In a recent Alamba bankruptcy court ruling, the court ruled that the debtor is not obligated debtor to pay the lender’s bankruptcy-related attorney’s fees. The court relied on the four corners of the Chapter 13 debtor’s mortgage finding that there existed no unambiguous language rendering the borrower liable for attorney’s fees incurred by the lender after an event of default by the borrower. The court disallowed “filing fees and court costs” in the amount of $300, and fees for “plan review” in the amount of $350, sought by the debtor’s mortgage creditor in its Rule 3002.1(c) Notice of Post-Petition Mortgage Fees, Expenses, and Charges. In re Clark, 593 B.R. 661 (Bankr. S.D. Ala., August 6, 2018)

Courts will consider several factors when determining whether to permissively abstain under 28 U.S.C. § 1334(c)(1) from hearing a proceeding, including: (1) the effect of abstention on the efficient administration of the bankruptcy estate; (2) the extent to which state law issues predominate over bankruptcy issues; (3) the difficulty or unsettled nature of the applicable law; (4) the presence of a related proceeding commenced in state court or other non-bankruptcy court; (5) the basis of bankruptcy jurisdiction, if any, other than 28 U.S.C. § 1334; (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case; (7) the substance rather than form of an asserted “core” proceeding; (8) the feasibility of severing state law claims from core bankruptcy matters to allow…

Not in Virginia. In a recent 4th Circuit decision, the court held that the Virginia Department of Social Services, Division of Child Support Enforcement, was not entitled to post-petition funds held by the Trustee following the dismissal of Mr. Webb’s unconfirmed Chapter 13 case to apply against his delinquent child support. Affirming the bankruptcy and district courts, the Court of Appeals held that 11 U.S.C. § 1326(a) (2) unambiguously states that if a court does not confirm a bankruptcy plan, the Chapter 13 Trustee “shall return” all payments to the debtor. This requirement is sufficiently clear that it preempts Virginia law allowing levy of the Chapter 13 Trustee for delinquent child support.

Last week, Senator Lamar Alexander, the Chair of the U.S. Senate Committee on Health, Education, Labor and Pensions, proposed a program that would require student loan borrowers to repay their loans through mandatory automatic deductions from their paychecks.

In a recent Michigan bankruptcy court decision, the court used the “going concern forced sale value” to value Chapter 13 debtor’s business for purpose of best interests of creditors test in Code § 1325(a)(4). The court was faced with determining the proper valuation methodology for the Chapter 13 debtor’s interest in a hair salon; the valuation was necessary for purposes of a liquidation analysis under the best interests of creditors test in Code § 1325(a)(4). The court rejected both the debtor’s “non-going concern” liquidation value of $29,087 and certain creditors’ “going concern” fair market value of $239,000. The court said it would determine the business’s going concern forced sale value, because: 1.         The debtor’s plan of reorganization was premised on the business’s viability as a…

Budgeting is the key to your financial success. You have to know what you are doing with your money. Housing: How much do you spend on housing each month?  (Include rent/mortgage, taxes, insurance, utilities (electricity, gas, water, telephone, etc.), and repairs/upkeep) Food: What are your expenses at the grocery store, restaurants, etc.?  This includes anything consumed for food and beverage. Clothing: What is your average amount spent on clothes (Includes shoes, coats, and anything else you wear? Don’t forget about back-to-school spending, or clothes for holidays, special events, etc! Transportation: Include your car payments, license, insurance, gas, oil, repairs, etc.  Or this may be bus fare, taxis, etc. Health Care: List health insurance payments, bills for physician, dentist, hospital, optician, prescriptions, etc.  Remember to take…

Whether you are trying to improve your credit score or contemplating filing for bankruptcy, you must get a handle on your monthly budget. What is your total “net” monthly income including other benefit amounts? How much money does it cost you for to pay for your regular living expenses? If your income is less than expenses and you are living day to day, you probably need to work through an honest, searching and thorough budget. Request a free copy of our budget worksheet right now by emailing mike@mikeshovan.com.