- Learn About Your Client and the Debtor.
Before you accept a collection case, make sure you know your client’s business and the debtor’s business.
Prior to the 1984 Amendments to the Bankruptcy Code1 (BAFJA), there was a split as to whether a transfer of title to real estate by virtue of a mortgage foreclosure constituted a transfer as defined in §101 of the Bankruptcy Code.2, 3 However, BAFJA made it clear that a “transfer” included “the foreclosure of a debtor’s equity of redemption.”4 This change in definition has a significant impact on the application of both §547 (preference) and §548 (fraudulent transfer).
The second priority lien held by a junior lien holder is a property interest sufficient to trigger the protection of the automatic stay.In re Three Strokes L.P., 379 B.R. 804 (Bankr. N.D. Tex. 2008). Inasmuch as a senior lien holder’s foreclosure proceedings would have the effect of extinguishing the debtor’s second lien interest, a court may only lift the stay and permit the foreclosure to proceed upon such senior lien holder’s showing of adequate protection.
In the fallout of recent commercial mortgage-backed securities defaults, mortgage servicers have increasingly used receivership sales for commercial real estate assets, including last month’s sale of the Davis Building in downtown Dallas.
First State Bank of Red Bud v. Official Committee of Unsecured Creditors (In re Schaffer), No. 10-198- GPM, 2011 WL 1118666 (S.D. Ill. March 28, 2011)
CASE SNAPSHOT
In re Ebadi, No. 10-73702, 2011 WL 1257211 (Bankr. E.D.N.Y. March 30, 2011)
CASE SNAPSHOT
In re Olde Prairie Block Owner, LLC, Bankr. No. 10B22668 (Bankr. N.D. Ill. March 11, 2011)
CASE SNAPSHOT
Upon the filing of a bankruptcy petition, an automatic stay goes into effect which provides a debtor with immediate protection from collection efforts by creditors. But the automatic stay is not without limitations.
Field v. Bank of America, N.A. (In re Gibbs), 522 B.R. 282 (Bankr. D. Hawaii 2014) –
A bankruptcy trustee sued a mortgage lender to recover for defects in a prepetition non-judicial foreclosure sale. The lender brought a motion to dismiss for failure to state a claim. The primary focus of the court was on claims under the state Unfair and Deceptive Acts or Trade Practices (UDAP) law.
“A boy’s best friend is his mother.” – Norman Bates
“Let’s have a family gathering for the remaining family members who still speak to each other” – Someecards, Inc.