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| vol 18, num 4 | December 2020 |
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| 2020 Co-Chair Corner/Year in Review |
| We thank all committee members for their support and participation in this momentous year. Despite the many challenges presented due to COVID, 2020 turned out to be a very productive year for the committee.
The committee’s proudest achievement was completion of the second edition of ABI’s Thorny Issues in Consumer Bankruptcy Cases. A collaborative effort of the committee’s officers, the manuscript has now gone to the publisher. Pre-orders are being taken at the ABI Bookstore.
Keith Larson and Hannah Hutman are our Special Project Leaders and are primarily responsible for organizing the committee’s webinars. 2020 was “THE YEAR OF THE WEBINAR!”
- On April 9, the committee presented ”Consumer Provisions of the CARES Act, and Local Court Responses to the Pandemic,” moderated by Judge Tracy Wise and featuring attorneys Mike McCormick, Eric Goering and Trustee David Leibowitz.
- On May 7, the committee presented “The New Small Business Reorganization Act Subchapter V Chapter 11,” moderated by attorney Jon Lieberman and featuring Judge Paul Bonapfel, and attorneys James Bailey and Judith Miller.
- On July 17, the committee presented “The Evolution of Consumer Bankruptcy Practice in the COVID-19 Era,” moderated by Chapter 13 Trustee Marge Burks and featuring attorneys John Crane, Charissa Potts and Jenny Doling.
- On Dec. 1, the committee presented “The Evolving Role of Chapter 7 and Subchapter V Bankruptcy Trustees During COVID and Beyond,” moderated by attorney Jon Lieberman and featuring Judge Alan Stout, Trustees Rick Nelson and Hannah Hutman, and attorney Keith Larson.
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Michelle Bass serves as our Newsletter Editor. With the change of committee leadership in the spring, newsletters were published in April, September and December. Topics included “Consumer Filings and COVID-19: How Policy Changes May Affect Timing,” “Consumer Provisions of the CARES Act and Local Court Responses to the Pandemic,” “Don’t Snooze or You’ll Lose: Denial of Relief from Stay Is Final and Appealable Within 14 Days,” “Happy Anniversary, Taggart!,” “Means Test at 15,” “The Student Loan Discharge Crisis” and “Preserving Chapter 13 Debtors’ Ability to Modify Plans.
Heather Giannino serves as our Education Director, and she organized a very successful Winter Leadership Conference panel this year that provided an update on the top 10 recommendations of ABI’s Consumer Commission. The panel was moderated by Judge Dan Collins and included attorneys Ted King, Adam Herring, Geoff Peters and Ariane Holtschlag.
John Bollinger serves as our Communications Manager and is very active on our listserve. He welcomes all suggestions for topics for discussion.
Karlene Archer serves as our Membership Relations Director and has been instrumental in facilitating an increase in committee membership this year. She helped organize an all-committee Zoom cocktail party over the summer featuring the late Elvis Presley. She is also working on a debtor/creditor debate series initiative, which she hopes to unveil at our next committee meeting. |
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| ABI Live: Consumer Bankruptcy Reform Act of 2020 Webinar on Thursday! |
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| On December 9, Senators Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.) and Representatives Jerrold Nadler (D-N.Y.) and David Cicilline (D-R.I.) introduced the Consumer Bankruptcy Reform Act of 2020. The Act proposes a fundamental reform of the consumer bankruptcy process under the Bankruptcy Code, with the goal of making the process easier, less expensive and more equitable. Among other things, the Act proposes to replace chapter 13 and chapter 7 with a new chapter 10 that simplifies the consumer bankruptcy process and provides
flexibility in terms of the consumers’ retention of assets and commitment of income toward the repayment of claims. Please join our panel in a discussion of the Act’s highlights, including their initial impressions on the contrast between current processes under chapters 7 and 13 and the proposed processes under chapter 10. recruitment of chapter 7 trustees. The panel will also discuss the role of the trustee in subchapter V cases under the SBRA, including trustee compensation. |
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| Relief from the Stay and Abandonment: Functional Equivalents? |
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Joe F. Kolb
j. kolb
Little Rock, Ark. |
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| In 2019, the U.S. Supreme Court adopted an amendment to Rule 6007 of the Federal Rules of Bankruptcy Procedure that makes clear that a creditor that files for abandonment of property of the estate under 11 U.S.C. § 554(b) must serve its motion on all creditors pursuant to Fed. R. Bankr. P. 7004. One consequence of the amendment was to increase the administrative burden and cost to creditors and their attorneys of obtaining an order of abandonment. That burden/expense can be substantial in a chapter 7 case with a significant number of creditors. |
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| “Unless the Court Orders Otherwise”: The Impact of Local Rules on Deadlines Established by the Federal Rules of Bankruptcy Procedure |
| The extensive 2017 changes to the Bankruptcy Rules included a model chapter 13 plan. These changes were designed to bring more uniformity to chapter 13 practice. Uniformity is helpful for both consumers and creditors alike; where courts agree on a majority practice across the country, national lenders become more efficient in their practices. The need created by the absence of uniformity in deadlines imposed by local and federal rules is great. This disparity hits consumer debtors the hardest. Consumer practitioners should be aware of the relative lack of uniformity that exists, and note the differences that exist between the relevant local
rules and federal rules. |
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| Protecting the Child Tax Credit and Additional Child Tax Credit in Bankruptcy |
| The Child Tax Credit statute (CTC), codified in 26 U.S.C. § 24, has received varying degrees of protection in bankruptcy proceedings. Consumer debtors receiving a tax refund attributable to the statute must decide how to treat tax refund proceeds early on in their bankruptcy proceeding. Two emergent trends from bankruptcy courts around the country demonstrate that consumers may either (1) try to exclude the proceeds as nonestate property, free from the claims of creditors; or (2) acknowledge the proceeds as property of the estate protected by use of an appropriate exemption. |
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| City of Chicago v. Fulton: Should You Wait to Be Asked? |
| On Oct. 13, 2020, the U.S. Supreme Court heard oral argument that may alter the way bankruptcy courts interpret possession and control under Bankruptcy Code § 362(a)(3), and the right of turnover under the ambit of § 542(a). In Chicago v. Fulton, the Court is set to determine whether the automatic stay requires a creditor who is passively retaining an asset has an affirmative obligation under § 362 to return the property to the debtor immediately upon the filing of their bankruptcy. |
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