Recent court filings highlight the need for health care providers to protect patient privacy by implementing specific procedures when filing claims in bankruptcy cases of their patients, as a matter of federal bankruptcy and other law. Last year, WakeMed, a Raleigh, North Carolina-based health care system, asserted a claim for $553.00 for unpaid medical services in a chapter 13 consumer bankruptcy case.

To the extent authorized by a State, Chapter 9 of the Bankruptcy Code allows municipalities (defined as a “political subdivision or public agency or instrumentality”) of that State – including public hospitals – to reorganize their debts in the face of insolvency. Municipalities achieve this goal through implementation of a court-approved plan of adjustment. Although the standards for confirming (approving) a Chapter 9 plan resemble the well-established standards for confirming a Chapter 11 plan, differences exist.

Working with distressed businesses always presents a wide array of challenges. Solving a distressed company’s problems, or your problems with it, rarely is limited to a single legal discipline, set of laws or state or federal policy. When a distressed enterprise is involved, all kinds of interests and policies can and do clash.

Several of the Official Bankruptcy Forms will be replaced on December 1, 2015. For creditors, the most notable changes will be to two forms: the Proof of Claim form, Form 410, and the Mortgage Proof of Claim Attachment, Form 410A. These changes reflect an effort by the Bankruptcy Courts to elicit a clear and complete picture of what the debtor owes and how much must be paid to cure a pre-bankruptcy arrearage. Due to the Bankruptcy Court’s focus on clarity, creditors are well advised to closely follow the claim forms and accompanying instructions.

The Indiana Court of Appeals recently held that creditors must move for an in personam remedy in the original foreclosure judgment or forfeit their right to collect deficiency funds. In Elliott v. Dyck O’Neal, the bank foreclosed upon a borrower’s residence, and sought judgment against the borrowers for the full amount of the outstanding balance in the complaint. The motion for default judgment, and accompanying order, however, only sought an order in rem for the outstanding debt—omitting any mention of an in personam remedy.

Be careful what you’ve promised your customers…or what has been promised about data you buy!

Trade creditors often face the issue of whether they are required to continue providing goods or services on credit to a customer that has filed chapter 11 bankruptcy. Unfortunately, the Bankruptcy Code fails to specifically address the rights and obligations of a trade creditor facing this dilemma, resulting in a tug-of-war created by the debtor’s need for continued goods and services and the creditor’s need for assurance of payment.

Your tenant files for bankruptcy-what’s your move? Debtors who are lessees under real property leases have certain rights regarding their lease under § 365 of the Bankruptcy Code. Essentially, the debtor has two options: 1) reject the lease or 2) assume the lease, provided that the debtor can cure any defaults existing under the lease. Additionally, the debtor may have the right to assume and assign the lease to a third party.

Following up on our coverage in the recent U.S. Supreme Court ruling that a debtor in a Chapter 7 case cannot ‘strip off’ or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code, I had the opportunity to discuss the ruling with Colin O’Keefe of LXBN TV.

This morning, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by senior mortgages—are completely underwater.