The automatic stay is immediately effective when a debtor files a petition for bankruptcy relief. The scope of the automatic stay is broad. The stay applies to all creditors and prohibits both formal and informal actions against the debtor and his property. And after the case is complete, the discharge injunction enjoins creditor action to
Bradley’s Bankruptcy Basics: Automatic Stay Considerations When Businesses File for Bankruptcy
The automatic stay is a procedural tool in a bankruptcy case that effectively halts efforts by creditors to collect on a debtor’s outstanding obligations. As discussed in more detail in our prior post, immediately upon the filing of a bankruptcy petition, a “bankruptcy estate” is created, which includes virtually all assets of the debtor.
Does Bankruptcy Rule 3002.1’s Remedy Provision Apply for Filings with Inaccurate Information?
Federal Rule of Bankruptcy Rule 3002.1 went into effect December 1, 2011. It was implemented to address a perceived problem in “cure and maintain” Chapter 13 cases (cases in which the debtor cures any pre-petition arrearage and maintains monthly post-petition payments on long-term loans) – that mortgage creditors were not providing the debtor with notice
Bradley’s Bankruptcy Basics: The Automatic Stay and the “Why” Behind the Warnings: What Happens Once a Debtor Files for Bankruptcy?
Many creditors have been warned of the need to halt collection efforts once they are put on notice that a debtor has filed for bankruptcy. However, the “why” behind this warning, mainly the automatic stay, is often misunderstood or disregarded. Since violations of the automatic stay can have serious ramifications, it is crucial that creditors
The Availability of Sanctions Under Bankruptcy Rule 3002.1 for Noncompliance – the Second Circuit’s Decision in In re Gravel
The Second Circuit’s August 2021 decision in In re Gravel, 6 F. 4th 503, has already received considerable attention and generated much debate over the last few months. Gravel involved the Vermont bankruptcy court’s initial entry of $375,000 in sanctions against a mortgage creditor based on the creditor’s inclusion of fees on a monthly
New Bankruptcy Rules to Take Effect December 1, 2021
A few changes to the Federal Rules of Bankruptcy Procedure became effective on December 1, 2021. The most noteworthy change relates to Bankruptcy Rule 9036, which addresses notice and service by electronic transmission.
- Bankruptcy Rule 2005 – Bankruptcy Rule 2005 generally deals with the apprehension and removal of a debtor to compel attendance at an
Old Myths Die Hard: District Court Reverses Bankruptcy Court’s Discharge of Student Loan Debt Under Brunner
A district court judge recently reversed and remanded a well-known bankruptcy decision discharging a significant student loan debt. In the Southern District of New York, Judge Philip Halpern, reviewing the bankruptcy court’s summary judgment decision de novo, found that neither the debtor nor the defendant were entitled to summary judgment under the familiar Brunner test.
After (Another) Unusual Year, We’re Very Thankful and Wish You a Happy Thanksgiving
Now that the pandemic’s “social distancing” is lessening, we hope you are all able to gather with friends and family this Thanksgiving. As we do the same, we wanted to count our blessings as we review the year. This year, we are thankful for being able to return to our offices, our favorite restaurants, and
Second Circuit Follows Other Recent Circuit Opinions Re: Private Student Loan Discharge
The Second Circuit has followed the lead of the Tenth and Fifth Circuits in affirming a bankruptcy court ruling regarding private student loans under 11 U.S.C. § 523(a)(8). In Homaidan v. Navient, et al., the court ultimately held that the exception to discharge language – “an obligation to repay funds received as an educational
Bradley’s Bankruptcy Basics: Payment of Claims
One of the first things creditors ask after filing a proof of claim is, “when do I get paid?” As with so many other legal questions, the answer is, “it depends.” Although many different factors govern payment in a bankruptcy proceeding, there are four key elements to payment: proof, allowance priority, and timing.
Below, we