For the third time in less than two years, the Eleventh Circuit Court of Appeals has ruled that a chapter 7 debtor who does not reaffirm secured debt or redeem the property must surrender the property. In re Woide, No. 17-10776 (11th Cir. Apr. 5, 2018).
In Woide, the debtors filed a chapter 13 bankruptcy petition, and on schedule A, listed their real property and stated "to be surrendered." The case was later converted from chapter 13 to 7, and the debtors did not file any statement of intention with respect to the property. After the close of the debtors' bankruptcy case, the secured creditor ...
In Midland Funding, LLC v. Johnson, No. 16-348 (May 15, 2017), the U.S. Supreme Court held that a debt collector does not run afoul of the FDCPA by filing a proof of claim in bankruptcy on a stale debt. In its 5-3 decision, the Court sided with the majority of the federal courts of appeals to have considered the issue and reversed the Eleventh Circuit Court of Appeals, which had held that filing a proof of claim on a debt for which the statute of limitations had expired amounted to a "false," "deceptive," "misleading," "unconscionable," and "unfair" means of debt collection.
The case arose ...
On October 4, 2016, the Eleventh Circuit Court of Appeals ruled that chapter 7 debtors who file a statement of intention to surrender real property in bankruptcy cannot later contest a foreclosure action, and bankruptcy courts have broad power and authority to sanction violations. Failla v. CitiBank, N.A., case no. 15-15626 (11th Cir. October 4, 2016). The bankruptcy court in Failla reopened a chapter 7 bankruptcy case several years after entry of discharge and ordered the debtors to cease their defense of the bank's foreclosure action, threatening to vacate the discharge order for ...
Learning the interplay between state rules of judicial procedure and federal bankruptcy law can be a daunting undertaking, but the pitfalls of failing to do so can be severe. A recent example of the importance of being mindful of these issues is Hewett v. Wells Fargo Bank, N.A. as Trustee, No. 2D15-1074, 2016 WL 3065014 (Fla. 2d DCA June 1, 2016) where the filing of a bankruptcy petition ultimately cost a foreclosure defendant his right to appeal a final judgment of foreclosure.
The Second DCA summarized the procedural posture of the case as follows:
"The circuit court's final judgment of ...
In Castellanos v. Midland Funding, LLC, 15-CV-559 (M.D. Fla. Jan. 4, 2016) the United States District Judge John Steele joined with several of his Middle District of Florida colleagues and held that the Bankruptcy Code preempts the FDCPA with respect to filing time-barred proofs of claim. In Crawford v. LVNV Funding, LLC, the Eleventh Circuit held that filing a time-barred proof of claim in bankruptcy court violated the FDCPA. 758 F.3d 1254, 1262 (11th Cir. 2014) cert. denied, 135 S. Ct. 1844 (2015). To the contrary, the Bankruptcy Code permits creditors to file proofs of claim without ...
In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit Court of Appeals examined whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt Collection Practices Act ("FDCPA"), as opposed to seeking relief in the bankruptcy court. During her bankruptcy, the debtor paid the arrears on her mortgage, and agreed to make monthly payments to forestall foreclosure. After receiving her discharge, the debtor ceased making payments. Within months her arrearage totaled over six thousand dollars. The lender ...
On November 23, 2015, in the first appellate decision of its kind, the District Court for the Southern District of Florida affirmed a bankruptcy court order to compel chapter 7 debtors to surrender real property by directing the debtors to cease all foreclosure defense. The decision in Failla v. Citibank, N.A. (In re Failla), case no. 15-80328, marks the first decision from a federal appellate court to address the question of whether a bankruptcy court may enter an order directing a debtor to cease defending a mortgage foreclosure suit pending in state court. On December 19, 2014, Judge ...
In Jenkins v. Midland Credit Management, Inc.,[1] the U.S. Bankruptcy Court for the Northern District of Alabama held that the filing of a proof of claim based on a time-barred debt cannot give rise to a claim for damages under the Fair Debt Collection Practices Act ("FDCPA"), reasoning that any such claim is precluded by the Bankruptcy Code's comprehensive claims-allowance procedure. The court further held that the filing of a proof of claim on a stale debt does not merit sanctions under Bankruptcy Rule 9011 where the proof of claim is filed in compliance with the Code. Accordingly, the ...
In Crawford v. LVNV Funding, LLC, the Eleventh Circuit became the first federal circuit court of appeals to hold that filing a proof of claim on a time-barred debt in a bankruptcy case violates the Fair Debt Collection Practices Act ("FDCPA").[1] See No. 13-12389,__ F.3d __, 2014 WL 3361226 (11th Cir. July 10, 2014). The case arose when LVNV filed a proof of claim in Crawford's bankruptcy case on a debt for which the statute of limitations had expired. In response, Crawford filed an adversary proceeding against LVNV, alleging that LVNV routinely filed proofs of claim on time-barred debts ...
Chief Judge Karen S. Jennemann of the United States Bankruptcy Court for the Middle District of Florida, Orlando Division recently held in a soon-to-be published opinion that chapter 7 debtors who state an intention to surrender real property to the mortgagee must perform on that intention by not impeding or interfering with the state court foreclosure process. In the case, In re Plummer, - B.R. -, 2014 WL 1248039 (Bankr. M.D. Fla. March 25, 2014), the Bankruptcy Court also held that, while the statute is not a mere notice provision, surrender does not require a debtor to take any ...
In Dzakula v. McHugh, No. 11-16404, 2013 WL 6483614 (9th Cir. Dec. 11, 2013), the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of an action on the ground of judicial estoppel where the plaintiff failed to identify the action as an asset on her bankruptcy schedules. The plaintiff did not amend the bankruptcy schedules until after the defendant filed a motion to dismiss, leading the court to infer that her omission had not been inadvertent. Distinguishing its recent decision Ah Quin v. County of Kauai Department of Transportation, 733 F.3d 267 (9th Cir. 2013), the ...
In Dang v. Bank of America, N.A., et al., 2013 WL 1683820 (D.Md. Apr. 17, 2013), the federal district court for the District of Maryland, on appeal of two orders from the United States Bankruptcy Court for the District of Maryland, found the bankruptcy court possessed jurisdiction and authority to dismiss Dang's claims against Bank of America and related entities in the adversary proceeding. Dang was familiar with the bankruptcy process. Between May 2009 and March 2010, she filed bankruptcy three times. Her bankruptcies originated with the execution of a promissory note and deed of ...