In re Bradley

In re Bradley:  A debtor's attorney, his firm, and the owners of the firm would be individually sanctioned for filing documents without obtaining the debtor's signature, verification, or authorization and for utilizing "appearance attorneys" in the representation of their clients.

Kagenveama overturned

An en banc panel of the Ninth Circuit Appellate Court overturned Maney v. Kagenveama in Danielson v. Flores. 

Supreme Court hears arguments on Chapter 12 bankruptcy, insider trading

http://jurist.org/paperchase/2011/11/supreme-court-hears-arguments-on-farm-bankruptcy-insider-trading.php

Case Update

Sikes v. Crager,


2011 WL 4591889 (W. D. La, Sept. 30, 2011) (Hicks)

A Chapter 13 plan proposing to pay only attorney’s fees and with little or no meaningful distribution to creditors is a plan not proposed in good faith.

Bankruptcy Case Law

In re Dumont, 383 B.R. 481, 489 (9th Cir. BAP 2008)


“Ride through” option under pre-BAPCPA law was eliminated in 2005. However, “if a debtor is in compliance with sections 521(a)(6) or 362(h)(1) and (2), then section 521(d) has no effect, and enforcing an ipso facto default clause is still barred by the Code.”



In re Bennett, 298 F.3d 1059 (9th Cir. 2002)

Absent a valid reaffirmation agreement, an agreement to repay a discharged debt is unenforceable under section 524(a)(2), regardless of California law to the contrary

Dickson- Countrywide (6th Cir.)

The U.S. Court of Appeals for the Sixth Circuit recently ruled that a Chapter 13 debtor whose mobile home was involuntarily converted to real property by court order had standing to seek avoidance of a perfected lien on the real property under Section 522(h)(1) of the bankruptcy code.

The borrower in this matter gave Countrywide Home Loans ("Countrywide") a note and mortgage on an unimproved lot in consideration for a loan. She then used the loan proceeds to purchase a manufactured home, and placed that home on the mortgaged real property. Under the terms of the mortgage, Countrywide was granted a lien against the real property and "all improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of that property." Several years later, the borrower filed for bankruptcy under Chapter 7 and was granted a discharge; she did not reaffirm the debt.

After a subsequent default, Countrywide initiated foreclosure proceedings.

In its foreclosure complaint, Countrywide asserted that while the parties had intended the mortgage to secure a valid, first lien on the manufactured home, the borrower had failed to surrender the title to the manufactured home, thus preventing the Countrywide from noting its lien on the title to the manufactured home. Countrywide obtained a judgment from the state court that it had a valid first priority lien on the real property, that the real property be sold to satisfy Countrywide's lien, and that the manufactured home be "deemed converted to real estate."

Shortly thereafter, the borrower filed a Chapter 13 petition. Countrywide sought relief from the stay, but the borrower responded by filing an adversarial complaint, asserting that Countrywide had failed to properly perfect its lien on the manufactured home. Countrywide moved for summary judgment on the bases that the borrower lacked standing to bring the adversary proceeding because the mortgage lien was consensual, that the borrower's claim was barred by res judicata as a result of the prior Chapter 7 case, and that the prior state court judgment prevented avoidance of Countrywide's lien. The borrower filed a similar cross motion for summary judgment, disputing each of Countrywide's assertions.

The bankruptcy court denied both parties' motions, and ruled that the borrower did have standing because the lien at issue was created by a non-consensual judgment lien. After renewed cross motions from both parties, the bankruptcy court eventually again ruled in favor of the borrower, concluding that "the only manner in which to perfect a lien on a manufactured home under Kentucky law is by noting the lien on the certificate of title, that Countrywide had failed to perfect its lien, and that even if Countrywide had perfected its lien, such lien was avoidable as a preference." On appeal, the Bankruptcy Appellate Panel upheld the bankruptcy court's judgment and order in favor of the borrower, and Countrywide appealed to the Sixth Circuit.

The Sixth Circuit noted that, under Kentucky law, "a manufactured home is personal property for which a certificate of title is required" and that "[i]n order to perfect a lien on personal property, the lien must be noted on the certificate of title." However, the Court also noted that "a manufactured home may also be converted from personal property to an improvement to real estate.thereby allowing perfection through first recording without notice."

The Court further noted that "the plain language of the mortgage contract did not grant Countrywide a lien on [the borrower's] manufactured home as personal property." Accordingly, "unless converted to an improvement to real estate, Countrywide did not obtain a security interest in the manufactured home through the mortgage contract."

The Court also considered various state-law decisions in ruling that "even if Countrywide obtained a lien against the manufactured home by way of the mortgage contract, it is undisputed that Countrywide did not note this security interest on the certificate of title, and the filing of a lis pendens cannot serve to perfect a security interest in a manufactured home" and thus, "before the state-court foreclosure judgment, Countrywide did not have a perfected lien on the borrower's manufactured home."

The Court then examined the state court order of sale converting the borrower's manufactured home to an improvement to real property, and concluded that the state court judgment created a perfected security interest in the manufactured home. The Court also noted that, because the borrower did not appeal the state court judgment, the conversion was binding under the doctrine of res judicata.

In addition, the conversion also placed the manufactured home "clearly within the terms of the mortgage contract," which then "granted a security interest in favor of Countrywide on the listed real estate, together with 'all the improvements now or hereafter erected on the property.'"

Accordingly, the Court ruled, "upon the entry of the state-court judgment.

Countrywide possessed a perfected lien on the borrower's manufactured home."

The Court then considered whether the borrower had standing to seek avoidance of Countrywide's perfected lien. Considering the language of Section 522(h) of the Bankruptcy Code, the Court ruled that "a Chapter 13 debtor has standing to avoid a transfer under Section 522(h) if five conditions are met: (1) the transfer was not voluntary; (2) the transfer was not concealed; (3) the trustee did not attempt to avoid the transfer;

(4) the debtor seeks the avoidance pursuant to Sections 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code; and (5) the transferred property is of a kind that the debtor would have been able to exempt from the estate if the trustee had avoided the transfer under one of the provisions in Section 522(g)."

The Court ruled that Countrywide did not obtain a perfected security interest in the manufactured home until it "was converted to an improvement to real estate, thereby bringing the home within the boundaries of the mortgage contract," and thus, "while a transfer in real property did occur through the mortgage contract, the mortgage was not the triggering transfer."

Rather, the Court ruled, the "conversion of [the borrower's] manufactured home to an improvement to real property was involuntary because it was accomplished by operation of law without consent." Countrywide did not dispute that the borrower met requirements 2 through 4 of Section 522(h), and therefore, the Court ruled, the borrower "possesses direct standing"

to avoid Countrywide's lien pursuant to Section 522(h).

Finally, the Court also considered whether the lien was properly avoided pursuant to Section 547, which as you may recall allows for the avoidance transfers within the 90 days period before the filing of a bankruptcy petition. The Court first examined a prior decision holding that under Section 547, "a transfer is deemed to have been made at the time the transfer is perfected, if perfection takes place more than 30 days after its creation."

However, the Court ruled, "the creation and perfection of Countrywide's interest in the manufactured home occurred at the time of the state-court judgment. [which was] well-within the 90-day preference period" and therefore, the Court ruled "Countrywide's lien on the manufactured home was properly avoided pursuant to Section 547.5."

In Re Veal 9th Cir. BAP

The United States Bankruptcy Appellate Panel of the Ninth Circuit recently overturned a bankruptcy court’s orders granting stay relief and allowing the filing of a proof of claim. Under the facts at issue, the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) held that the parties seeking relief from the automatic stay and filing a proof of claim lacked  standing to enforce the mortgage and promissory note at issue.
In two related bankruptcy appeals, the debtors asserted that the asset securitization trust ("Trust") and mortgage loan servicer ("Servicer") lacked standing as real parties in interest to obtain the relief they sought from the bankruptcy court. In one the debtors' Chapter 13 bankruptcy, Trust filed a motion for relief from the automatic bankruptcy stay in order to foreclose its interest in the debtors’ mortgage loan that it purportedly acquired by way of assignment. Similarly, Servicer filed  a proof of claim in the bankruptcy as Trust’s servicing agent.

Based in part on the documentation submitted by Trust and Servicer, the bankruptcy court determined that Trust had standing to obtain relief from the stay and also allowed Servicer’s proof of claim, over the debtors’
objection. The debtors appealed, and the BAP reversed.

As to the appeal regarding Servicer’s proof of claim on behalf of the Trust, the BAP noted that the bankruptcy court failed to make any findings necessary to determine the central issue of Servicer’s standing as a “person entitled to enforce” the mortgage obligation or as the agent of such a person. The BAP held that Servicer presented insufficient evidence showing that it had enforcement rights under the Note or that it had an agency relationship with the Trust. The BAP also held that Servicer presented insufficient evidence as to who possessed the Note and insufficient evidence showing indorsement of the Note either in its favor or in favor of the Trust, for which Servicer was allegedly acting as servicer. Thus, according to the BAP, Servicer could not establish that it held enforcement rights under the Note.

Here, Servicer submitted: (1) a copy of the Note bearing indorsement to Servicer's predecessor in interest; (2) a letter from Servicer's in-house counsel attesting to the indorsee's status as predecessor in interest to Servicer; (3) a copy of the Mortgage; and (4) a copy of the Assignment of Mortgage to Servicer's predecessor in interest. The BAP objected to and refused to allow into evidence the unauthenticated letter from Servicer's in-house counsel attesting to the indorsee's status as predecessor in interest to Servicer.

According to the BAP, to obtain stay relief, Trust had to show that it either was a “person entitled to enforce” the Note under Article 3 of the UCC (as a “holder” of the Note or as a “nonholder in possession . . . who has the rights of a holder”), or that it had an “ownership or other property interest in the Note” under Article 9. See UCC §§ 3-301(i); 3-301(ii); 9-109(a)(3)(respectively pertaining to a holder of a note, a nonholder in possession, and transfer of ownership of a note).

As to the appeal regarding Trust's motion for relief from stay, the BAP noted that none of the evidence submitted by Trust placed it into one of these categories. Indeed, the evidence failed to show that the
assignment of the mortgage to Trust included any interest in the promissory Note itself. The BAP pointed out that the record lacked any evidence of an indorsement of the Note to Trust. The BAP further noted that under applicable law, the assignment of a mortgage without the Note is a “nullity,” thereby rendering the mortgage ineffective and the Note an unsecured debt. Thus, the BAP concluded that the bankruptcy court erred in determining that Trust had an enforceable interest in the Note and erred in granting Trust’s motion for relief from stay.

Here, the Trust submitted the following documents: (1) a copy of the Mortgage; (2) an itemization of postpetition amounts due; (3) the debtors' Schedules A and D; (4) a copy of the Note, indorsed to Servicer's predecessor in interest; (5) a copy of the Assignment of Mortgage to Servicer's predecessor in interest; and (6) a copy of another Assignment of Mortgage, recorded after the filing of the first relief from stay motion, from Servicer's predecessor in interest to Trust. The BAP noted that, although the first assignment of mortgage included an assignment of the Note to Servicer's predecessor in interest, the second assignment of mortgage to Trust did not contain such an assignment of the Note. The BAP also noted that the documents were not authenticated.

In summary, the BAP reversed the stay relief order and vacated the bankruptcy court’s order overruling the debtors’ claim objection, and remanded for further proceedings on the proof of claim.

In re Henderson,

2011 WL 1467934 (Bankr. D. Idaho, April 18, 2011) (Pappas)

A Chapter 13 debtor with no calculated projected disposable income, the applicable commitment period need not propose a minimum duration of a plan; Kagenveama still has some validity

Hamilton v Greenich Investors 2DCA 6/1/11

The Court of Appeal of the State of California, Second District, recently confirmed that if a borrower fails to "schedule" or disclose claims against a creditor in the borrower's bankruptcy proceedings, the borrower is barred from litigating the undisclosed claims against the creditor in subsequent proceedings.


The plaintiff-borrower defaulted on his home loan. He entered into a forbearance agreement with the servicer of the loan, Select Portfolio Servicing, Inc. ("SPS"), but then re-defaulted. SPS notified the borrower that his loan had been transferred to Greenwich Investors ("Greenwich").

The borrower then filed for bankruptcy, making no mention of a possible claim against Greenwich. The borrower's bankruptcy workout plan called for borrower to make regular payments to Greenwich. The borrower again defaulted, and Greenwich initiated nonjudicial foreclosure proceedings.

The borrower then filed suit against Greenwich, alleging breach of contract, fraudulent and negligent misrepresentation, and violation of foreclosure statutes. These claims arose from Greenwich's alleged failure to acknowledge the forbearance agreement, as well as Greenwich's alleged failure to abide by the notice provisions of the relevant foreclosure statute, among other alleged statutory violations.

Greenwich demurred to the borrower's complaint, on the grounds that the borrower was barred from raising his claims by the doctrines of res judicata and estoppel. The trial court sustained the demurrer, and the foreclosure sale took place. The borrower appealed, but the appellate court upheld the trial court's decision.

The appellate court's decision to sustain the lower court hinged on the application of the rule established in Oneida Motor Freight, Inc., v.
United Jersey Bank, 848 F.2d 214 (3d Cir. 1988). As you may recall, the court in Oneida Motor Freight stated that a party's failure to disclose litigation claims likely to arise in a nonbankruptcy context "triggers application of the doctrine of equitable estoppel, operating against a subsequent attempt to prosecute the action." Id. at 417.

The borrower argued that cases decided subsequent to Oneida Motor Freight provided that the rule applied only where the nondisclosure was accompanied by bad faith. The court disagreed because, among other reasons, the cases cited by borrower did not involve a subsequent lawsuit against an entity that had been a creditor in the bankruptcy proceedings.

As such, in the other cases, the debtor did not benefit from the nondisclosure. As the cases the borrower relied upon by the borrower were all distinguishable from the matter at hand, the court concluded that the Oneida Motor Freight rule should apply. Therefore, the borrower was barred from litigating the claims he failed to disclose in his bankruptcy proceedings.

However, the borrower's statutory claims (lack of notice, failure to provide a loan modification) arose after the bankruptcy proceedings, and thus were not barred by the Oneida Motor Freight rule. However, the court found no merit in either claim.

In re Scholz

2011 WL 1528470 (9th Cir. B.A.P. March 22, 2011)


Benefits from the Railroad Retirement Act are included in the calculation of Current Monthly Income but must be excluded from the determination of Projected Disposable Income because  of an "anti-anticipation" clause.

Chip Parker is Now Attacking Bankruptcy Trustees

http://www.bankruptcylawnetwork.com/florida-chapter-7-bankruptcy-trustees-tactics-rebuked-by-courts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BankruptcyLawNetwork+%28Bankruptcy+Law+Network%29



The bankruptcy trustee has every right to demand rent or vacation of the house if the homestead exemption was not applied, despite what Chip thinks.

The Supreme Court of Florida stated last month its decision in Osborne v. Dumoulin, — So. 3d –, 2011 WL 320986 (Fla. 2011). In the Osbourne decision, Chief Justice Canady explains that a bk debtor need not do anything affirmative to not claim or receive the benefit of the homestead exemption. A homeowner can choose the $4,000 wildcard exemption if it provides a greater protection than the homestead exemption would. Actual abandonment of the home is not necessary. HOWEVER, the Court states, “When the debtor in bankruptcy does not claim the homestead exemption, the debtor effectively surrenders the homestead to the trustee for administration.” The trustee can sell the home whether occupied or not.

Some trustee have told me that they intend to offer to sell a quitclaim deed to the property to the debtor’s mortgage holder.  If they can also evict the Debtor’s this will be more attractive to the creditor’s.

http://www.floridasupremecourt.org/decisions/2011/sc09-751.pdf


In the Iuliano case, the Trustee argued - a debtor who does do not claim his homestead as exempt in his bankruptcy petition, but refuses delivering exclusive possession to the Trustee for administration, is impeding the Trustee’s administration of the property.

Federal District Judge Moody stated:

11 U.S.C. § 542(a) requires a debtor to deliver to a trustee the property of the estate, “unless such property is of inconsequential value or benefit to the estate.” Where the estate has no equity in an asset, so that unsecured creditors are unlikely to benefit from a sale of the property, it is generally recognized that abandonment is the appropriate method of dealing with the asset, not liquidation. [Cite omitted.] Where there is no equity, it makes no sense for a Bankruptcy Court to order the surrender of possession of property to the Trustee.

http://www.bankruptcylawnetwork.com/wp-content/uploads/2011/05/Iuliano-v.-Brook1.pdf


The trustee will still be able to evict the Debtors once he has a buyer for the property.

Bankruptcy Litigation Blog Cases

http://www.bankruptcylitigationblog.com/archives/twitter-posts-bankruptcy-tweets-for-may-2011-part-ii.html




BK-DE: Trustee need not plead transferors' fraudulent intent with particularity; alleging "badges of fraud" sufficient. http://ow.ly/4UNZl




BK-FL: Subst. consolidation of Perlman cases proper even if it destroys the trustee's "wrong payor" avoidance actions. http://ow.ly/4UH1r




BK-ND-CA: Oversecured creditor not entitled to default rate of interest where its claim is paid in full in a ch 11 plan. http://ow.ly/4UOhy




D-AZ certifies appeal to 9th: Can confirmed plan enjoin actions against non-debtor guarantor if there's no plan default? http://ow.ly/4UOq1




BK-EDNY: Personal property lease can't be reaffirmed, only assumed under Code Section 365(p). http://ow.ly/4V1hD




BK-HI:"2 year period [to bring §548 claim] is a substantive element of the trustee's claim, not a statute of limitation." http://ow.ly/4V1kB




BK-HI: Statute of limitations doesn't bar UFTA action for fraudulent tsf older than 4 yrs but discoverable < 1 yr pre-BK. http://ow.ly/4V1kB

In re Fluellen,

In re Fluellen, 2011 WL 986342 (Bankr. M.D. Ga. March 18, 2011) (Smith)

Where the Chapter 13 Trustee had actual knowledge of the timing of the perfection of a security interest in the Debtor's car at the time of confirmation, confirmation bars the Trustee from subsequently pursuing an avoidance action.

Too Much Income for Chapter 7

4th Circuit: Calhoun v. U.S. Trustee


Citation:
No. 09-1646 (4th Cir. May 3, 2011)

Ruling:

Affirmed. The bankruptcy court looked at the totality of the debtors' financial circumstances and determined that based upon the debtors' ability to pay their creditors and other considerations, abuse was present. The Court found no error in the bankruptcy court's decision to dismiss the debtors' Chapter 7 case and the evidence supported the bankruptcy courts finding of abuse pursuant to Section 707(b)(3).

Monk v. LSI Title Company of Oregon (In re Monk), 2011 WL 212381 (Bankr. D. Ore. January 21, 2011)

Monk v. LSI Title Company of Oregon (In re Monk), 2011 WL 212381 (Bankr. D. Ore. January 21, 2011)


Where a mortgage claim is disallowed during a Chapter 13 case, the lien is void and the mortgagee may not pursue rights against the property after the Debtor receives a discharge.

Bankruptcy = No Job? Well Maybe.

Section 525 of the Bankruptcy Code provides the following (applicable to private, non-government employers):


(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt--

(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;

(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or

(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

In a recent case, the Fifth Circuit Court of Appeals reached a different conclusion and held that discrimination in the hiring process was not prohibited by Section 525(b).

In Burnett v. Stewart Title, Inc., No. 10-20250, 2011 WL 754152 (5th Cir. March 4, 2011) (click here for .pdf of opinion) the issue was whether §525(b) created a private cause of action for a debtor who was denied employment by a private employer.

The Court contrasted the language of §525(a), applicable to government units:
... a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act...

(emphasis added). The Court noted that Congress included specific language about denying employment in subsection (a), applicable to public employers, but omitted the language in subsection (b), applicable to private employers. Under the rules of statutory construction, it is presumed that Congress "acted intentionally and and purposefully in the disparate inclusion or exclusion" of specific language, and statutes are to be read as a whole. In short, had Congress wanted to include the denial of employment in §525(b), which was enacted several years after subsection (a), they knew very well how to so. We have to assume the omission was intentional.

Therefore, employers in the Fifth Circuit (Texas, Louisiana, Mississippi)  apparently are free to discriminate against applicants based on a prior bankruptcy filing of the applicant or a person associated with the applicant (such as a spouse).

Lien Stripping

Bankruptcy -- Liens -- Avoidance -- Liens securing allowed claims -- A Chapter 13 debtor who is ineligible to receive a Chapter 13 discharge may not strip down or strip off the lien of wholly unsecured mortgage in a Chapter 13 plan -- Chapter 13 debtors were ineligible to receive Chapter 13 discharge, because debtors had obtained Chapter 7 discharges within four years of filing their Chapter 13 petitions -- On petition date, junior creditors had allowed secured claims against debtors' bankruptcy estates in form of mortgage liens encumbering debtors' property, even though debtors' personal obligations to creditors were discharged in prior Chapter 7 cases, because creditors' mortgage liens survived debtors' Chapter 7 discharges -- Junior liens could not be modified using 11 U.S.C. Section 506(d) of Bankruptcy Code, which provides that to extent that lien secures a claim against debtor that is not an allowed secured claim, such lien is void, because statute is not self-executing, and may not be used to strip down or strip off liens except in conjunction with another section of Code -- In Chapter 13 case at issue, Section 1325 provides the mechanism for lien stripping, but juniors liens may not be stripped off under that section because debtors are not eligible to receive a discharge

Reported at 22 Fla. L. Weekly Fed. B650a

In re Gerardin

In re Gerardin, 2011 WL 1118495 (Bankr. S.D. Fla. March 11, 2011) (Mark)


A debtor who is ineligible for a Chapter 13 discharge may not strip down or strip off a lien

7th Cir Says FDCPA Prohibits Misleading Representations Only to "Consumers and Those Who Stand in the Consumer's Shoes" (and Not Judges)

The U.S. Court of Appeals for the Seventh Circuit recently held that the provisions of the federal Fair Debt Collection Practices Act (“FDCPA”) regulating false or deceptive communications from a debt collector (15 U.S.C. 1692e) extend only to “consumers and those who stand in the consumer’s shoes,” which does not include judges.

Palisades Acquisition XVI (“Palisades”) filed an action to collect a credit card debt in state court. Palisades’s complaint attached an exhibit resembling a credit card statement. The exhibit included a statement closing date several months before the complaint was filed, and listed Palisades as the issuing party. Although the exhibit looked like an authentic credit card statement, Palisades admitted that it had never sent the document to the debtor before filing the complaint.

When the debtor appeared in court to challenge Palisades’s collection action, Palisades voluntarily dismissed its complaint. The debtor subsequently sued Palisades in federal court, alleging that Palisades violated that the FDCPA by attaching to its complaint a document resembling a credit card statement, which the debtor claimed was materially false, deceptive, and misleading to a state court judge viewing the document in the context of granting a default judgment.

The Seventh Circuit rejected this argument, holding that the FDCPA provisions apply only to consumers and those who stand in consumers’ shoes, and held that state court judges do not stand in a consumer’s shoes. Noting that the FDCPA’s purpose is to protect consumers, the Seventh Circuit found that the Act’s prohibitions “are clearly limited to communications directed to the consumer and do not apply to state judges.”

The Court specifically stated that “drawing the line at communications directed at consumers . . . gives consumers the full breadth of protection that the [FDCPA] permits and keeps us from reading into the Act whatever implausible ends [the debtor’s] lawyers can conjure up.”

The majority explained as follows:

"As a general matter, the Act and its protections do not extend to third parties. Although courts have extended the Act’s prohibitions to some statements made to a consumer’s attorney, Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 773-75 (7th Cir. 2007), and to others who can be said to stand in the consumer’s shoes, Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 650 (6th Cir. 1997) (en banc) (holding that executrix could sue because the Act applies to anyone who “stand[s] in the shoes of the debtor [with] the same authority as the debtor to open and read the letters of the debtor”), none has extended the Act to persons who do not have a special relationship with the consumer. In fact, the Eighth Circuit rejected an argument that the Act applied to representations that were not directed to the consumer: “The weight of authority applying section 1692e does so in the context of a debt collector making a false, deceptive, or misleading representation to the plaintiff.” Volden v Innovative Financial Systems, Inc., 440 F.3d 947, 954 (8th Cir. 2006) (emphasis in the original) (the false statements at issue were not made to the consumer but between a check guarantee company and a returned-check processor).

Thus, the Act is limited to protecting consumers and those who have a special relationship with the consumer— such that the Act is still protecting the consumer— from statements that would mislead these consumers. The Act is not similarly interested in protecting third parties. Id.; see also Guerrero v. RJM Acquisitions, LLC, 499 F.3d 926, 934 (9th Cir. 2007) (noting “Congress did not view attorneys as susceptible to the abuses that spurred the need for the legislation”)."

163 Exemptions from BK Prof Blog

Westlaw “Headnote of the Day” -- Chapter 7 "vehicle" ?


163 Exemptions

163I Nature and Extent

163I(C) Property and Rights Exempt

163k44 k. Vehicles and Teams.

Parts which Chapter 7 debtor had collected from various sources, and which, while they had never been assembled, would, if assembled, comprise a working automobile, did not constitute a "vehicle," for purposes of Oregon exemption statute; while exemption statute was to be liberally construed, liberal construction could not transform pile of parts into automobile.

In re McMillin, 441 B.R. 348 (Bankr. D. Or. 2010)