Category Archives: Secured Debts

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Bradley’s Bankruptcy Basics: COVID-19 Bankruptcy Relief Extension Act Extends Various CARES Act Amendments to the Bankruptcy Code

Last March, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) made several changes to the Bankruptcy Code, including those changes discussed in more detail here. As it became clear that we would be dealing with COVID-19 for much longer than previously anticipated, Congress passed the Consolidated Appropriations … Continue Reading

Bradley’s Bankruptcy Basics: Secured vs. Unsecured Claims

Bankruptcy is primarily about “claims.” The debtor seeks to discharge personal liability on claims, while creditors seek payment on their claims. In basic terms, a bankruptcy “claim” is a right to payment. The claim does not need to be fixed, settled, undisputed, or due at the time the debtor files his bankruptcy petition. The official … Continue Reading

Bradley’s Bankruptcy Basics: How to File a Proof of Claim 101

You just heard that a customer has filed for bankruptcy — what do you do now? One of the first steps is to determine whether you should file a proof of claim. How will I be alerted about the bankruptcy? When a bankruptcy case is filed, the debtor is required to list all of his … Continue Reading

Illinois Caps Consumer Loans at 36% Rate, Limiting Consumers’ Access to Credit

Last week, Illinois enacted the “Predatory Loan Prevention Act” (SB 1792), which would place a 36% rate cap on nearly all non-bank consumer loans. This act will essentially outlaw small-dollar loans in Illinois and may make ancillary products on auto loans, such as GAP insurance, unavailable for a large number of consumers. The act authorizes … Continue Reading

5 Key Takeaways from Bradley’s Bankruptcy Basics, Part 1

We hope that you’re enjoying Bradley’s Bankruptcy Basics. Are there topics you’d like to read more about? Please email Elizabeth or Alex; we’re always interested to hear what content you’d like to see in future months. Below are five key takeaways from our first month of Bradley’s Bankruptcy Basics: 1. The early bird gets the … Continue Reading

Bradley’s Bankruptcy Basics: 5 Significant (if Temporary) Amendments to the Bankruptcy Code Resulting from the COVID-19 Pandemic

As we cross the one-year anniversary of the COVID-19 pandemic, we reflect on the multiple amendments to the Bankruptcy Code that have been implemented to help curb the effects of various economic shutdowns and financial hardships caused by the coronavirus. These Bankruptcy Code amendments are only temporary, but Congress is considering extending them to facilitate … Continue Reading

Bradley’s Bankruptcy Basics: Chapter 13 Bankruptcy — Consumer Bankruptcy with a Payment Plan

Chapter 13 bankruptcy provides relief only to individuals with regular income. This Chapter is most frequently used by debtors who have sufficient disposable monthly income to make some payments over time to their creditors. Chapter 13 debtors frequently have enough equity in their residence that, if they were to file for Chapter 7, the residence … Continue Reading

Bradley’s Bankruptcy Basics: Chapter 11 Bankruptcy — Reorganization

Chapter 11 bankruptcy cases are most frequently filed by businesses. However, certain high-earning individuals whose debts are above the statutory debt limits to qualify for Chapter 13 can also file for Chapter 11 relief. In Chapter 11 cases, the debtor retains control of its operations as a debtor in possession (DIP) and has the benefits … Continue Reading

Bradley’s Bankruptcy Basics: Chapter 7 Bankruptcy — Liquidation

Chapter 7 bankruptcy cases are straight liquidations sought by debtors who wish to have most or all of their debts discharged. In Chapter 7 cases, the Chapter 7 trustee obtains control over the debtor’s assets and evaluates whether any equity exists that would offset the costs of selling those assets. If the bankruptcy estate will … Continue Reading

Bradley’s Bankruptcy Basics: The 6 Key “Players” in Bankruptcy Cases

Bankruptcy cases differ from typical lawsuits in a variety of ways, including the parties involved. Whereas standard lawsuits generally involve a plaintiff and a defendant, bankruptcy cases have a different cast of “players,” including the debtor or debtor in possession, creditors, the bankruptcy trustee (i.e., Chapter 7 trustee, Chapter 13 trustee, etc.), committees, and the … Continue Reading

Bradley’s Bankruptcy Basics: A Multimedia Series

Bankruptcy. The arrival of that notice stating a customer has filed for bankruptcy can evoke less-than-ideal responses: forwarding the notice to someone else who might know what to do with it (resulting in the notice ending up in a forever loop of being forwarded along); immediately writing off the account and cutting your losses; or, … Continue Reading

Supreme Court Holds Mere Retention of Bankruptcy Debtor’s Property Is Not a Violation of the Automatic Stay but More Questions Remain

For the past few years, the federal circuit courts have struggled with the issue of whether a creditor retaining possession of bankruptcy estate property violates the automatic stay. For example, is a creditor required to automatically turn over a vehicle as soon as the bankruptcy petition is filed, or can the creditor retain possession of … Continue Reading

Bankruptcy Court Upholds Foreclosure Sale That Occurred Between Bankruptcy Case Dismissal and Subsequent Reinstatement

Frequently, borrowers file for bankruptcy at the 11th hour to halt foreclosure sales. Once a petition for bankruptcy relief has been filed, secured creditors must cease their collection efforts to avoid violating the automatic stay. However, the automatic stay terminates upon a debtor’s dismissal and closure of the bankruptcy case. A Pennsylvania bankruptcy court recently … Continue Reading

Four Significant Changes to Consumer Bankruptcy Included in the Consolidated Appropriations Act, 2021

On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (CAA 2021). Similar to the March 2020 CARES Act, several temporary changes to the Bankruptcy Code are included in Title X of the CAA 2021. Below, we examine four of the CAA 2021’s most significant changes to consumer bankruptcy laws. These changes are temporary … Continue Reading

Top 10 Changes to Consumer Bankruptcy Proposed in the Consumer Bankruptcy Reform Act of 2020

On December 9, 2020, Congressional Democrats, including Elizabeth Warren (D-Mass.) and Jerrold Nadler (D-N.Y.), proposed sweeping legislation that would overhaul consumer bankruptcy law. The proposed changes generally make it easier for consumers to access the bankruptcy system and discharge their debts. Below is a discussion of 10 critical changes proposed in the Consumer Bankruptcy Reform … Continue Reading

Individuals Can Restructure Personal Guaranties of Defunct Business’s Debt in New Bankruptcy Subchapter V

Earlier this year, Chapter 11’s new Subchapter V became a part of the Bankruptcy Code when the Small Business Reorganization Act of 2019 (SBRA) became effective. Very shortly thereafter, the CARES Act expanded the debt limits for a business or individual to qualify as a debtor under the SBRA. In the wake of these new … Continue Reading

Eleventh Circuit Holds Plaintiffs Must Have Incurred Concrete Injury for Article III Standing to Sue under FDCPA

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from using “false, deceptive, or misleading representation[s]” in connection with collecting debts. If a debt collector violates the FDCPA, the debt collector may be liable in the amount of the actual damages incurred by a debtor resulting from the FDCPA violation. Further, additional … Continue Reading

Pre-Bankruptcy Automatic Stay Waivers – More Valuable Than Ever These Days?

In the very unusual period in which we find ourselves today, it seems to be common wisdom that an avalanche of commercial loan defaults is coming. As such, it is a good time to take a fresh look at the terms and provisions used in commercial workout documents, whether in a simple agreement that extends … Continue Reading

Individual Employs New Small Business Bankruptcy Law to Modify Mortgage

Small businesses often struggle to reorganize in bankruptcy. To address this issue, Congress passed the Small Business Reorganization Act of 2019 (the SBRA). The SBRA took effect in February 2020 and makes small business bankruptcies faster and less expensive. The recent case of In re Ventura, 2020 WL 1867898 (E.D.N.Y. Apr. 10, 2020) addresses many … Continue Reading

Supreme Court Holds That an Order on a Motion for Relief from Stay Is a Final, Appealable Order

In a unanimous opinion released last week, the Supreme Court provided guidance as to how to determine the finality of an order in a bankruptcy case for purposes of an appeal under 28 U.S.C. § 158(a). The Court held that the adjudication of a creditor’s motion for relief from stay is properly considered a discrete … Continue Reading

The Split Widens: Third Circuit Joins Minority View Regarding Whether Secured Creditor Has Affirmative Obligation to Return Collateral to Debtor Upon Bankruptcy Filing

The circuit courts continue to wrestle over the duties imposed by the Bankruptcy Code’s automatic stay on creditors concerning turnover of a debtor’s impounded vehicle. Is a creditor required to automatically turn over the vehicle as soon as the bankruptcy petition is filed, or can it retain possession while awaiting an order of the bankruptcy … Continue Reading

The Small Business Reorganization Act – A New Subchapter for Small Businesses

Since the 2005 amendments to the Bankruptcy Code, small business debtors have continued to struggle to reorganize effectively under Chapter 11 of the Bankruptcy Code. On Friday, August 23, 2019, President Trump signed the Small Business Reorganization Act of 2019 into law in an effort to address some of these issues. The act aims to … Continue Reading

The Family Farmer Relief Act of 2019: Will the Increased Debt Limit Lead to an Uptick in Chapter 12 Filings?

The United States Senate passed the “Family Farmer Relief Act of 2019” (H.R. 2336), which substantially increases the debt limit for agricultural producers seeking to file for relief under Chapter 12 of the United States Bankruptcy Code. The bipartisan legislation, which passed the U.S. House of Representatives in June and is expected to be signed … Continue Reading

The ABI Commission’s Final Report on Consumer Bankruptcy Issues: What Mortgage Creditors Need to Know

We previously provided you with some of the American Bankruptcy Institute’s Commission on Consumer Bankruptcy’s recommendations to improve the consumer bankruptcy system. As the commission noted, changes in bankruptcy law occur slowly. The last major amendments to the Bankruptcy Code were in 2005, and the last major amendments to the Bankruptcy Rules were in 2011. … Continue Reading
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