability to work. However, if left unchecked, they can also lead to loss of benefits. Our Philadelphia disability lawyers can work to reinstate SSDI benefits if an unintentional trial work period affects your payments. What Factors Affect Disability Eligibility in Pennsylvania When reviewing your SSDI application, the SSA will see if you have a qualifying condition and enough work credits. Qualifying Conditions The SSA’s Listing of Impairments provides a range of conditions that qualify for SSDI. Having cancers, mental health disorders, arthritis, and even needing heart transplants may get applicants approved. Even if the SSA doesn’t expressly mention your condition in its Listing of Impairments, we can use medical records to show it is close enough to qualify. Many injuries, illnesses, and conditions qualify, so ask our lawyers if yours does. The SSA may require periodic continuing disability reviews, even if your injury or condition is permanent. We can prepare you for these reviews by organizing updated medical records showing your continued eligibility. Earning Records Earning records are the second half of SSDI eligibility. The SSA uses two tests to assess earning records, the first being the recent work test. Your age dictates how many “work credits” you need in the years leading up to your disability. You can get four work credits per year, one for every $1,810 you earn in 2025. If you’re under 24, you must have earned six work credits in the three years preceding your disability to pass the recent work test. If you’re between 24 and 31, you can get SSDI if you’ve worked half the time between turning 21 and when you became disabled. For example, if you are 29, you must have worked for four years since turning 21 and have 16 work credits. If you’re 31 or older, you need at least 20 work credits earned in the 10 years preceding your disability. We can then put you through the duration of work test, which requires you to have worked a certain number of years based on your age when you became disabled. If you don’t have enough work credits yourself, you can qualify using your parent’s earning record if you are a “disabled adult child” (DAC). DA Cs must be over 18, have a disability that began before age 22, and have a parent with a qualifying earning record. Call Our Pennsylvania Lawyers About Your Disability Application For a free case review from our Pottstown, PA disability lawyers, call Young, Marr, Mallis & Associates at (215) 515-2954.

Bankr. W.D.N.C.: In rea Peach- Sanctions for Dual Tracked Mortgage Fees Ed Boltz Thu, 04/10/2025 - 17:38 Summary: After Shellpoint began servicing the debtor's mortgage (paid through a conduit plan) in 2024 , it issued monthly mortgage statements listing unexplained fees (totaling $890) as “paid,” though no payments for those specific charges had been authorized or made by the debtor.   The debtor eventually brought a motion for sanctions against Shellpoint.  Shellpoint argued that even if prohibited from collecting the fees during or after a successfully completed Chapter 13 plan, that it could, nonetheless, collect those fees if the court dismissed the case. In granting the debtor's motion for sanctions and attorney’s fees against Shellpoint Mortgage Servicing,  the bankruptcy  court found that Shellpoint violated both Bankruptcy Rule 3002.1  and N.C.G.S.   § 45-91 by improperly assessing and attempting to collect unauthorized post-petition fees—including legal and property inspection fees—without notice, court approval, or compliance with required procedures, as the statements used misleading language such as "waiver" while simultaneously listing the charges as paid. Shellpoint failed to file the required notice of these post-petition fees under Federal Rule of Bankruptcy Procedure (FRBP) 3002.1 or seek court approval under Local Rules and  also failed to comply with North Carolina General Statute § 45-91, which requires clear disclosure and timely assessment of mortgage-related fees. The court found that  Shellpoint violated FRBP 3002.1, N.C.G.S. § 45-91, and the confirmed Chapter 13 plan by assessing fees without required notice or approval and  created confusion for the debtor,  undermining  the integrity of the bankruptcy process.  Accordingly,  pursuant to 11 U.S.C. § 105 and FRBP 3002.1(i), the court imposed sanctions and awarded attorney’s fees.  It further ordered that all post-petition fees assessed by Shellpoint (legal, inspection, and other charges) are disallowed and must be removed from the debtor’s mortgage account, enjoining it from assessing any future post-petition mortgage fees without compliance with applicable law and rules.  Lastly, the court  admonished Shellpoint that further non-compliance in future cases may result in significantly harsher sanctions. Commentary: Very nice job by Geoffrey Planer.  This case is a welcome extension of the case law supporting both FRBP 3002.1 and N.C.G.S. § 45-91  (remaining to be asserted is that  12 U.S.C. § 2605(k)(E)  and  12 C.F.R. § 1024.35(b)(5) also prohibit the "[i]Imposition of a fee or charge that the servicer lacks a reasonable basis to impose upon the borrower")   in requiring mortgage servicers to notify homeowners in Chapter 13 of any and all fees and charges that it asserts are due,  by preventing mortgage servicers from in essence keeping  two sets of books,  namely one if the debtor successfully complete Chapter 13 and another,  with enhanced and often secret fees,  that it will spring on the debtor in the event the case is dismissed.  (It is not necessarily unfair to suspect that mortgage servicers try to assert these higher fees against homeowners with successful plans,  just waiting a few months or until there is a transfer of servicing,  so that judicial and attorney attention has faded.) The admonition to Shellpoint is also helpful as it severely erodes any fairground of doubt that it might later assert that its errors,  failures and misdeeds are innocent or a result of confusing or conflicting laws.  Whether Shellpoint (and other mortgage servicers)  will find it necessary to proactively clean their accounts  of similarly confusing and erroneous mortgage statements  likely depends on how  broadly and systematically debtors attorneys and Chapter 13 Trustees  seek information regarding compliance.  Perhaps using the attached sample RFI... With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Category Western District

Bankr. W.D.N.C.: In rea Peach- Sanctions for Dual Tracked Mortgage Fees Ed Boltz Thu, 04/10/2025 - 17:38 Summary: After Shellpoint began servicing the debtor's mortgage (paid through a conduit plan) in 2024 , it issued monthly mortgage statements listing unexplained fees (totaling $890) as “paid,” though no payments for those specific charges had been authorized or made by the debtor.   The debtor eventually brought a motion for sanctions against Shellpoint.  Shellpoint argued that even if prohibited from collecting the fees during or after a successfully completed Chapter 13 plan, that it could, nonetheless, collect those fees if the court dismissed the case. In granting the debtor's motion for sanctions and attorney’s fees against Shellpoint Mortgage Servicing,  the bankruptcy  court found that Shellpoint violated both Bankruptcy Rule 3002.1  and N.C.G.S.   § 45-91 by improperly assessing and attempting to collect unauthorized post-petition fees—including legal and property inspection fees—without notice, court approval, or compliance with required procedures, as the statements used misleading language such as "waiver" while simultaneously listing the charges as paid. Shellpoint failed to file the required notice of these post-petition fees under Federal Rule of Bankruptcy Procedure (FRBP) 3002.1 or seek court approval under Local Rules and  also failed to comply with North Carolina General Statute § 45-91, which requires clear disclosure and timely assessment of mortgage-related fees. The court found that  Shellpoint violated FRBP 3002.1, N.C.G.S. § 45-91, and the confirmed Chapter 13 plan by assessing fees without required notice or approval and  created confusion for the debtor,  undermining  the integrity of the bankruptcy process.  Accordingly,  pursuant to 11 U.S.C. § 105 and FRBP 3002.1(i), the court imposed sanctions and awarded attorney’s fees.  It further ordered that all post-petition fees assessed by Shellpoint (legal, inspection, and other charges) are disallowed and must be removed from the debtor’s mortgage account, enjoining it from assessing any future post-petition mortgage fees without compliance with applicable law and rules.  Lastly, the court  admonished Shellpoint that further non-compliance in future cases may result in significantly harsher sanctions. Commentary: Very nice job by Geoffrey Planer.  This case is a welcome extension of the case law supporting both FRBP 3002.1 and N.C.G.S. § 45-91  (remaining to be asserted is that  12 U.S.C. § 2605(k)(E)  and  12 C.F.R. § 1024.35(b)(5) also prohibit the "[i]Imposition of a fee or charge that the servicer lacks a reasonable basis to impose upon the borrower")   in requiring mortgage servicers to notify homeowners in Chapter 13 of any and all fees and charges that it asserts are due,  by preventing mortgage servicers from in essence keeping  two sets of books,  namely one if the debtor successfully complete Chapter 13 and another,  with enhanced and often secret fees,  that it will spring on the debtor in the event the case is dismissed.  (It is not necessarily unfair to suspect that mortgage servicers try to assert these higher fees against homeowners with successful plans,  just waiting a few months or until there is a transfer of servicing,  so that judicial and attorney attention has faded.) The admonition to Shellpoint is also helpful as it severely erodes any fairground of doubt that it might later assert that its errors,  failures and misdeeds are innocent or a result of confusing or conflicting laws.  Whether Shellpoint (and other mortgage servicers)  will find it necessary to proactively clean their accounts  of similarly confusing and erroneous mortgage statements  likely depends on how  broadly and systematically debtors attorneys and Chapter 13 Trustees  seek information regarding compliance.  Perhaps using the attached sample RFI... With proper attribution,  please share this post.  To read a copy of the transcript, please see: To read a copy of the transcript, please see: Blog comments Attachment Document in_re_peach_1.pdf (494.7 KB) Document peach_rfi_1.docx (16.94 KB) Category Western District

Bankr. W.D.N.C.: In rea Peach- Sanctions for Dual Tracked Mortgage Fees Ed Boltz Thu, 04/10/2025 - 17:38 Summary: After Shellpoint began servicing the debtor's mortgage (paid through a conduit plan) in 2024 , it issued monthly mortgage statements listing unexplained fees (totaling $890) as “paid,” though no payments for those specific charges had been authorized or made by the debtor.   The debtor eventually brought a motion for sanctions against Shellpoint.  Shellpoint argued that even if prohibited from collecting the fees during or after a successfully completed Chapter 13 plan, that it could, nonetheless, collect those fees if the court dismissed the case. In granting the debtor's motion for sanctions and attorney’s fees against Shellpoint Mortgage Servicing,  the bankruptcy  court found that Shellpoint violated both Bankruptcy Rule 3002.1  and N.C.G.S.   § 45-91 by improperly assessing and attempting to collect unauthorized post-petition fees—including legal and property inspection fees—without notice, court approval, or compliance with required procedures, as the statements used misleading language such as "waiver" while simultaneously listing the charges as paid. Shellpoint failed to file the required notice of these post-petition fees under Federal Rule of Bankruptcy Procedure (FRBP) 3002.1 or seek court approval under Local Rules and  also failed to comply with North Carolina General Statute § 45-91, which requires clear disclosure and timely assessment of mortgage-related fees. The court found that  Shellpoint violated FRBP 3002.1, N.C.G.S. § 45-91, and the confirmed Chapter 13 plan by assessing fees without required notice or approval and  created confusion for the debtor,  undermining  the integrity of the bankruptcy process.  Accordingly,  pursuant to 11 U.S.C. § 105 and FRBP 3002.1(i), the court imposed sanctions and awarded attorney’s fees.  It further ordered that all post-petition fees assessed by Shellpoint (legal, inspection, and other charges) are disallowed and must be removed from the debtor’s mortgage account, enjoining it from assessing any future post-petition mortgage fees without compliance with applicable law and rules.  Lastly, the court  admonished Shellpoint that further non-compliance in future cases may result in significantly harsher sanctions. Commentary: Very nice job by Geoffrey Planer.  This case is a welcome extension of the case law supporting both FRBP 3002.1 and N.C.G.S. § 45-91  (remaining to be asserted is that  12 U.S.C. § 2605(k)(E)  and  12 C.F.R. § 1024.35(b)(5) also prohibit the "[i]Imposition of a fee or charge that the servicer lacks a reasonable basis to impose upon the borrower")   in requiring mortgage servicers to notify homeowners in Chapter 13 of any and all fees and charges that it asserts are due,  by preventing mortgage servicers from in essence keeping  two sets of books,  namely one if the debtor successfully complete Chapter 13 and another,  with enhanced and often secret fees,  that it will spring on the debtor in the event the case is dismissed.  (It is not necessarily unfair to suspect that mortgage servicers try to assert these higher fees against homeowners with successful plans,  just waiting a few months or until there is a transfer of servicing,  so that judicial and attorney attention has faded.) The admonition to Shellpoint is also helpful as it severely erodes any fairground of doubt that it might later assert that its errors,  failures and misdeeds are innocent or a result of confusing or conflicting laws.  Whether Shellpoint (and other mortgage servicers)  will find it necessary to proactively clean their accounts  of similarly confusing and erroneous mortgage statements  likely depends on how  broadly and systematically debtors attorneys and Chapter 13 Trustees  seek information regarding compliance.  Perhaps using the attached sample RFI... With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_peach.pdf (494.7 KB) Document peach_rfi.docx (16.94 KB) Category Western District

Bankr. E.D.N.C.: In re Hutsell- Life Insurance Proceeds not Exempt Ed Boltz Wed, 04/09/2025 - 15:35 Summary: The debtor, who tragically lost her husband just days after filing her Chapter 13 petition, sought to exempt life insurance proceeds payable to her as beneficiary under a personal policy. Her argument relied on § 1C-1601(a)(8), which protects "compensation for the death of a person upon whom the debtor was dependent for support." But the bankruptcy court, following In re Ragan, 64 B.R. 384 (Bankr. E.D.N.C. 1986), ruled that this “compensation” means wrongful death recoveries, not contractual insurance payouts, reasoning that: The term “compensation” in (a)(8) has historically been interpreted narrowly, aimed at tort recoveries rather than contractual entitlements. If the North Carolina legislature had intended to include life insurance proceeds under (a)(8), it would have said so — especially given its post-Ragan amendment of that very statute in 2005, which left the relevant language untouched.  Meanwhile, life insurance is already separately addressed in § 1C-1601(a)(6) (which mirrors the NC Constitution) and § 58-58-165 (for group policies).  In short: while North Carolina exemptions protect both Tort-based wrongful death proceeds from a personal injury lawsuit and  Group life insurance proceeds under § 58-58-165,   a debtor cannot  claim an exemption for life insurance proceeds from the death of a spouse — even if the debtor was financially dependent on that spouse.  Commentary: Judge McAfee acknowledged the emotional and financial hardship this outcome imposes and that it  exposes a glaring gap in North Carolina’s exemption framework. The state permits creditors of the beneficiary — in this case, a grieving widow — to reach life insurance proceeds that are otherwise protected from the insured’s creditors. As Judge McAfee noted, “it is difficult to articulate a rationale” for allowing tort proceeds but not insurance proceeds to be exempted in these tragic circumstances. It is time for the North Carolina General Assembly to revisit § 1C-1601(a)(8) and clarify or expand the scope of "compensation for death" to include life insurance proceeds when the debtor was financially dependent on the decedent.  The best action that members of the North Carolina Bar Association can take is to complete its survey regarding exemption updates.  There have already been comments regarding the need for the statute to be amended in response to Hutsell.  That survey can be completed at this link: Complete the survey via this link. Practice Tips & Takeaways Post-petition windfalls within 180 days — including life insurance — are property of the estate under § 541(a)(5). Absent a clear exemption, these funds can require 100% plans or force debtors into conversion or dismissal. Group policy proceeds are exempt under N.C.G.S. § 58-58-165 — don’t forget to distinguish personal from group coverage. Prepetition planning is key:  If life insurance is a likely asset, Chapter 7 may be a more protective structure (particularly if the policy is owned by the deceased, not the debtor). Additionally,  family members can remove the debtor as a beneficiary (naming the beneficiaries children or even a spendthrift trust) at any time before death,  protecting those proceeds from creditors. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_hutsell.pdf (404.76 KB) Category Eastern District

Economics Review: Mangrum, Daniel and Wang, Crystal, Credit Score Impacts from Past Due Student Loan Payments & Student Loan Balance and Repayment Trends Since the Pandemic Disruption Ed Boltz Tue, 04/08/2025 - 19:53 Available at:  Credit Score Impacts from Past Due Student Loan Payments Student Loan Balance and Repayment Trends Since the Pandemic Disruption Summary: In these  companion posts from the New York Federal Reserve, the authors  highlighted how the pandemic and subsequent policy actions disrupted trends in the growth of student loan balances, the pace of repayment, and the classification of delinquent loans and  also how these changes affected the credit scores of student loan borrowers and how the return of negative reporting of past due balances will impact the credit standing of student loan borrowers. The authors estimate that more than nine million student loan borrowers will face significant drops in credit score once delinquencies appear on credit reports in the first half of 2025.  Commentary: As a  disproportionate number of student loan borrowers had prior delinquencies — indicating a high risk of re-default now that protections have lapsed —  from a bankruptcy perspective, this is the canary in the credit coal mine. These borrowers are not just behind on student loans; they are likely carrying correlated financial stress: credit cards, car loans, and medical debt. Filing a bankruptcy may make payment of those student loans affordable by eliminating other debt and may, depending on the continuation of the Department of Justice Student Loan guidance regarding stipulations of dischargeability, offer permanent relief. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document lse_2025_credit-score-impacts-mangrum-data.xlsx (60.3 KB) Document lse_2025_student-loan-balance-repay-mangrum-data.xlsx (65.34 KB) Document student_loan_balance_and_repayment_trends_since_the_pandemic_disruption_-_liberty_street_economics_compressed.pdf (287.24 KB) Document credit_score_impacts_from_past_due_student_loan_payments_-_liberty_street_economics_compressed.pdf (249.05 KB) Category Book Reviews