The U.S. Court of Appeals for the Eleventh Circuit recently held that a mortgage loan with a post-plan maturity date was not discharged in a Chapter 13 bankruptcy because the plan did not “provide for” the debt and modify the repayment terms of the mortgage.

The Eleventh Circuit also held that the debt was not discharged because discharge would violate 11 U.S.C. § 1322(b)(2)’s anti-modification provision for mortgages secured by the debtor’s principal residence.

• A bankruptcy court in Ohio recently applied the incorrect statute of limitations in a mortgage foreclosure action.
• Ohio’s statute of limitations jurisprudence has evolved from an accepted legal proposition derived from one opinion to supposedly well-settled law stating the complete opposite in another opinion.
• Federal courts interpreting Ohio law must apply the correct statute of limitations to mortgage foreclosure actions.

In the bankruptcy case of In re Fisher, 584 B.R. 185, 199–200 (N.D. Ohio Bankr.

The purpose of bankruptcy is twofold: (1) to provide the party filing for bankruptcy—the “debtor”—with a fresh start, and (2) to fairly distribute the debtor’s non-exempt assets to creditors in accordance with the priority scheme set forth in the U.S. Bankruptcy Code. This may sound relatively simple, but accomplishing these dual objectives can be difficult. One of the challenges in all bankruptcy cases is determining the scope and extent of assets that constitute “property of the estate” which are available for distribution to creditors.

The U.S. Court of Appeals for the Eleventh Circuit recently rejected an attempt by homeowners to collaterally attack a state court mortgage foreclosure judgment, affirming the trial court’s dismissal of an amended complaint with prejudice for failure to state a claim, but on alternative grounds.

The U.S. Court of Appeals for the Eleventh Circuit held that 12 U.S.C. § 1715z-20(j) did not alter or limit the lender’s right to foreclose under the terms of the valid reverse mortgage contract where the non-borrower spouse was still living in the home.

Accordingly, the Eleventh Circuit affirmed the trial court’s dismissal of the plaintiff’s petition for injunctive relief to prevent the foreclosure sale.

The purpose of bankruptcy is to provide for an orderly process by which a debtor’s assets can be fairly divided and distributed among creditors.

It is also meant to ensure that debtors can start fresh. Not all of a debtor’s assets are available to creditors—the Bankruptcy Code allows a debtor to keep certain assets safe in bankruptcy through various asset exemptions available under both state and federal law. One such exemption is Michigan’s bankruptcy-specific homestead exemption.

The U.S. Court of Appeals for the Fifth Circuit recently held that a mortgagee’s foreclosure action did not violate an automatic stay imposed during one of the plaintiff’s chapter 13 bankruptcy schedules, where the debtor failed to amend his bankruptcy schedules to disclose his recent acquisition of the subject property from his son.

In so ruling, the Fifth Circuit affirmed the trial court’s judgment in favor of the mortgagee because father and son plaintiffs were judicially estopped from claiming a stay violation.

The U.S. Court of Appeals for the Sixth Circuit recently held that a debtor’s claim seeking to use a bankruptcy trustee’s § 544(a) strong-arm power to avoid a mortgage on the ground that it was never perfected did not require appellate review of the state court foreclosure judgment, and therefore was not barred by the Rooker-Feldman doctrine.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently applied the “conceivable effect” test in holding that a bankruptcy court lacked jurisdiction over a state law fraud claim raised by a third party regarding the validity of a lender’s lien, and therefore, declined to consider the issue on appeal.

In so ruling, the Panel ruled that the state law fraud claim did not invoke “arising under” or “arising in” jurisdiction of the bankruptcy court because the state law fraud claim was not created or determined by the Bankruptcy Code, and could exist outside of bankruptcy.

On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code.

Background Facts