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It’s Football Season Again: Georgia’s Setback on Titlebacks

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  In previous blog posts I’ve discussed decisions from the 11th Circuit Court of Appeals (covering Alabama, Georgia and Florida…all the best SEC teams) on the ability to deal with motor vehicle title pawns in bankruptcy.   You can view the prior posts here and here .   Last year, interpreting Alabama law, the 11th Circuit ruled that a vehicle owner who filed bankruptcy before the expiration of the title pawn redemption could use Chapter 13 bankruptcy to modify the pawnholder’s rights and pay the loan back over time.   If you’re new to the concept, a title pawn allows you to obtain cash, in the form of a high-interest loan, by pawning your motor vehicle title.   If you do not repay the loan and interest by the end of the agreed time – usually a 30-day “redemption period” followed by a 30-day “grace period,” – ownership of the vehicle passes to the title pawn company.   For many years, bankruptcy was an option that consumers could use to hang onto their vehicles by repaying title pawn
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Don't Do That (Part 2)

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  Part 1 of this three-part series focused on mistakes a debtor in bankruptcy could make with respect to property transfers.  Today we focus on one of the most common, and serious, creditor mistakes: Violation of the “automatic stay.” An injunction is an order issued by a Judge that directs someone to do or (more often) stop doing something immediately.   The two things most people know about injunctions are: (1) they aren’t easy to get, and (2) they should be taken seriously.   It’s the – just for fun let’s call it the “injunction function” – that allows the bankruptcy system to work.   A main goal of the bankruptcy system is to allow an orderly procedure, and an orderly procedure isn’t possible if creditors engage in a “free for all” as they compete to dismantle a debtor’s assets.   Whenever a bankruptcy case is filed, the Bankruptcy Code provides for a stay of most types of creditor collection activity.   And this stay happens automatically, making it a special sort of injunctio
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  Don’t Do That!   (Part 1)   Panic is a normal reaction when a creditor threatens legal action to collect a debt.   If your house or car is paid off, or you have a large amount of cash in your bank account, those assets could be especially vulnerable to creditor collection activity.   The Bankruptcy Code, and every U.S. state, has a series of “exemptions,” a dollar-amount limit on the value of assets that will be protected from creditors.   If the value of your assets exceed the amount of those exemptions, they might be at risk.   (Here’s a quick example: Assume you own a home valued at $150,000, with no mortgage.   Your state allows a $43,000 “exemption” in your homestead.   A creditor or bankruptcy trustee could force the sale of your home, pay you the first $43,000 in proceeds, and use the rest to pay your creditors!)   Bankruptcy can often protect assets when their value exceeds the exemption limit, but that usually requires the ability to use future income to pay the value
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It's Football Season: Let's Talk Title-Backs!!!

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11th Circuit decision gives hope to some consumers struggling with vehicle title pawns As discussed in detail in a previous blog entry , a 2017 decision by the 11th Circuit Court of Appeals (the Federal Circuit covering Alabama, Georgia and Florida…and all of the good SEC teams) made it difficult or impossible to use Chapter 13 bankruptcy to deal with motor vehicle title pawns.   The 2017 Northington case held that if a bankruptcy case is filed after the “redemption period” on the title pawn has expired (usually a 60-day period), then any ownership interest the borrower/pledgor had in his or her motor vehicle was automatically extinguished.   That meant the title pawn company no longer held a claim that could be addressed in bankruptcy – instead, the company owned the vehicle itself!   The Northington case means that once the redemption period expires, a Chapter 13 bankruptcy plan cannot be used to pay the title pawn loan over time as can be done with most other types of short-te
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"What happens if a creditor rejects my bankruptcy case?"

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The bankruptcy process can devolve into a complicated series of forms, procedures, hearings and deadlines.  The average American consumer is as likely to know the basic rules of cricket, be able to list all of the Marvel movies in chronological order, or sing the words to Auld Lang Syne, than to have a working knowledge of how the bankruptcy system works.  So it's not surprising that clients will frequently ask: "When will I know whether or not my creditors rejected my bankruptcy case?"   The short answer is this: Creditors do not get to "reject" your bankruptcy case, and creditors cannot unilaterally deny bankruptcy relief to anyone.    Bankruptcy laws are contained in the United States Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.  This is federal law, which means bankruptcy cases are administered in the federal court system.  Each federal judicial district has one or more appointed Bankruptcy Judge.  Other professionals, called Trustees, ar
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  13 Halloween Movies With Bankruptcy Themes Consumers waiting on student loan relief and a second stimulus package? Can we all agree that Halloween is the holiday with the best collection of movies?   Perhaps due to plots which often focus on personal choices and challenges amidst unusual tension, many horror movies put me in mind of issues frequently encountered in consumer bankruptcy cases.   Here are 13 for your consideration: A Nightmare on Elm Street ­­– During the COVID-19 pandemic many mortgage companies have suspended monthly payments. This has been a welcome respite for many homeowners facing unemployment or reduced income.   However, the payment suspension will not be indefinite.   In many cases the suspended payments will be coming due in full at the end of the suspension period.   Homeowners who are not able to make the payments will be in default under the loan documents when the forbearance periods end and could face foreclosure.   A widespread housing crisis is a nigh
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  TWO COURSES AND NO DESSERT   Bankruptcy Credit Counseling Rules Can Be Way Too Danged Confusing! Photo credit: Man Dy, Pexels.com A consumer bankruptcy filing involves a flood of forms, papers and procedures.  To the uninitiated, it can be difficult to understand why each of these components is important, or if they have an actual purpose.  After filing a bankruptcy case your mailbox will have fewer bills, but you’ll instead get notices about hearings and meetings, objections to one thing, and notice of requirements to do another thing.   Some of these items are from lawyers – either yours or someone else’s – and others could be from the Trustee or Clerk of the Bankruptcy Court.   The Bankruptcy Court Clerk will probably send you something called a “NOTICE OF REQUIRMENT TO FILE A CERTIFICATION ABOUT A PERSONAL FINANCIAL MANAGEMENT COURSE (Official Form 423).”   That sounds an awful lot like the “credit counseling” that you did before you filed your bankruptcy case.   You coul
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