|Webinar: Why you should care about the CARES Act
May 20, 2020 at Noon
The Tampa Bay Bankruptcy Bar Association will be hosting a FREE Webinar via Zoom on May 20, 2020 from 12:00 to 1:30pm. Why you should care about the CARES Act and its impact on Student Loans, Foreclosure, Collection, and Consumer and Business Bankruptcy. Christie Arkovich, Jake Blanchard, Nicole Mariani Noel and Chapter 13 Trustee, Kelly Remick, will discuss provisions of the stimulus bill that expand or create options for Debtors in Chapter 13 cases as well as Small Business Debtors under Subchapter V and many more. Panelists will also discuss foreclosure, forbearance, collection and student loan impacts. No cost to attend. This will be a live webinar and will not be recorded. Register here.
Couldn’t come at a better time now that things are hoppin’ a bit more! I encourage our colleagues to register for local insight to help represent our clients the best we can in these trying times
I just found an eye opening video by Gary Fraley, a certified bankruptcy attorney in California, on why debt relief companies should be avoided!
Watch the video – it’s short, to the point, and there’s a cool saddle in the back ground — looks like a former Texas transplant to California. I kept looking for a cowboy hat, but that’s probably in his Ford truck hung on the rifle rack. Okay, I may have been watching too many Ranches on Netflix lately!
The federal Bankruptcy Code defines consumer debt as debt incurred by an individual “primarily for a personal, family, or household purpose.” … The court may classify student loans as either consumer debt or non-consumer debt.
Some courts, like the court in In re Gentri, 185 B.R. 368, 373 (Bankr. M.D. Fla. 1995), assume that student loans are consumer debts, but do not analyze, whether student loans are “consumer debts.” See In re Dickerson, 193 B.R. 67, 70 (Bankr. M.D. Fla. 1996); In re Chapman, 146 B.R. 411, 416 (Bankr. N.D. Ill. 1992).
The FCRA requires that “[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. Section 1681e(b).
That’s a high burden “maximum possible accuracy”! And it is not being met. In one over the top case of ours, despite a client providing proof of life, she was reported as deceased by her student loan servicer over and over again wrecking havoc on her credit report.
More typically we run into instances where student loans are incorrectly reported as being in default when in fact they are no longer owed due to a settlement or discharge in bankruptcy. This in fact is becoming our bread and butter raising these types of claims.
Filing bankruptcy for small businesses just got a whole lot easier! The Small Business Reorganization Act of 2019 takes effect on February 19, 2020. Some of the new features are that it adds a new subchapter V to Chapter 11 of the Bankruptcy Code which is good for small business bankruptcies because:
- There are no quarterly trustee fees;
- There is no absolute priority rule;
Orlando Bankruptcy Judge Jennemann’s ruling to discharge taxes was just affirmed in Mass. Dept. of Rev. v. Shek, Case #18-14922 (11th Cir. Jan. 23, 2020). Several Circuits around the country including the 1st, 5th and 10th hold that tax debts for late filed returns can never be discharged. The 11th Circuit joined the 4th, 6th, 7th and 10th Circuits in favor of discharging this debt. As you can see it can make a big difference where you live, as this is a pretty even split among the country’s Circuit Courts.
The Court found this definition fit best under Section 523(a)(1)(B)(ii) which implies that a tax debt can be discharged if there is a delay of at least 2 years between the filing of the return and the filing of the bankruptcy. This would essentially give the IRS two years to collect on this debt, before a debtor could discharge the tax in bankruptcy.
While we are not tax attorneys, we consult with tax attorneys whenever necessary, for the best results in bankruptcy for our clients. I spoke with a potential client this week who was unaware that nearly $50,000 in past due taxes, interest and penalties could be discharged in full provided certain tests and timelines were met. This can be a valuable tool to reset someone’s financial lives to move forward.
Are you looking down the barrel of an arbitration clause in your consumer/creditor agreement? I’ve posted before (Arbitration Clauses in Consumer Contracts – How to Avoid Being Thrown out of Court) on some local case law here in Florida to help avoid arbitration clauses – but here’s a new case in the consumer’s favor in Bankruptcy Court for the Middle District of Florida.
The Bankruptcy Court ruled that an arbitration clause did not constrain the court’s contempt powers, “[w]ords in a consumer agreement cannot deprive the bankruptcy court of the inherent power to enforce compliance with an injunction.” Verizon Wireless Personal Communications, LP v. Bateman, No. 14-5369, Adv. Pro. No. 18-1394 (M.D. Fla. Sept. 24, 2019).
So if you’re in bankruptcy, or had a previously filed one that you can reopen (without a filing fee), challenge the arbitration clause in bankruptcy – you may be much more likely to win!
This is a pretty cool map that shows the southeastern U.S. as ground zero for the student loan crisis. Most all of Florida shows this to be a High, Very High or Extremely High debt level according to this map.
I’m glad our bankruptcy court for the Middle District of Florida is taking this very important step to implement a new Student Loan Management Program for all debtors in Tampa, Orlando, Jacksonville and Ocala – and surrounding areas in between. The program goes live on October 1 — and anyone who is a debtor in a pending case is eligible for this relief, as well as all future debtors!
Please reach out to us if you want to know more about the student loan program now being offered by our bankruptcy court. We are also available to co-counsel on any cases with bankruptcy counsel who may be unfamiliar with the options available under this program.