NCBRC REPORT
S
ince mid-2015, NCBRC has
been actively involved in cases
around the country, from the
U.S. Supreme Court to District Courts,
addressing issues of critical importance
to consumer debtors and their counsel.
In fact, just two months into the New
Year NCBRC has already filed four
amicus briefs on behalf of the NACBA
membership.
In the Supreme Court case of Husky
International Electric v. Ritz, No.
15-145, NACBA filed a brief urging
the Court to reject the creditor’s
proposed expansion of the definition
of “actual fraud” for purposes of
section 523(a)(2)(A)’s exception to
discharge. The trustee sought to reach
beyond the current standard of false
representations inducing the creditor
to enter into the transaction at issue,
and instead, find actual fraud based on
an unrelated constructively fraudulent
conveyance. NACBA argues in its
brief that “actual fraud” should not be
expanded to incorporate activities that
are not causally associated with the
debt at issue in the bankruptcy.
In VPSI, Inc. v. Padula, No. 15-2114 (4th
46
CONSUMER BANKRUPTCY JOURNAL
Cir.) and Jones v. Bob Evans Farms,
Inc., No. 15-2058 (8th Cir.), NACBA took
on the issue of whether a debtor must
amend his or her bankruptcy schedules
to reflect post-petition litigation. NACBA
argues that Bankruptcy Rule 1007 sets
forth the requirements for amending
bankruptcy schedules to bring in postpetition assets and that a legal action
that did not exist pre-petition and would
not bear fruit during the course of the
bankruptcy is not included in those
requirements. Unfortunately, the Jones
court recently took a hard line on the
issue and, without critical analysis,
found that the debtor was required to
report an employment discrimination
case that was filed post-petition. Padula
is still pending.
NACBA continues to get involved in
the issue of whether proofs of claims
based on time-barred debts constitute
independent FDCPA claims. In Nelson
v. Midland Credit Management, No.
15-2984 (8th Cir.) and Owens v. LVNV
Funding, Nos. 15-2044 (consol. 152082, 15-2109) (7th Cir.), NACBA
argues that the practice of knowingly
filing such proofs of claim violates
several provisions of the FDCPA
Spring 2016
and that the Bankruptcy Code does
not expressly or implicitly repeal the
FDCPA. This important issue is under
consideration in many courts around
the country.
Addressing another critical issue
among consumer debtors, that of
student loan debt, NCBRC filed an
amicus brief in the First Circuit on
behalf of the NACBA membership.
Murphy v. U.S. Dept. of Educ., No. 141691 (1st Cir.). NACBA argues that the
Brunner test, long applied by courts
examining the issue of undue hardship,
is unreasonably severe and is obsolete
in today’s student loan industry.
In an important win for debtors victimized
by criminal lenders hiding behind Native
American tribal arbitration clauses,
NACBA was instrumental in the Fourth
Circuit finding that such arbitration
clauses are not enforceable. Hayes v.
Delbert Services Corp. No. 15-1170 &
15-1217 (4th Cir. Feb. 2, 2016).
As always, these amicus briefs can be
found at www.NCBRC.org.
National Association of Consumer Bankruptcy Attorneys