Updates in Bankruptcy Law
- The Supreme Court confirmed that a Chapter 7 debtor cannot strip off and discharge a second mortgage loan even where the amount owed on the first mortgage exceeds the fair market value of the home and there is no “equity” to which the second mortgage can attach. This relief is available in a Chapter 13 bankruptcy, however. Bank of America v. Caulkett, 135 S.Ct. 1995 (2015)
- The Supreme Court also decided that, when a Chapter 13 debtor converts to a Chapter 7 bankruptcy, any post-petition income held by the Trustee must be returned to the Debtor. Harris v. Viegelahn, 135 S.Ct. 1829 (2015)
- A daughter’s attempt to help her father backfired in Sauer, Inc. v. Lawson, 791 F. 3d 214 (2015). The father owed money and transferred a large sum to his daughter to hide from his creditors. One of the creditors sued the daughter claiming a fraudulent conveyance and obtained judgment. The daughter then filed bankruptcy. The bankruptcy court found that the judgement was non-dischargeable under 11 U.S.C. Section 523(a)(2)(A) as it resulted from fraudulent conduct.
- If you hope to discharge taxes in bankruptcy, you must have filed your tax returns on time. This was the ruling in Fahey v. Mass. Dept. of Revenue, 779 F. 3d 1 (2015)