Consumer Bankruptcy

Consumer Mortgage Modification Mediation: A Florida Success Story

In the January 2015 edition of the ABI Journal, Kathleen Furr and Brett Switzer (hereinafter “the authors”) lauded the decision in In re Rose.[1] In that decision, the court rejected the concept of providing for the vesting of property of a chapter 13 estate in an entity other than the debtor, based solely on state law.[2] The authors relegate the opposite view to a couple of footnotes. That is unfortunate because the opposite view — such as the one in In re Watt[3] — correctly analyzes the applicable law. Because Rose focused on state law, its analysis is profoundly flawed.

[1]Most chapter 7 clients are looking for the quickest and easiest way to discharge their debts, retain or protect their assets and move on with their lives. Difficulties in achieving these results can arise when assets are disclosed or discovered after the bankruptcy filing. This will usually result in negative consequences for the debtor and will frequently prolong their case.

Theoretically, an individual bankruptcy debtor may amend property claimed as exempt on his or her Schedule C at any time until the close of the bankruptcy proceeding.[1] The debtor must give notice of the amendment to the trustee and to “any entity affected thereby,” which is usually all creditors.[2] Under 11 U.S.C. § 522(l), a party in interest may object to the debtor’s list of exempt property:

(l) The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section. If the debtor does not file such a list, a dependent of the debtor may file such a list, or may claim property as exempt from property of the estate on behalf of the debtor. Unless a party in interest objects, the property claimed as exempt on such list is exempt.[3]

[1]Since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), bankruptcy courts have struggled with how to follow certain provisions of the Bankruptcy Code directing the compensation of chapter 7 bankruptcy trustees.[2] On Jan. 12, 2015, the U.S. District Court for the Eastern District of Wisconsin weighed in on the issue by finding that the bankruptcy court correctly presumed that the trustee was entitled to a commission calculated using the formula proscribed in 11 U.S.C. § 326.[3] The decision in Mohns, Inc. v. Lasner illustrates the statutory scheme from which courts have struggled to determine chapter 7 trustee compensation, and correctly sets the stage for courts to award trustee compensation as a commission pursuant to the percentages contained in 11 U.S.C.

Following a nearly-three-year study, on Dec. 8, 2014, the ABI Commission to Study the Reform of Chapter 11 published a 400-page report containing recommendation and principles for policymakers. This article focuses on chapter 11 reform relating to professional retention and compensation.

The Business Side of Bankruptcy Lawyering
As a business owner, the “business” of lawyering is as equally important as doing good work. Landing the client, obtaining a sufficient retainer, managing the client’s expectations, making sure the client replenishes a retainer, doing the work well at a reasonable cost, and, last but not least, collecting payment.

Editor's Note: David Morris is the senior deputy prosecuting attorney for the Marion County Prosecutor’s Office Child Support Division and an adjunct professor at the Indiana University Robert H. McKinney School of Law.

Hon. Sheri Bluebond sits as chief judge on the U.S. Bankruptcy Court, Central District of California. She is a dynamic figure at most bar events and is revered by colleagues, attorneys and trustees. For example, she recently presented an award at the home of James T. King, a beloved leader of the bankruptcy community, who became bedridden while battling cancer.

Most debtors that are contemplating chapter 7 are on the brink of economic disaster. They have creditors harassing them, calling them nonstop, garnishing wages and income tax returns, and seizing their vehicles to satisfy judgments. These hardworking individuals simply do not have the extra funds to pay a bankruptcy attorney up front in full to file a bankruptcy case to stop the creditors. Alternatively, the options for the unfortunate debtor are to proceed file their bankruptcy pro se, hire a bankruptcy petition preparer or find an attorney that accepts alternative fee agreements. The debtor who attempts to go it alone or with a petition preparer faces a substantially greater risk of the bankruptcy case getting dismissed without a receiving a chapter 7 discharge. In the U.S.

A single bankruptcy court may handle hundreds of chapter 13 cases filed each week, and their orderly disposition depends on the finality of confirmed plans.[1] Nevertheless, Congress was aware that chapter 13 debtors frequently encounter turmoil and, less frequently, windfalls in their financial circumstances, rendering modifications of confirmed plans appropriate.