In a comprehensive report issued last week, the American Bankruptcy Institute Commission on Consumer Bankruptcy proposed recommendations that would allow student loans to be easier to discharge in bankruptcy, citing the staggering $1.5 trillion in student loan debt held in the United States and the current difficulties with discharging this type of debt in bankruptcy.

Fifth Circuit finds that make-whole premiums should be considered unmatured interest subject to disallowance under Section 502(b)(2) of the Bankruptcy Code to the extent designed to compensate for future interest payments.

Overview

Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims.

When entering into secured transactions, most secured lenders long assumed that, even in a bankruptcy, their borrowers would not be able to sell encumbered assets free and clear of the lenders’ liens without the lenders’ consent or, without at least providing the lenders the opportunity to bid their secured debt at an auction.