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Consumer Bankruptcy Law and Practice: 14.4.4.4.6 Undisclosed fees and payment changes

In curing a default under section 1322(b)(5), the debtor makes payments under the plan on the prepetition arrearage and provides for the “maintenance of payments while the case is pending.” For a cure plan to be successful there must be full disclosure of all postpetition “maintenance” payments.473 Unfortunately, it has become common for mortgage creditors to add fees and charges to mortgage accounts without notice to the borrower, trustee, or bankruptcy court while the bankruptcy case is pending, without disclosing the fees in a proof of cla

Consumer Bankruptcy Law and Practice: 14.4.4.4.7 Standing challenges to proofs of claim based on securitized mortgage debt

As securitization of mortgages has become widespread, it has become increasingly difficult for mortgage servicers to provide documentation of their standing to assert the rights of mortgage holders. Original documents are lost in the securitization chain and cannot be produced or, when they are located, they are frequently missing the endorsements or assignments necessary to prove their transfers in the chain.

Consumer Bankruptcy Law and Practice: 14.4.4.4.8 Responding to mortgage servicer abuses by making use of section 524(i)

Problems with inflated proofs of claims and misapplication of plan payments such as those discussed above can be remedied as violations of the discharge injunction, violation of the debtor’s order of confirmation through contempt proceedings, breach of an implied covenant of duty of good faith and fair dealing, and as unfair trade practices.488 Attorney fees should be available in each case.

Consumer Bankruptcy Law and Practice: 14.4.4.5 Objecting to Claims Filed by Debt Buyers

Federal Rule of Bankruptcy Procedure 3001 requires that when a claim is based on a writing, an original or duplicate of the writing must be filed with the proof of claim.507 Rule 3001(a) states that the proof of claim “shall conform substantially to the appropriate Official Form” and the instructions contained on the claim form (Official Form 410) state that the claimant must attach supporting documents.508 If the total amount claimed includes interest or other charges, Rule 3001(c)(2)(A) also r

Consumer Bankruptcy Law and Practice: 14.4.4.6 Objecting Based Upon Prepetition Settlement Attempts—Section 502(k)

The 2005 amendments included a provision that permits the debtor to seek a reduction in an unsecured creditor’s claim if the creditor unreasonably refused to negotiate, prior to the filing of the bankruptcy, a “reasonable alternative repayment schedule.”544 The debtor must attempt to negotiate the repayment plan through an approved nonprofit budgeting and credit counseling agency.545 If the creditor unreasonably refuses to negotiate such a plan, a debtor who later files bankruptcy may bring a mo

Consumer Bankruptcy Law and Practice: 14.4.4.7 Reconsideration of Claims

Both 11 U.S.C. § 502(j) and Federal Rule of Bankruptcy Procedure 3008 provide for the reconsideration of previously allowed claims.551 A motion for reconsideration may be appropriate in a number of circumstances.552 One situation that arises not infrequently is that of a debtor who cannot maintain the chapter 13 plan payments necessary to keep a motor vehicle. In such a case, the vehicle may be liquidated by the creditor after either a voluntary surrender by the debtor or a repossession.

Consumer Bankruptcy Law and Practice: 14.4.5 An Example: Truth in Lending Claims of the Debtor

One common type of claim the debtor might want to bring using these procedures would be an action under the Truth in Lending Act.554 Such an action could be removed to the bankruptcy court or brought initially in bankruptcy court by a complaint against the creditor, with the cause of action and any proceeds thereof claimed as exempt property (assuming the debtor has exemptions available to cover the amount of property).555 If the cause of action cannot be claimed as exempt, it is usually not dif

Consumer Bankruptcy Law and Practice: 14.4.6 Habeas Corpus

Another power of the federal courts that might prove useful on occasion is the power to issue writs of habeas corpus. The Bankruptcy Reform Act of 1978 had expressly granted the power to issue these writs to the bankruptcy courts, but this provision was not retained by the 1984 amendments. Prior to 1978, the Rules of Bankruptcy Procedure had provided that a bankruptcy judge could issue a writ for certain purposes.568 Thus far a new bankruptcy rule has not been promulgated to fill the statutory gap.

Consumer Bankruptcy Law and Practice: 14.5.1 General Principles

The possibilities for extensive litigation in connection with bankruptcy cases raise a familiar problem for low-income clients—how to deal with filing fees they cannot afford.575 Fortunately, under the present fee schedule set by the Administrative Office of the United States Courts, there is no filing fee required for adversary complaints filed by debtors.576 Unfortunately, there are substantial fees or bonds involved for other proceedings, for example, adversary proceedings commenced by non-de

Consumer Bankruptcy Law and Practice: 14.5.2.1 Chapter 7 Filing Fee

In an important positive change from prior law,585 and in a step that, for some debtors, should help blunt the effect of several chapter 7 filing fee increases, section 1930(f)(1) of title 28, United States Code permits the waiver of chapter 7 filing fees for debtors with incomes less than 150% of the applicable official poverty line based on family size.586 In addition to the income test the debtor must be unable to pay the filing fee in installments.

Consumer Bankruptcy Law and Practice: 14.5.2.2 Other Filing Fees

The amendments also clarified that bankruptcy courts can waive other filing fees for indigent debtors and creditors. The courts are given specific authority to waive other fees for debtors who qualify for the waiver of the chapter 7 petition filing fee.610 In addition, the statute makes clear that the courts may waive filing fees imposed under any part of 28 U.S.C. § 1930 for other debtors and creditors, in accordance with Judicial Conference policy.

Consumer Bankruptcy Law and Practice: 14.6 Class Actions in Bankruptcy Court

Among the Federal Rules of Civil Procedure incorporated by reference into the Federal Rules of Bankruptcy Procedure is Rule 23, which governs proceedings brought on behalf of or against a class.616 Thus, there can be little doubt that it is possible and proper to bring class actions in appropriate adversary proceedings.617 For example, one court has allowed a class dischargeability proceeding on behalf of students who had enrolled in a chapter 11 debtor’s fraudulent business schools.

Consumer Bankruptcy Law and Practice: 14.7 Involuntary Bankruptcy Cases

Involuntary bankruptcy cases against consumers, in which creditors force the liquidation of debtors’ nonexempt assets, were extremely rare under the prior Bankruptcy Act. Although the requirements for commencing an involuntary bankruptcy have been relaxed somewhat under the Code,626 such cases continue to be very uncommon.

Consumer Bankruptcy Law and Practice: 14.8.1 Appeals from the Bankruptcy Court

The 1984 amendments to title 28 altered not only the jurisdictional scheme applicable to initial bankruptcy proceedings but also the avenues available for appeals. While these avenues may vary depending upon the judicial district or circuit where a proceeding is litigated, they generally closely resemble the appellate mechanisms that existed prior to 1979.

Consumer Bankruptcy Law and Practice: 14.8.3 Appeals from the District Court or Appellate Panel

Appeals from the district courts, whether in their trial or appellate capacities and from bankruptcy appellate panels in all matters decided by them, are heard in the courts of appeals.691 Final decisions, judgments, orders and decrees may be appealed from the district court acting in its appellate capacity or from an appellate panel.692 It is now clear that district court decisions on appeals of interlocutory bankruptcy orders are also appealable to the court of appeals.

Consumer Bankruptcy Law and Practice: 14.8.4 What Is a Final Order?

No issue has been more frequently litigated in bankruptcy appeals than the initial jurisdictional issue of whether a final order exists from which an appeal may be taken to the court of appeals, or to a district court or appellate panel without leave of court. There is no statutory provision explaining what is or is not a final order, judgment, or decree, but a wealth of case law does exist. A final order is “one which ends the litigation . . . and leaves nothing for the court to do but execute the judgment.”698

Consumer Bankruptcy Law and Practice: 14.8.5 Procedure on Appeals

Procedure on appeals from the district court and from the appellate panels is governed by the Federal Rules of Appellate Procedure.759 For example, an appeal to a court of appeals may be dismissed as to parties who are not named in the notice of appeal.760 The appellate rules incorporate Federal Rule of Bankruptcy Procedure 8022, however, which applies to motions for rehearing of district court or appellate panel decisions.

Access to Utility Service: 47 C.F.R. § 64.1190 Preferred carrier freezes.

(a) A preferred carrier freeze (or freeze) prevents a change in a subscriber’s preferred carrier selection unless the subscriber gives the carrier from whom the freeze was requested his or her express consent. All local exchange carriers who offer preferred carrier freezes must comply with the provisions of this section.

(b) All local exchange carriers who offer preferred carrier freezes shall offer freezes on a nondiscriminatory basis to all subscribers, regardless of the subscriber’s carrier selections.

Access to Utility Service: 47 C.F.R. § 64.1195 Registration requirement.

(a) Applicability. A telecommunications carrier that will provide interstate telecommunications service shall file the registration information described in paragraph (b) of this section in accordance with the procedures described in paragraphs (c) and (g) of this section. Any telecommunications carrier already providing interstate telecommunications service on the effective date of these rules shall submit the relevant portion of its FCC Form 499-A in accordance with paragraphs (b) and (c) of this section.

Access to Utility Service: Listing of Provisions

TITLE 42. THE PUBLIC HEALTH AND WELFARE

CHAPTER 81—ENERGY CONSERVATION AND RESOURCE RENEWAL

SUBCHAPTER III—ENERGY CONSERVATION AND RENEWABLE–RESOURCE ASSISTANCE FOR EXISTING BUILDINGS

PART A—WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS

42 U.S.C. sec.

6861. Congressional findings and purpose

6862. Definitions

6863. Weatherization program

6864. Financial assistance