3rd Circuit

Courts are split on whether a debtor may amend a chapter 13 plan to cure post-petition defaults on a principal residence.

Sometimes, being too aggressive backfires when the defendant files bankruptcy.

An obligation can be penal in nature, and thus nondischargeable, even though it’s measured by pecuniary loss.

Even when after a finding of bad faith, the court retains discretion to deny punitive damages, Third Circuit says. Compensatory damages are not available if the debtor was failing anyway.

Third Circuit emphasizes the limitation of nonconsensual, third-party releases to ‘exceptional’ cases.

Third Circuit also holds that turnover in Section 542(a) is not automatic. The debtor must mount an adversary proceeding to obtain a turnover of property.

States have no sovereign immunity defense to lien stripping, even if the state has not filed a proof of claim.

Section 362(k) creates a private right of action that may be maintained even after dismissal of the underlying bankruptcy, the Third Circuit says.

Although a foreclosure sale can be immune from fraudulent transfer attack, a tax foreclosure not based on the value of the property can be a preference.

Money taken from a debtor’s own retirement account to pay a creditor does not qualify for the earmarking defense, Chief Judge Fehling says.