SCOTUS Update
a tuition credit agreement with a forprofit institution was not excepted from
discharge under section 523(a)(8)
(A)(ii). Institute of Imaginal Studies v.
Christoff, No. 14-1336 (B.A.P. 9th Cir.
March 27, 2015).
The appeal turned on the language of
section 523(a)(8)(A)(ii) excepting from
discharge, “an obligation to repay funds
received.” The court found that “funds
received” was not equivalent to “loans
received” as used elsewhere in section
523(a)(8). Christoff is currently on
appeal, No. 15-60026 (9th Cir.).
Fourth Circuit Addresses CashCall’s
Arbitration Clause
In a per curiam opinion, the Fourth
Circuit affirmed in part and reversed in
part a district court decision declining
to enforce CashCall’s arbitration clause
that any dispute under the agreement
would be resolved by arbitration
conducted by a representative of the
Cheyenne River Sioux Tribe applying
Indian Tribal law. Moses v. CashCall,
No. 14-1195 (4th Cir. March 16, 2015).
Ultimately, the court found that Moses’
complaint for declaratory judgment
that the underlying debt agreement
was illegal and therefore void was not
appropriately subject to tribal arbitration
but that Moses’ damages claim based
on the state Fair Debt Collection laws
was. Judge Davis dissented overall
on the basis that the bankruptcy court
should have permitted CashCall to
moot the entire conflict by withdrawing
its proof of claim. NACBA filed an
amicus brief in support of the debtor in
this case.
McCoy Marches On
The First Circuit agreed with McCoy v.
Miss. State Tax Comm’n, 666 F.3d 924
(5th Cir. 2012), that an instruction in the
state tax filing law with respect to the
time for filing a return is an “applicable
filing requirement,” within the meaning
of the hanging paragraph to section
523(a), thereby rendering a return filed
outside that time nondischargeable
unless filed in cooperation with the
IRS under IRC section 6020(a).
Fahey v. Mass. Dept. of Rev., No.
14-1328; Perkins v. Mass Dept. of
Rev., No. 14-1350, Gonzalez v. Mass.
Dept. of Rev. No. 14-9002; Brown
v. Mass. Dept. of Rev. No. 14-9003
(February 18, 2015). The Tenth Circuit
reached a similar conclusion in In re
Mallo, 2014 WL 7360130 (10th Cir.
Dec. 29, 2014).
avoidable under 548(a)(1)(B) as a
constructively
fraudulent
transfer.
Result: Pending
Lump Sum Rollover from IRA to
Annuity Not “Premium”
In re New Century TRS Holdings, No.
14-3923 (3rd Cir.)
The Eighth Circuit found that the debtor’s
individual retirement annuity funded by
a lump sum rollover contribution from
his IRA was properly exempted from
his chapter 7 bankruptcy estate under
section 522(b)(3)(C). Running v. Miller
(In re Miller), No. 13-3682 (8th Cir. Feb.
13, 2015). The court found that the
funding of the IRA did not violate either
the requirement that the premiums not
be fixed or that the annual premium not
exceed the amount specified in section
219(b)(1)(A) of the IRC. Because
the initial rollover contribution was
not a “premium” within the meaning
of the relevant sections of the IRC,
the debtor’s annuity was properly
exempted from his bankruptcy estate.
NACBA filed an amicus brief in support
of the debtor in this case.
Date:
March
20,
2015
Description:
Whether
borrowers
received
adequate
notice
of
company
bankruptcy to
allow
them to file timely proofs of claim.
Result: Pending
NACBA Amicus Activity:
Date:
January
15,
2015
Description: Whether, under section
109(e), the amount remaining due on a
promissory note secured by a mortgage
which is in excess of the value of the
property securing that note must be
included as a “debt” which is “owed,”
where the borrower has previously
obtained a chapter 7 discharge.
Result: Judgment affirmed, April 27,
2015
NCBRC has been active in filing amicus
briefs in a number of important cases
on behalf of the NACBA membership,
including:
Smith v. SIPI, LLC, No. 15-1166 (7th
Cir.)
Date:
May
7,
2015
Description:
Whether
Chapter
13 debtors received reasonably
equivalent value for property sold at
a tax sale conducted in accordance
with Illinois law, so that sale was not
National Association of Consumer Bankruptcy Attorneys
Summer 2015
Heritage Bank v. Woodward, No. 156001 (B.A.P. 8th Cir.)
Date: May 12, 2015
Description: Whether absolute priority
rule applies to individual debtors in
chapter 11.
Result: Pending
Charbono v. Sumski, No. 14-2151
(1st Cir.)
Date:
February
25,
2015
Description:
Whether
bankruptcy
court had authority to impose a
monetary sanction on the chapter
13 debtor for failure to provide
copy of his request for extension
of time for filing federal tax return.
Result: Pending
In re Fitzgerald, No. 14-2349 (4th Cir.)
CONSUMER BANKRUPTCY JOURNAL
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