Consumer Bankruptcy Journal Summer 2017 - Page 34

CASES IN REVIEW __________________________________________________________________ Cases in Review June, 2017 “Cases in Review” highlights recent cases that may be of particular interest to consumer bankruptcy practitioners. It is brought to you by Consumer Bankruptcy Abstracts & Research ( and the National Consumer Bankruptcy Rights Center ( Actions against mortgage creditor: A $400,000 punitive damages award against the Chapter 13 debtor's mortgage servicer for its "reprehensible" conduct in aggressively pursuing collection, following the debtor's discharge, of a nonexistent deficiency was supported by the evidence and was not constitutionally excessive. Evidence that the servicer acted with a reckless indifference to the debtor's rights was legally sufficient to establish the requisite mental state to support the punitive damages awarded by the jury on the debtor's claim of invasion of privacy, where the debtor contacted the servicer repeatedly to demand that it resolve the issues with her account, but rather than suspend its efforts, the servicer posted the debtor's home for foreclosure and conducted repeated inspections of her residence, and the debtor suffered physical ailments from the stress caused by the servicer's conduct. May v. Nationstar Mortgage, LLC, 852 F.3d 806 (8th Cir. March 29, 2017) (case no. 16-1285). Avoidable transfers—Preferential transfer under Code § 547: A debtor's wages cannot be transferred until they are earned. Thus, a creditor's collection of garnished wages earned during the 90-day preference period in Code § 547(b) is an avoidable transfer even if the garnishment was served prior to that period. In re Jackson, 850 F.3d 816 (5th Cir. March 13, 2017) (case no. 16-30274). Chapter 13—Allowance of attorney’s fees: Affirming In re Cripps, 549 B.R. 836 (Bankr. W.D. Mich., May 13, 2016), the district court held that, where the Chapter 13 debtors' attorney filed his final fee application after the Chapter 13 trustee had filed a notice of plan completion, the bankruptcy court did not err in concluding that the fees would be allowed, but not as an administrative expense, since there were no funds available to pay the award and it was too late to modify the debtors' plan. Nor did the bankruptcy court err in concluding that the fee award did not survive the ©National Consumer Bankruptcy Rights Center 34 CONSUMER BANKRUPTCY JOURNAL Summer 2017 National Association of Consumer Bankruptcy Attorneys