By Michael L. Moskowitz and Melissa A. Guseynov

In a recent opinion of note, the Court of Appeals for the Third Circuit held that the automatic stay does not require a secured creditor to immediately turnover repossessed property . In re Joy Denby-Peterson, Case No. 18-3562 (3d Cir. Oct. 28, 2019).  Read the full opinion here.  

By Michael L. Moskowitz and Melissa A. Guseynov

In a recent decision of interest, the New York Court of Appeals, the highest court in New York State, held that if a divorce judgment grants a spouse an interest in real property and the spouse fails to docket the judgment where the property is located, the spouse’s interest is not subject to attachment by a subsequent judgment creditor that docketed its judgment and seeks execution against that real property. Pangea Capital Mgt., LLC v. Lakian, 2019 N.Y. Slip Op. 05059 (June 25, 2019).  See link here.

By Michael L. Moskowitz and Melissa A. Guseynov

In a recent decision of interest to mortgage lenders, Bankruptcy Judge Erik P. Kimball, sitting in the United States Bankruptcy Court for the Southern District of Florida, held that a debtor’s chapter 13 plan which incorrectly reduced a home mortgage payment remains valid and binding if lender failed to object to confirmation. In re Edwards, 13-25698 (S.D.Fla. May 22, 2019).

By Michael L. Moskowitz and Melissa A. Guseynov

Weltman & Moskowitz has previously reported on noteworthy cases regarding possible violations of the automatic stay with respect to actions taken by lenders relating to debtors’ deposit accounts. In a recent decision of interest, District Judge Kenneth M. Karas, sitting in the Southern District of New York, held that the automatic stay does not prohibit a bank from imposing a temporary administrative hold on a debtor’s bank account. In re Weidenbenner, 15-244 (S.D.N.Y. April 25, 2019).

By Michael L. Moskowitz and Melissa A. Guseynov

Student loan indebtedness is one of the most substantial economic problems facing this country today.  According to Federal Reserve data, outstanding student loan debt has tripled since 2006, skyrocketing from under $500 billion to over $1.6 trillion today.  In fact, among all household debt, student loans rank the highest with respect to delinquency rate. A recent survey found that 1 in 15 borrowers has considered suicide due to their student loan debts.

The American Bankruptcy Institute Commission on Consumer Bankruptcy recently issued a final report, which among other things, included research and recommendations for improvements regarding the treatment of student loan debt in bankruptcy.  

By Michael L. Moskowitz and Melissa A. Guseynov

In a recent opinion of note, the Court of Appeals for the Sixth Circuit affirmed the sole owner of a debtor corporation and his lawyers violated the automatic stay by seeking to prosecute claims belonging to debtor. Lowe v. Bowers (In re Nicole Gas Production, Ltd.), 916 F. 3d 566 (6th Cir. 2019). Read the full opinion here.

By Michael L. Moskowitz and and Melissa A. Guseynov

In the last few months, we have reported on several decisions relating to whether a parent’s school tuition payments for an adult child constitute constructively fraudulent transfers.  New York and Connecticut have taken similar approaches in deciding the issue. However, there is still much to be resolved in this developing body of case law.

In a recent decision from the Bankruptcy Court for the Southern District of New York, Geltzer v. Oberlin College (In re Sterman), 18-01015 (Bankr. S.D.N.Y. Dec. 4, 2018), Bankruptcy Judge Martin Glenn held that parents’ tuition payments for their minor children did not constitute fraudulent transfers. Significantly, the age of majority in New York is 21, and not 18, as in many other states. In this case, the parents, who subsequently filed for bankruptcy protection, made certain tuition payments before their children were 21, and other educational payments after they reached the age of majority.

By Michael L. Moskowitz and and Melissa A. Guseynov

We previously reported on whether an insolvent parent's school tuition payments for an adult child could constitute constructively fraudulent transfers. As conveyed in our recent article, the Eastern District of New York denied a trustee’s request to recover tuition payments from three universities. See Pergament v. Brooklyn Law School, Case No. 18-2204 (E.D.N.Y. Nov. 27, 2018). Such attempts by trustees to recover tuition payments from higher education institutions made by parents on their children’s behalf is a relevant and rapidly developing issue with substantial consequences for parents, students and universities.

By Michael L. Moskowitz and Melissa A. Guseynov

The United States Supreme Court recently denied a petition for certiorari in a Ninth Circuit case entitled Ritter v. Brady (No. 18-747), seeking to overrule the Court’s 1992 decision in Dewsnup v. Timm, 502 U.S. 410 (1992). This denial suggests the Court will not reconsider Dewsnup anytime soon.

By Michael L. Moskowitz and Melissa A. Guseynov

In a decision of first impression out of the Bankruptcy Court for the District of Arizona, Judge Daniel P. Collins, U.S.B.J., held that pet insurance proceeds are exempt under Arizona law and the exemption is not limited to a debtor’s claimed value of their pet. In re Hill, 18-07595 (Bankr. D. Ariz. Nov. 15, 2018).

 By Michael L. Moskowitz and Melissa A. Guseynov

In a recent decision of interest, a local chapter 7 bankruptcy trustee appealed Eastern District of New York’s Chief Bankruptcy Judge Craig’s decision denying his request to recover tuition payments from three institutions of higher learning. Pergament v. Brooklyn Law School, Case No. 18-2204 (E.D.N.Y. Nov. 27, 2018). Efforts by trustees to recover tuition payments from higher education institutions made by parents on their children’s behalf is an emerging issue with decisions abounding on both sides of the equation.

 By Michael L. Moskowitz and Melissa A. Guseynov

In a recent decision of interest, Bankruptcy Judge John T. Laney, III held that the automatic stay does not prohibit a creditor from retaining a voluntary post-petition payment from non-bankruptcy estate funds on account of a pre-petition claim. In re Adams, 18-40696 (Bankr. S.D. Ga Sept. 12, 2018).

In Adams, debtor owed lender approximately $7,000 in pre-petition debt secured by a lien on certain personal property. After filing for bankruptcy, debtor obtained a loan from a different lender and used those funds to satisfy the pre-petition debt. The pre-petition lender did not seek payment of its debt and did not demand or even encourage debtor’s payment.

 By Michael L. Moskowitz and Michele K. Jaspan

We previously reported there is a split between the First and Ninth Circuits regarding the applicability of the good faith defense when a creditor violates the “discharge injunction.” In Lorenzen v. Taggart, the Ninth Circuit held that a creditor’s good faith belief that an action does not violate the discharge injunction precludes a finding against the creditor for contempt. Conversely, the First Circuit, in IRS v. Murphy, widened the split when it found the government employee who knew debtor received a discharge, could be held in contempt even though the government had a good faith belief the action did not violate the discharge injunction.