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Consumer Bankruptcy Law and Practice: 15.5.1.5 Enforcing the Discharge Injunction

Violation of the discharge injunction is usually contempt, punishable by awards of damages, including emotional distress and punitive damages in certain cases, and attorney fees.807 However, an award of damages and other relief against a governmental unit will be limited by section 106(a).808 If the violation is asserted against the Internal Revenue Service, the debtor may have to exhaust administrative remedies prior to seeking judicial relief.809

Consumer Bankruptcy Law and Practice: 18.7.4.1 Generally

When a chapter 11 case is filed, the debtor ordinarily remains in control of the business as a “debtor in possession.”559 Section 1104(a), however, authorizes the court in some circumstances to appoint a trustee to take over and manage the debtor’s affairs.560 This provision gives consumers powerful leverage against businesses that are mismanaged after filing under chapter 11.

Consumer Bankruptcy Law and Practice: 18.7.12 Special Provisions Applicable to Small Business Bankruptcies

The 2005 amendments established new procedures and modified some existing standards applicable to chapter 11 cases involving small businesses.711 Debtors who meet the statutory definition of a “small business” can no longer opt out of coverage under the small business provisions.712 The amendments establish expedited proceedings in certain areas and mandate new reporting requirements at various stages of the case.

Consumer Bankruptcy Law and Practice: 18.7.15.3.2 Right to intervene

Section 1109(b) states that “[a] party in interest . . . may raise and may appear and be heard on any issue in a case under this chapter.”838 Creditors, such as employees with wage or benefit claims, are specifically authorized under section 1109 to be heard.839 A more difficult question is whether non-creditor employees, laid-off employees and representatives of the local community have a sufficient interest to justify intervention.

Home Foreclosures: 10.8.1.1 Overview

State and local laws generally govern the rights of tenants in foreclosed properties. However, the Protecting Tenants at Foreclosure Act, federal protections for Section 8 tenants, and regulations and guidance that govern FHA-insured loans and Fannie Mae and Freddie Mac owned loans may provide additional protections or benefits. During the COVID-19 pandemic, federal, state, and local governments increased protections for tenants and homeowners by issuing moratoria on evictions and foreclosures, and providing rental assistance for those who had fallen behind.

Consumer Bankruptcy Law and Practice: 18.5.1 Overview

Unsecured creditors without priority claims are in the worst position of all creditors in a bankruptcy proceeding. Only in the rarest instance will they receive the full amount of their claim. In most chapter 7 cases, they will receive nothing. Without aggressive advocacy, this may be true even if the consumer creditors were victims of egregious fraud.183

Consumer Bankruptcy Law and Practice: 18.5.4.2.3a The bankruptcy court’s entry of judgment for unliquidated claims

If the debt owed to the consumer is unliquidated, the bankruptcy court may have jurisdiction not only to find the debt nondischargeable, but also to liquidate the debt and enter judgment.355 For example, the bankruptcy court may enter a judgment for the creditor on a UDAP claim at the same time it declares the debt nondischargeable as arising from the debtor’s fraudulent conduct under section 523(a)(2) or misappropriation of funds under section 523(a)(6).356 There are limited instances when a sp

Consumer Bankruptcy Law and Practice: 18.5.4.2.3a The bankruptcy court’s entry of judgment for unliquidated claims

If the debt owed to the consumer is unliquidated, the bankruptcy court may have jurisdiction not only to find the debt nondischargeable, but also to liquidate the debt and enter judgment.355 For example, the bankruptcy court may enter a judgment for the creditor on a UDAP claim at the same time it declares the debt nondischargeable as arising from the debtor’s fraudulent conduct under section 523(a)(2) or misappropriation of funds under section 523(a)(6).356 There are limited instances when a sp

Consumer Bankruptcy Law and Practice: 18.5.4.2.3a The bankruptcy court’s entry of judgment for unliquidated claims

If the debt owed to the consumer is unliquidated, the bankruptcy court may have jurisdiction not only to find the debt nondischargeable, but also to liquidate the debt and enter judgment.355 For example, the bankruptcy court may enter a judgment for the creditor on a UDAP claim at the same time it declares the debt nondischargeable as arising from the debtor’s fraudulent conduct under section 523(a)(2) or misappropriation of funds under section 523(a)(6).356 There are limited instances when a sp

Fair Credit Reporting: 7.1.1 Overview

One of the primary reasons for enactment of the Fair Credit Reporting Act (FCRA) was protection of confidential information and individual privacy.1 When Senator Proxmire first introduced S. 823, the bill which ultimately became the Fair Credit Reporting Act, he stressed the importance of assuring confidentiality:

Fair Credit Reporting: 7.1.2.2 The “Reason to Believe” Standard

In general, a consumer reporting agency (CRA) may release a report whenever the CRA “has reason to believe” that the user intends to use the information for a permissible purpose.21 However, when a CRA has a reason to believe that the information may be used for an impermissible purpose, it has a duty to take additional steps to ensure that the user has a permissible purpose.22 This “reason to believe” language only prefaces some of the listed permissible purposes, but the other permissible purposes

Fair Credit Reporting: 7.1.3 Can a Consumer Deny Permission for a Release of a Consumer Report?

If a user has a permissible purpose, the consumer cannot stop the CRA from furnishing the report. A consumer’s written objection to the release has no effect,32 unless the intended use is impermissible.

A consumer can condition an offer or willingness to enter into a transaction so that a permissible purpose to obtain and use a consumer report never arises. When a consumer states that they will not enter a transaction if it means that a consumer report will be obtained, then a permissible purpose for using a report should not exist.

Fair Credit Reporting: 7.1.4.1 Generally

Although the FCRA is structured as a list of permissible circumstances under which CRAs may release reports, the Act also governs the users of consumer reports. The purposes listed in the FCRA govern both users’ ability to obtain consumer reports and also their use of those reports once they have been released.37

A user who intends to use a report for permissible purposes but is mistaken about the circumstances likely is not liable for an impermissible use.38

Fair Credit Reporting: 7.1.6 Agents of the User

An agent of a party with a permissible purpose may obtain a consumer report when acting on behalf of the principal for that purpose.52 The access to consumer reports by third parties who are involved in transactions but are not agents of other parties is discussed in § 7.4.6, infra.

Fair Credit Reporting: 7.1.7 Release by One Reporting Agency to Another

The FTC Staff Summary allows a CRA to release a consumer report to another CRA in order for the second CRA to furnish the report to a requesting subscriber. In this circumstance, one CRA is acting on behalf of another.61 In other words, the CRA receiving a request from a user is responsible for determining the permissible purpose, and the CRA providing the report to another CRA need only determine if the requesting CRA’s purpose is to provide the report to a user with a permissible purpose.

Fair Credit Reporting: 7.1.8 Is Information a Consumer Report If Released for Impermissible Purposes?

The permissible purposes allowed under the FCRA also form part of the definition of “consumer report,” because information becomes a “consumer report” if it is used or expected to be used in the manner described by the Act.65 CRAs have, on occasion, defended unlawful releases of consumer reports by arguing that if the information is released for impermissible purposes, it is not a “consumer report” and the FCRA therefore does not apply.

Consumer Banking and Payments Law: 9.1 Overview

This chapter examines five different ways that individuals can receive Social Security, Supplemental Security Income (SSI), and other federal benefits. The chapter sets out advantages and disadvantages of the different ways and the legal limits and rights under each method of receiving federal benefit payments: